Structure for the New Norm
Back in the days when social distancing was something we did after curry night and border control was a mid-week show on TV1, I spent some time with a company that was debating the structure of their sales team and the value that their salespeople were bringing to the organisation. The business was growing nicely but they questioned if this was based on their industry rather than the talents and efforts of their sales team. What we discovered was enlightening.
The company had about 1,000 clients and when they split them based on revenue, they noted about 400 of them were spending less than $1,500 a year with them on a margin of about 35%. What they also noted was that for 95% of these companies they were receiving the full share of wallet meaning that there was no real opportunity to advance their buying relationship.
Despite this, these companies were receiving a face to face visit once a month visit by a sales rep. Guess who else received a visit once per month by a sales rep? That’s right, their best customers were receiving the same level of care as their smallest. This company realised pretty quickly based on these statistics they needed to re look at how they sold and how they structured their sales team. Some easy wins were to be had, especially when you look at the cost of a typical salesperson.
The following you can use as a guide and will vary industry by industry but as always it highlights the significant cost of running a sales team.
- $300 per face to face visit
- $90 - $100 for a zoom meeting
- $30 - $50 for a phone call
- $10 - $15 for a video email
- $3 – $5 for an email
- $2 for an SMS
The number one question for anyone involved in the sales process right now is, ‘How are we going to sell to our customers in the short, medium and long term?’ How you sell now is probably, and should be, changing.
Let’s assume (which I believe is a given) that we will spend less time in front of our customers, let’s assume that technology will take over a lot of the lower end communications (which I also think is a given) and let’s assume that will drastically change the way that we structure our sales team. The biggest question our company is being asked right now is, ‘Do we need to change the structure of our sales team and if so, how do we change?’
Typically, there are three main ways to set up your sales team, all of which have pros and cons based on industry type, size of business, location etc.
- Island – This is the most common in New Zealand. It means that the reps look after every part of the Sales Process from lead to close to account management. They report into a sales manager and are quite often split with 80% account management and 20% business development.
- Assembly Line – This is where salespeople are assigned a piece of the sales process. Typically, these are structured so that you have a team generating leads to hand over to the qualifiers (sales development reps), to account executives who close the deal to hand over to the customer success team.
- Pods – these are usually structured similarly to the assembly line however they are working as a group of teams across the company and are often seen as being competitive with other internal pods.
Consider what kind of sales team you want to be, remembering culture is key to success. Making this a conscious decision is the very best foundation for maximum sales performance. Start with your top customers and your ‘Ideal Prospects’ and ask questions, seek to understand. How is it that they want to buy and deal with you? What is the best way to deliver an outstanding customer or buyer experience? If you follow the commercial numbers above how is it that you then want to serve your ‘B’ customers and finally how will your ‘C’s fit in? From here build your team, your systems and your processes.
In the current environment, your sales structure and the efficiency of it should be top of mind. It’s time to think differently, gather information and make change. Our advice is to seek advice…and don’t rush the process.