How Good Is Your Sales Organization? Take this 6 Point Test
The Katahdin Group
May 1, 2019
Is your sales organization perfect? Do you have all the necessary elements so dialed in that there’s little room for improvement? Smart CEOs understand there is always room to improve, and that sales strategies need to be dynamic and adjusted often as the business grows and changes. When adding new products, or targeting new markets and geographies, companies must be continuously working to optimize their sales process in order to drive both new customer and organic growth. What areas are you hitting home runs in and where do you have some room to improve? Let’s find out...
“Even in a great sales organization, there’s always room for improvement."
Take the 6-Point Test:
Is your sales approach aligned with your overall growth strategy? Back in 1962, Alfred Chandler said that “structure follows strategy.” This is particularly true in sales organizations, which must be aligned with the company’s overall growth strategy. You first must know where the growth is. Is it in new products, Geos, new markets, new positioning? Once that’s clear, you have the foundation you need to map the sales organization to your strategy. It’s harder to change structure than it is to change strategy. It’s a lot of work, but it’s got to happen. In today’s business environment, strategies are changing often as companies fight to be progressive and competitive. If the sales organization and process stays the same, sales becomes increasingly misaligned and disconnected, resulting in inefficiencies and ultimately failure to reach those growth goals.
Does your compensation plan match your sales strategy? I don’t have to tell you that most sales people are driven by compensation. They are going to work harder for any deal that results in a larger paycheck. For that reason, it’s imperative that your compensation model rewards the results that are driving your strategy forward. Is your goal to find new accounts? That’s a lot harder to do than growing existing accounts. If you want new named accounts, you have to reward that business at a higher level than you would business from an existing account. An effective option is to build a comp structure based on bonuses rather than straight commission. That way you can structure the bonus to reflect how the sales team should be spending their time, and adjust it from year to year as your strategy changes.
Does your sales approach match your culture? You’ve probably spent a good deal of time and energy creating a culture, but does your sales team reflect it?Typically the first interaction that customers and prospects have with your company is with sales, making it essential to hire and train a sales team that is aligned with your culture. For example, if your culture is one where you want customers to see you as a partner, you can’t have an aggressive sales team that will do anything to get business. Instead, your salespeople have to be consultative and build long-term relationships, sometimes at the expense of short-term results. No matter how good a salesperson is, if they don’t line up with your overall culture and your desired customer experience, it’s probably not worth having them on the team in the long run.
Do you really know what your sales people are doing with their time? Sales people do what you inspect, not what you expect. It’s a must that you are monitoring the right metrics and not just hoping they are “doing the right thing." This starts by being clear on what the right metrics are. Are you in a growing market where the more calls an inside sales person makes, the more business you get? Or are you trying to get into a new market where you need to balance that activity with growth in an existing market? The right measures will let you know where a salesperson is at and what they need to tweak. Knowing the metrics is only half the battle. You’ve got to get the whole team on board and up to speed. Communication is key. Have a discussion, get their buy-in, and make it clear that you’ll be monitoring them. Regular reviews are an important part of the ongoing accountability. And if you want everyone to be on board (and you do), you’ve got to make sure your leading salespeople, who may be exceeding their quotas but not meeting other metrics, are stepping it up. No one gets a pass.
Do you have a repeatable sales process? Do you know the best way to sell your product? Do all your salespeople know? This isn’t based on how you think the process should go, but on what you’ve learned is most successful in closing deals. Do you know the milestones and what information the prospective client needs at each point of the sales cycle? Does your team have confidence on their next move based on what the client is saying and the questions they are asking? Identifying what’s working, creating a process around that, and making sure the sales team is in sync, will help to streamline the sales cycle and move prospects through the funnel more quickly. Keep in mind that a repeatable sales process can still be flexible, adaptable and open to new learnings. Ideally, there is a mechanism in place to get feedback that can help you and your sales managers identify how to constantly improve the way you sell your product.
Do you have a highly effective sales hiring and training process? It’s pretty standard for a company to have a few good legacy salespeople with strong customer relationships and a winning pipeline, but if you want to grow the business, you can’t just rely on the rockstars. You need a highly effective process to recruit, train and on-board new salespeople. Effective training is consistent, thorough and provides salespeople with the knowledge and the tools they need to be successful. Time spent developing a training curriculum, creating materials, and delivering the training is well spent. The better you train your salespeople in those first days and weeks, the faster their ramp to productivity will be.Equally important is ongoing training for the entire sales team. Your products, competition and market dynamics are always changing and salespeople can tend to stay with what they know. They need continued information, support and accountability to make sure they are changing what and how they sell as the company and the market shifts.
Even in a great sales organization, there’s always room for improvement. It starts by choosing an area to focus on and then putting in the time and energy to make it better. Thoughtful and smart efforts to improve will pay off...in dividends.