The cost of sales is increasing. Hiring ‘A’ player sales reps is expensive. Deploying those resources incorrectly can be even more expensive. If organized incorrectly, your team will miss the number.
A symptom of this is: your revenue trends haven’t increased with your sales expense. Why not?
To learn more about designing sales organization models, sign up for SBI’s Annual Research Session. In this session, we will cover subjects like:
- Leading organizational models for Next Year
- How to identify and hire The New ‘A’ Player
- How to help your reps succeed in your organizational model
Also, download the Sales Org Evaluation Tool. Benefits of the tool:
- Determine the right org model for your sales team
- Drive revenue growth by deploying the right resources on the right accounts
- Lower cost of sales by eliminating the hiring of the wrong resources
Picking the Wrong Model
Deploying the wrong model comes with consequences that can cause you to miss the number. Here are a few that may be signs for you:
- 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 are seeing these in your sales force, you might consider making a change.
Modern Organizational Models
There are seven sales models you might consider to make the number. Below is an image of each, along with a brief description.
1. Stratification – focusing sales on accounts based on size. This may be revenue, current spent, potential or number of employees.
Make the # by: Putting your best people (rainmakers) on your biggest and best opportunities.
2. Hunter/Farmer – dividing sales by activity. In this case, you would have reps focused on opening new logos. The farmers focus on cross and upselling in the installed base.
Make the # by: Segmenting the team by focus area (new logos vs. installed base). Often, sales reps are good at one or the other. Rarely both.
3. Geography – territories are designed by zip code. You have reps who live in (or near) a particular geo where they sell.
Make the # by: Building territories around rep proximity. This can increase the volume of sales calls to drive growth.
4. Industry Vertical – reps are organized by specific industry types (government, pharmaceutical, tech, etc.). They sell into these verticals only.
Make the # by: Ensuring the right people are having the right conversations with your buyers.
5. Product – similar to industry. However, your reps in this model are organized by specific product offerings.
Make the # by: Leveraging product expertise to sell more of each one. Can also ensure new product launches are successful with focused resources.
6. Social Proximity – an emerging model. Your reps are organized by their social proximity to specific buyers.
Make the # by: Assigning your reps to accounts where they have the shortest path to the buyer. Easier access can equal more wins.
7. Hybrid – this is a combination of 2 or more of the above models. From the image, you can see this is not recommended. It dilutes your team’s effectiveness and may be part of your issues today.
The Sales Org Evaluation Tool goes deeper for you on this. 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 you. You need to get a complete view of your best options to eliminate waste. Here are some ideas for you:
- Customers– understand how your customers buy, the value sales brings and how they want to engage.
- Why? It’s all about the customer, in the end. To make the number, your customer has to value interaction with your reps.
- Prospects– similar to customers, but with buyers unfamiliar with your offerings.
- Why? Your model needs to support new logo growth. Knowing how net new buyers want to engage is critical.
- Competitors– learn how your biggest competitors engage with your customers. What do they do well? Where do you have an edge?
- Why? In an emerging market, you have to organize to beat the bad guys. In a competitive replacement market, you need to organize to take share.
- Corporate– understand how well your process align 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?
- Why? The org model has to align with your strategy. If you are developing new products, the sales team has to sell them successfully. If you are acquiring companies, the sales model has to accommodate the new business.
- 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?
- Why? You need the above items complete to compare to current state. Who on the team today can transition to the new model? How far away are you from making the change real?
If you are inward-out with your approach, it will not yield the best results. This approach is design 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 signing up for our free research session.