Creating a sales team is a key milestone; it usually marks progression beyond start up and early development when the founders are no longer able to do everything and help is required.
If you aren’t from a sales background it can seem a little daunting. The good news is that there are a simple set of steps to setting up and running a good sales function:
1. What should your sales structure look like?
Use your marketing plan & sales strategies to define the type and number of sales people you need; “hunter” and “farmer”. The hunter brings on-board new business and can embrace road-based new business development executives and outbound telesales. The farmer looks after customers you already have e.g. key account managers and field sales.
Once you know what you are looking for, identify the skills and attributes that reflect your business needs. You will want at least some experience of sales and negotiation; you may also want existing contacts within your customer base, sector knowledge etc.
Every sales person needs a positive attitude and enthusiasm and of course they must be a good fit with your own values. Strong organisational and administrative skills are beneficial
2. On what basis are you going to hire your sales team?
Are you looking for full time employees or self-employed personnel? Self-employed personnel keep the overhead down and can work in the early days where there are quick wins. However they may not bring the commitment you are looking for.
If employed, most sales people expect a bonus structure based upon results. Low-basic, high-commission pay structures are often suitable for young firms, as they keep fixed costs down, providing that achieving the target is under the direct control of the individual.
Whichever way you go, structure incentive pay to reflect your business objectives, e.g. do not pay commission based on sales volume if your aim is to increase the number of high-margin sales you make.
3. Recruiting your sales team
Finding the right people can be tricky so put some thought into appropriate channels to find potential recruits. Recommendations go a long way so start by asking your customers, and existing team members.
When you have identified potential recruits make sure you hire well; plan thoroughly before you interview, ensure that you match individuals to the skills you need and pay close attention to the cultural fit.
Ensure you have an employment contract in place. As well as the normal clauses you may want to consider limiting a sales person’s ability to take customers away when they leave. Many sales people are not office based so setting out a code of conduct and defining unacceptable behaviour is important.
Just like any other employee, the early engagement is vital and will set the tone for the relationship. Remember the sales person is evaluating you too! Give them information about your products, company and market. Brief new recruits on company culture, values, sales strategy and policy. Ensure they understand your standard terms and conditions of sale.
There is nothing worse than having ambiguity of responsibilities amongst the sales team. It will drive them and your customers mad! Allocate clear responsibility for different accounts, products or geographical territories. Set clear ground rules for the level of responsibility and freedom sales people have.
5. Setting and reviewing targets
The targets should be clearly linked to your business goals. However involving the sales team in their creation can be a great way to secure buy-in. Agree monthly targets based on your sales forecasts and set targets for individual accounts, team members and different sales teams.
For new business development, define your sales funnel and target sales conversion rate. What are the key activities to ensure the sales process works? Just like the revenue targets, define what you are looking for and put in place collection and measurement systems.
Sales teams looking after existing customers can be similarly tracked; define customer retention targets and repeat business cycles. Establish call cycles.
If you aren’t directly targeting margin set up an R-A-G model to ensure you get the right margin mix.
Monitor progress by holding weekly, monthly and quarterly reviews. Weekly, focus on the sales person’s forecast, order intake, pipeline and activity. Get your sales team into the discipline of forecasting and identifying gap closing activity. Monthly, review performance versus invoicing target and discuss outcomes. Quarterly, look at the wider issues as well as results, e.g. keeping good sales records.
6. Ensure you provide appropriate support
Sales can be a lonely role, doubly so if the sales person believes they are not getting the backing they deserve. Standardise documents such as call sheets, proposals and contracts. Provide promotional material such as brochures and price lists.
Give sales people the support they need especially when engaged on big deals, major contracts, or tenders. As well as signalling your interest it will also allow you to make critical decisions to win business that may be beyond the sales person’s remit
Hold regular one-to-one meetings to discuss objectives, performance and problems. Watch out for signs of low morale or personal problems. Take every opportunity to praise, congratulate and motivate.
Sales is a critical function in any business. Like any other function it can be defined by processes designed to equip and release the sales team to perform at their best within boundaries you have laid down. Constructing your sales team requires careful thought, ongoing support and continual review. A good sales team will get you the right sales and keep you in touch with the market.
About the author:
Simon Tempest is a director of the Pro-actions group of companies.