May 3, 2021 by Jason Contant
Growing your sales team involves a variety of tactics — including protecting your strengths (strong salespeople and existing customers) — and avoiding the “first-year turnover problem,” says a new blog from Harvard Business Review.
Organizations need to be purposeful about what more salespeople will do for them, as well as what kinds of results to expect from a larger sales team, said the blog, A Checklist to Help You Grow Your Sales Team, published Monday. To support growth, a company will need to protect its existing customers and strong salespeople; focus on frontline sales managers; and scale and align the rest of the organization to support a large sales force.
Turnover among newly hired salespeople is frequently high. This can be the result of poor hiring, but a more common culprit is that new people do not close sales quickly enough, so they do not feel successful, according to the blog’s authors, Andris A. Zoltners, P.K. Sinha, and Sally E. Lorimer.
Zoltners is professor emeritus at Northwestern University’s Kellogg School of Management and the co-founder of ZS Associates, a global business consulting firm. Sinha is the other co-founder of ZS Associates. Lorimer is a marketing and sales consultant at the firm. The three authors cite one way to boost the confidence of its new hires.
“An insurance company boosts the confidence and motivation of new hires who don’t have prior experience by assigning them a few easy-to-close accounts (e.g., repeat customers),” the authors state. “An executive-search firm gives new salespeople a small starting salary plus a bonus for achieving activity goals (e.g., daily calls to job candidates, company visits), thus keeping new hires focused on establishing their referral network.”
Supervisor attention to onboarding, capability development, and early success is the most important factor for boosting the retention of new hires, the authors say.
Other tips include the following:
Take care of current salespeople, especially high performers
One way to partially offset an existing salesperson’s anxiety about losing familiar relationships to the newbies is to give the current salespeople a few new accounts, even as they give up old ones.
A salesperson’s degree of angst around upsizing will depend on how they get paid.
Quota-based incentive compensation plans are expansion-friendly, the blog’s authors say, because quotas can be adjusted to reflect account reassignments. When incentive compensation is tied to territorial sales volume, relinquishing accounts means giving up earnings opportunity.
One company expanding its sales team addressed the compensation issue by giving its current salespeople half the commissions on lost accounts for six months, the authors state. This encouraged the current salespeople to continue helping with the transition of accounts that they were losing to the new members of the sales team.
Sales managers can also enlist the help of high-performers in implementing the transition, providing them with expanded roles (such as mentoring new salespeople), and recognizing their contributions at sales meetings and other company forums.
Take care of existing customers
In the rush to grow, existing customers can be easily overlooked. Unless upsizing involves a brand-new sales team for a new market, some disruption to customer-salesperson relationships is inevitable. And so, the blog authors advise, protect “high-potential, high-sales” customers during a relationship change. Also, work to re-ignite stagnant sales for the “high-potential, low-sales customers.”
Regarding high-potential, high-sales customers, the company’s reassignment of accounts creates a real risk of revenue loss, the authors point out. At one company, for example, the account transition process had key personnel from the reassigned customer meet with the prior salesperson, the newly assigned salesperson, and the sales manager in a series of structured review and planning meetings.
As for the high-potential, low-sales customers, account reassignment can greatly improve sales, especially if the relationship with the current salesperson is weak. “Salespeople naturally focus on products and customers they know well, while inadvertently ignoring less familiar and more difficult opportunities. A new salesperson brings new perspective and different product and market strengths, thereby creating opportunity to drive growth at accounts once considered plateaued or impenetrable.”
Link expansion plans to customer coverage needs and sales results
Figuring out how many salespeople to add to the team depends on the effort required to reach different customers (or customer-segments) and the expected sales impact. Criteria such as customer needs, potential, knowledge, self-sufficiency, and channel preference are key factors for determining coverage strategies.
Although additional salespeople are expected to drive sales growth, things never go exactly as planned. Continuous learning and adaptation greatly increase the odds of success with a larger sales team. By tracking effort and results by product and customer segment, companies gain insight about how well a sales force expansion strategy is working. “And they can make course corrections.”
Focus on acculturation
New salespeople must assimilate into the desired culture. At one company, as part of the onboarding program, a new account executive spent two days each with four different peers to learn the ropes. Each peer helps the new salesperson acclimate while focusing on a specific area of learning — territory management, account planning, sales process execution, or product portfolio prioritization.
Align other parts of the organization to support growth
Adding salespeople has a ripple effect throughout the entire organization, including the impact on functions linked to customer outreach. Supporting more salespeople may require increasing the capacity of lead management and sales operations. And it may necessitate redefining the responsibilities of other sales roles, such as inside sales, customer success, and channel partners.
Feature image by iStock.com/fizkes