Companies with rising sales, or who see the potential for revenue growth, logically seek to increase the size of their sales force. But doing this isn’t as simple as hiring the right talent. Companies need a plan for fitting the new sales reps into the existing sales structure. Follow these six steps to do it right.
Faced with shrinking markets and digitally-savvy buyers who rely less on help from salespeople, some companies are downsizing their sales forces. At the same time, other companies are markedly upsizing sales teams to support new products, pursue new customer opportunities, or compete for share of growing markets. Many of these expanding sales teams sell the very products that enable digital and virtual sales channels (e.g., tools for webchat, digital messaging, and video communication).
Being purposeful about what more salespeople will do, and what results to expect, is only the first item in a six-point checklist for assuring successful sales force growth. Items #2 and #3 are about protecting strengths — existing customers and strong salespeople. Items #4 and #5 focus on first-line sales managers and their critical role in onboarding, acculturating, and retaining new salespeople. And item #6 is about scaling and aligning the rest of the organization to support a larger sales force.
#1: Link expansion plans to customer coverage needs and sales results.
How many salespeople to add 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.
#2: 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. It’s important to protect high potential-high sales customers during a relationship change. At the same time, expansion provides opportunity to reignite stagnant sales to high potential-low sales customers.
For high potential-high sales customers, reassignment creates a real risk of revenue loss. A purposeful transition can do wonders for account retention. At one company, 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. With the sales manager as transition orchestrator, the fresh perspective had positive impact even on growing accounts.
For high potential-low sales customers, 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.
Finally, existing customers need a fresh look even if they are not changing hands. Sales force expansion gives salespeople more time to pursue opportunities with existing customers.
#3: Take care of current salespeople, especially high performers.
When current salespeople give up accounts (and therefore sales opportunity), we routinely hear salespeople complain: “They took away some of my best accounts.” This feeling may or may not be justified. One way to partially offset the anxiety about losing familiar relationships is to give salespeople a few new accounts, even as they give up old ones.
The degree of angst during upsizing often depends on how salespeople are paid. Quota-based incentive compensation plans are expansion-friendly because quotas can be adjusted to reflect account reassignments. When incentive compensation is tied to territory sales volume, relinquishing accounts means giving up earnings opportunity. One medical device company took the edge off this transition pain by giving salespeople half the commissions on lost accounts for six months. This also encouraged salespeople to continue helping with the transition at accounts they were losing.
Sales managers are at the center of efforts to retain and motivate high-performing salespeople. Effective strategies include enlisting the help of high-performers in implementing the transition, providing them with expanded roles (e.g., mentoring new salespeople), and recognizing their contributions at sales meetings and other company forums.
#4: Focus on acculturation.
When new hires come from multiple external organizations, you risk creating an incohesive culture mish-mash. To succeed, new salespeople must assimilate the desired culture. The manager is key. There is no substitute for frequent meet-ups with the salespeople in the first few months (formal and informal; one-on-one, and in group settings). Mentorship and sustained interaction with peers and supervisors help shape the workstyles of new hires to fit the culture, while also supporting new salespeople in navigating the unfamiliar environment. 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 helped the new salesperson acclimate while focusing on a specific area of learning — territory management, account planning, sales process execution, or product portfolio prioritization.
#5: Avoid a first-year turnover problem.
Turnover among newly hired salespeople is frequently high. This can be the result of poor hiring. A more common culprit is that new people do not close sales quickly enough, and thus do not feel successful. 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). 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.
#6: Align other parts of the organization to support growth.
Adding salespeople has a ripple effect throughout the organization, especially on functions linked to customer outreach. For example, 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.