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August 22, 2019
How to Organize Your Sales Force to Generate More Revenue
By: Austin Kline
As a sales leader, you have likely observed that the cost of sales is increasing and hiring ‘A’ player sales reps are expensive. You’re dealing with an ever decreasing budget and find yourself losing your best reps because you can’t pay them enough. In this environment, it becomes even more critical to ensure your sales organization is optimally organized. Read on to ensure your organization is structured for success.
Have you found that your revenue trends haven’t increased with your sales expense? Are you waiting for Sales Ops to provide you some analysis before you take action? Let me save you some time and let you know where you should look first – the structure of your sales organization.
If your team is struggling, but you can’t seem to figure out why odds are your team is inefficiently organized. In this blog, we will cover the leading modern sales team organizational models and help you determine which one may be the best for you.
Before reading on, take a peek at SBI’s How to Make Your Number in 2020 Workbook or interactive tool to learn more about designing sales organization models.
The Workbook discussed the content of this blog in greater detail, teaches you how to identify and hire ‘A’ players, and shows you how to best help your reps succeed within your organization.
Also, download this Sales Org Design Cheat Sheet to give you a head start on determining the right org model for your sales team.
Picking the Wrong Model
Deploying the wrong model comes with consequences that can cause you to miss the number. Here are some warning signs that your sales team isn’t optimally organized:
- Customer attrition
- Below average win rates
- Sales rep turnover
- Fewer than 2/3 of reps make quota
- Loss of market share
- New product launch failures
If you see these in your sales force, it might be time to make a change.
Modern Organizational Models
There are seven modern sales models you might consider when organizing your sales team. Deploying the one that is best suited for your business is critical for optimizing your reps’ productivity.
Below is a brief description of each:
- Stratification – Focusing sales on accounts based on size. This may be revenue, current spend, potential, or the number of employees.
How to Make Your Number: Put your best people (rainmakers) on your biggest and best opportunities.
- Hunter/Farmer – Dividing sales by activity. In this case, you would have hunters solely focused on opening new logos. The farmers focus on cross-selling and upselling within your current customers. Take a deep dive into this model by clicking here.
How to Make Your Number: Segment the team by focus area (new logos vs. installed base). Often, sales reps are good at one or the other. Rarely both.
- Geography – Territories are designed by zip code. You have reps who live in (or near) a particular territory where they sell.
How to Make Your Number: Build territories around rep proximity. This can increase the volume of sales calls to drive growth.
- Industry Vertical – Reps are organized by specific industry types (government, pharmaceutical, tech, etc.). They should know the industry well and sell into these verticals only.
How to Make Your Number: Ensure the right people have the right relationships and are reaching the appropriate buyers.
- Product – Similar to industry. However, your reps in this model are organized by specific product offerings.
How to Make Your Number: Leverage product expertise to sell more of each one. Can also ensure new product launches are successful with focused resources.
- Persona – Structure your sales organization based on buyer personas. Reps will be able to target messaging to specific persona, evaluation criteria, and objectives
How to Make Your Number: Target messaging to a particular persona, evaluation criteria, and goals. Reps can also gain credibility with specifically targeted personas.
- Hybrid – This is a combination of 2 or more of the above models. This structure allows for flexibility but can lead to inefficiencies if not perfectly executed. If you currently have a hybrid model and are faced with rising resource costs, it may be time to take a closer look at how your team is structured.
The Sales Org Design Cheat Sheet goes more in-depth into all of these options. It will take you through when you might deploy each of the above options. It also provides you with the pros and cons of each model.
What to Do Next
There’s a lot of work that goes into determining the right org model for your business. You need to get a complete view of your best options to eliminate waste. Consider the following before launching into your reorg:
- Customers– Understand how your customers buy, the value sales brings and how they want to engage.
- Prospects– Similar to customers, but with buyers unfamiliar with your offerings.
- Competitors– Learn how your biggest competitors engage with your customers. What do they do well? Where do you have an edge?
- Corporate– Understand how well your process aligns with what your customers want. Do you sell the way they want to buy? Are there trends in their purchase history to suggest where to point your resources?
- Field– Determine how your team engages with your customers today. How well does this align with what they want? How well do they do it?
If you are inward-out with your approach, it will not yield the best results. This approach is designed to help you determine where to point your resources.
Ensuring your sales investments convert to revenue is a critical strategic initiative. Getting this right will help you make the number. To learn more about this, consider leveraging SBI’s interactive tool to diagnose your sales force and request the 2020 workbook.
