An effective sales team is a combination of five main areas: hiring a talented pool of candidates; training existing and new salespeople consistently and effectively; compensating the sales representatives in a way that maximises production; evaluating performance and diagnosing any issues; and communicating the priorities of new deal negotiations.

Training

We recommend training the CEO, sales and marketing teams using the Sandler Selling Methodology. We find that this methodology is versatile and generally applies to most selling situations.

Sandler Selling Methodology

Sandler Selling Methodology is a sales approach that focuses on identifying and addressing the prospect's pain points, building trust, and creating a mutually beneficial relationship. The following are the key steps involved in implementing the Sandler Selling Methodology:

Once a sales methodology has been determined, train your team consistently:

1. Introduce the chosen methodology: Begin by providing an overview and its key principles
2. Provide Training Materials: Provide your new staff with training materials such as books, videos, and podcasts to help them learn. Encourage them to take notes and ask questions as they go along.
3. Role-play: Role-playing is a critical part of training new staff. Provide scenarios and role-play exercises that allow them to practice the methodology in a safe environment.
4. Provide Feedback: After each role-play exercise, provide feedback to your new staff. Discuss what went well and what they could improve on. Encourage them to ask questions and provide feedback of their own.
5. Reinforce the Methodology: Reinforce the methodology through regular training sessions and ongoing coaching. Encourage your new staff to share their experiences and challenges with the methodology and provide support as needed.

Compensation

Sales is more quantifiable than any other activity in your company, and sales compensation should reflect that direct, measurable nature of the job. Sales is more short-term than everything else you do – a sales teams need to be incentivized to deliver results today, this week, this month or this quarter; not make slow progress strategically.

1. Start with team structure and target earnings for the different seniority levels and roles
2. Determine base vs variable (commissions) – our strong preference is for a 50/50 split between base and variable
3. Define the variable compensation system and the targets (quotas)
4. Think of the different tools to drive behaviours and ensure fairness
5. Think of the results the business wants to see, e.g. if you want upfront billings, make sure commission is rewarding for this
6. Ensure it is simple. Take your average type deal and see if the reps can work out their comp on a calculator for the deals

Variable Compensation

• Metrics to be targeted on:
1. New Logo Opportunities:
• Definition: new sales to entirely new customers
• Commission: 7% of Gross Profit on New Sales*
2. Cross-selling and Upselling to Existing Customers:
• Definition: new sales to existing customers
• Commission: 1% of Gross Profit on New Sales
3. Recurring Revenue Renewals:
• Definition: Renewal of recurring revenue (S&M, term licences, SaaS subscription, recurring hosting) contracts above the value of RPI
• Commission: 10% of Gross Profit on uplift above RPI
• Other factors to consider
• ‘New Sales’ includes 1). perpetual or one-off software licensing; 2). professional service or implementation fees or other one-off fees; 3). year 1 recurring fee (support & maintenance or hosting charges)
• ‘Gross Profit’ means sales minus any costs to deliver these sales including but not limited to cloud hosting costs, hardware, data costs, third-party, licences, staff, contractors, time and material cost
• We recommended to keep bonuses uncapped
• Cash flow related incentives - tilt the variable comp to encourage upfront payments, multi-year deals, etc.
• Bonuses should be applicable to orders achieving margin thresholds (exceptions allowed for strategic purposes)

Performance monitoring

Setting clearly defined sales goals for the team helps lay a strong foundation to grow. Here are some steps to make sure the team is being measured effectively:

1. Set clear goals and expectations - can be measured in number of ways
1. Activity Metrics - these are sales activities and tasks that your sales reps undertake everyday including the number of sales calls, outreach emails, field sales visits, social media interactions, new leads acquired, qualified leads, demos, scheduled meetings and data entry into your CRM software.
2. Pipeline Metrics - these metrics measure how well your sales pipeline is performing and include the length of the sales cycles, number of deals in the pipeline and the average deal size.
3. Productivity Metrics - these sales performance metrics measure how effective your team is in their sales activities and include the win rate, lead response time, percentage of deals won and average customer acquisition cost vs. contract value and conversion rate.
4. Results Metrics - these show the overall success of the efforts of the sales organization. Some of the metrics measured include quota attainment, customer satisfaction and retention, churn rate, customer lifetime value, number of new customers, revenue and customer onboarding process.
2. Develop an up-to-date visual dashboard to consider every stage of the pipeline - consider using a sales CRM with pipeline management and sales tracking tools so the sales team can focus on closing deals (see Tracking and Evaluation section for more details).
3. Make the time to follow up with your team collectively and individually
1. Collectively - the easiest way to do that is to leverage regular catch-up meetings as an opportunity to look at any new or recurring issues. Use this time to collectively troubleshoot solutions and share helpful workarounds.
2. Individually - use this time to sensitively discuss exactly how their performance compares against the team’s objectives and highlight any specific areas for improvement. Try and find out if the salesperson needs training, support or extra resources to meet any problems or challenges.

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