So how do you build a scalable sales model from the start?
When you start off in business, it’s tough to build a scalable sales model when you’re just getting started out.
Because you usually just want sales, and so you throw all sorts of things at the problem and try to figure it out along the way.
But there is a way that you can actually build a scalable sales model, and it goes back to the build versus buy.
As a former VP of sales of a startup, I used to try to hire sales reps with experience and have them do every aspect of the sales process. So cold calls, meetings, close, manage their pipeline, everything.
Reps Fail in a Cycle of Closing and Prospecting
And it’s very difficult for one individual sales rep to be good at all of those different facets of sales, and so that’s why they tend to fail. Or that’s why as a founder, if you hire individual sales reps and you ask them to do everything, your results are typically cyclical in the sense it’s three months on, three months off, three months on, three months off.
What happens is they tend to prospect to look for a lot of business, then they get a lot of meetings may focus on that, and then they close all their business and focus all their energy on that and when they’re doing that they’re focusing less of their energy on prospecting.
So they close all their business, boom!, starts all over again. So that’s what you have this insanity of you can’t predict results, you can’t predict forecasts, and it’s really hard for utilization if you have any resources internally that you’re dedicating towards that.
Segment Out the Sales Process
There’s a book came out a while ago called “Predictable Revenue,” and it was a guy who was at salesforce which is actually one of my number one clients, and it’s about the segmentation of roles and responsibilities.
So for me, again, as a VP of sales, I would hire 6-7-8 sales reps, and they all failed at some point, and so I took a step back and said “look, there has got to be a better way of doing this.”
So I segmented out the sales process. and the three main sections of the sales process.
One was opening. You gotta find the business. Then you have to meet with the client to develop the rapport and the relationship, and then you’ve got to close.
At the time, it was me in my CEO and I looked at what aspect of the sales process I loved and I love the relationship building the building rapport, and that type of thing.
Could I close? Sure I could close, but my CEO was a hard-core closer. He was really good at asking very awkward questions and getting clients to do things. So we had to the pieces of the puzzle.
The third piece, could I open? could I prospect? Yes. Did I like doing it? Absolutely not. So instead of hiring somebody to do all of those, what we hired was a director of business development.
We looked at it and said this person is responsible for generating the meetings that I was then going to go on, and if I needed my CEO to come in and help close, we could.
So we had this three-headed monster, and then we identified what our sales equation was, which I think is one of the most important thing you can try to figure out early, which is one of the conversion ratios between each stage of the sales process?
Figure Out Your Conversion Ratio
So how many cold calls or emails does it take to actually get a meeting, and then how many of those meetings actually turn into proposals? How many of those proposals actually turn into closed business?
If you can figure out what that conversion ratio is, then you can start to be very mathematical about your approach.
So for us, we found out that it took us 30 meetings in order to generate the revenue that we needed with the conversion ratios of proposals to meetings and everything else.
We needed 30 meetings a month to generate as a small business to be able to hit those targets. instead of just looking at 30 meetings will do the channels.
What different channels do these meetings come from? There’s networking events, there is cold calling, there’s partners, and those type of things, and then there’s marketing SEO. So okay, out of all these channels, how many do we generate from each?
Then there was one left which was inside sales, so my director of business development, his entire job is to manage those channels and figure out how to generate 30 meetings a month that I could then go on.
So now you have this nice little engine with inside sales and the director business development manages these people, they grow up within your system, they become closers, and you move over as a VP of sales or CEO to the actual closing on the key target accounts. That’s how you can build a scalable sales model.
About John Barrows
John Barrows currently provides sales training and consulting services to some of the world’s leading companies like Salesforce.com, Linkedin, Apttus, DropBox, Box and many others.
His previous experiences span all aspects of Sales at every level from making 400 cold calls a week doing inside sales to running sales as a VP for his first start up and selling it to Staples.
He’s an active sales professional who has learned a lot about what works and doesn’t work in Sales and loves sharing the tips and techniques he has found to have had an impact along the way.
His main goal is to improve the overall education and quality of Sales by sharing ideas and techniques that work.