Building B2B Startup Sales Teams
Frameworks and guidance on building solid sales teams
Building a sales team can feel like navigating a maze—one wrong turn and BOOM, you might end up lost in the weeds!
Finding your way out of IKEA without a map seems easier than this, right?
Needless to say ---- not hunky-dory at all!
But fret not; if you’re nodding along, you’re in the right place!
We’re diving into the nitty-gritty of building rockstar sales teams, sharing stories and insights that’ll have you saying, “I wish I knew this sooner!”
So, let’s unlock the secrets to turning your sales efforts into a well-oiled machine.
And speaking of secrets, let’s tackle a few burning questions:
1. Do you really need a sales team, or can your product sell itself?
2. At what stage of sales call, you need to take the CEO to the meeting?
3. Is a sales head position always required along with sales reps?
4. Is there a hiring framework for sales reps?
5. How do you keep your sales team motivated?
I am assuming your product does not have a typical B2C cycle where the product sells itself from the marketing efforts without the need for dedicated feet on the street or an inside sales team
In this case of a self-serve product, customers can easily navigate without any assistance, then kudos! You may not need a sales team anytime soon.
So what’s the tipping point that a sales team is required to be onboarded?
Well, if a customer is ready to shell out a hefty sum — to solve a specific problem, which is customized for their need, and keeps them up at night
That’s a big green flag waving for a sales-led approach!
This isn’t a self-serve situation; it’s going to take some hand-holding and a longer deal cycle.
Most B2B startups will eventually need to mix things up with both product-led and sales-led strategies.
Trust me -- it’s not an either/or scenario, so don’t get stuck in that mindset!
Remember, the decision boils down to your product's complexity, the size of the deals, and whether your customers want to go it alone or need a little guidance.
Sales Calls: How to Initiate, Engage, and Close Successfully?
Once you’ve got a prospect on your web, it’s time to shine! As a founder, you should be on that call from day one—trust me, prospects love it!
No matter how trivial you feel, you’re likely pretty good at the middle part of the sales conversation. This is where you can really flex your muscles and tackle those client questions about your product.
Now, let’s be real: while your sales reps might be great at kicking things off and sealing the deal, they often struggle in the middle.
That’s where you have a major role to play!
The stage is all yours as a CEO ----- your expertise can help answer those tricky questions, provide personalized solutions and — your passion can make all the difference.
Always define the next steps at the end of every meeting. Ask, “Is there someone else at your company I could demo for?”
People are busy, and let’s face it, nobody wants to sit through multiple demos. But in 2024, we all have to charm multiple stakeholders—so get ready for your close-up!
And here’s a pro tip: the best reps will tell prospects when it’s not the right fit.
I know it sounds painful, but saying “No, we aren’t there yet” can actually foster trust. So, embrace your role in the sales process, and let’s make those deals happen!
Scaling Your Team: Timing & Key Initial Hires
So, you’re ready to scale your sales team?
Fabulous!
Start by hiring a couple of sales reps so you can A-B test them.
Here’s the kicker: those first reps need to be people you’d actually buy your product from.
If I wouldn’t trust them to sell to me, why would you trust them with your leads?
Simple as that!
Leads are like gold—hard to come by and precious!
Help your reps crack 100% of their targets consistently for months before you think of scaling up, remember 2 reps with 100% achievements are way better than 4 reps struggling to get 50%
Now, let’s talk about hiring a Sales head. Hold your horses!
Their main job is to scale from 3 reps to 100, and you don’t want to bring them on board until at least two of your sales reps are consistently nailing their quotas.
Make sure you’ve nailed down your product-market fit and handled client escalations first, before moving to the senior positions in sales
Recently, at my current stint in a music ed-tech startup, I spent a full 8-10 months developing the PMF, creating the platform, features required by music learners. Not focusing at all on sales or an inside sales team. This led to better focus without undue pressure of monetisation.You don’t want to do the PMF testing and scaling up at the same time—talk about a juggling act!
The way I look at it ---- hiring too soon can lead to chaos, so take your time.
The right people in the right roles will set you up for success.
Trust me, scaling is a marathon, not a sprint!
To Set or Not to Set: Sales Quotas for TLs and VPs
So, should your team leaders (TLs) and VPs have a sales quota?
It’s a bit of a debate!
On one hand, if they’re scaling the team from 3 to 10 people based on overall sales quotas, they need to be involved.
But let’s be real—VPs often aren’t hands-on with product selling and may not fully relate to the challenges your sales reps face.
I believe that 20-30% of their time should be spent taking sales calls or joining in on conversations with sales reps. This keeps them connected to the front lines and aware of what’s really happening out there.
After all, when was the last time you heard a VP say, “I remember when I faced that challenge”?
It’s crucial for them to stay in touch with the realities of selling.
And when hiring a head of sales, make sure you find someone who’s passionate about sales.
Don’t hire someone who shies away from meeting clients, doesn’t love the thrill of closing deals, or isn’t driven to outshine the competition.
You want a sales leader who’s ready to roll up their sleeves and get in the game!
Remember, a great sales leader can inspire the team and drive results, so choose wisely!
Hiring Framework: Will you buy your product from your potential hire?
So, all set to hire, but what should you ask? When you’re at the interview table, go beyond routine, run-of-the-mill questions!
Key activity in the first 30 days: If a candidate doesn’t mention meeting clients, I’m out! We need go-getters, not dashboard refreshers.
Set expectations in the interview: If you hire someone who flops, remember: it’s on you! Candidates can’t do enough research in the limited time they have. Give them the most accurate picture of your org.
Demo your product: They should know how your product works—explainer videos and podcasts are a must! If they can’t connect with the core problem your product solves, it’s a red flag
Make them sell: Make them sell your product during the interview. If they need more time, give it to them—better to know now than later!
Don’t go just by brand pedigree: Hiring someone from a slightly tougher sales environment can be a game changer. Don’t hire from the highest market share brands in an industry. Hire from 3rd or 4th ones. People who haven't got brand tailwinds and still performed are the real heroes.
Building a Winning Compensation Structure
Let’s talk about compensation! To kick things off, consider a structure that combines a fixed salary with a 100% variable component based on the sales they close.
Let them take the entire sales value in incentives for their initial few orders. Why?
Because many new sales reps won’t be closing deals right out of the gate, and this model provides the extrinsic motivation they need to get rolling.
67% of sales reps don’t expect to reach their quota this year, and 84% fell short of it last year.
Set the initial goal at just 1X their take-home salary. This way, they can ease into the role without feeling overwhelmed. Trust me, once they find their groove, they’ll be delivering 3-5X that amount!
Don’t burden them with unrealistic expectations in their first quarter. Instead of pushing for 5X, let them focus on closing 1X. It’s all about building confidence and getting those early wins on the board.Concentrate your leads with your best closers while nurturing new talent.
This approach sets the stage for a thriving sales environment, where everyone can celebrate success together!
Building the Dream Team: Role Structuring and Promotion Paths
When it comes to team structure, let's talk about the tooth-to-tail ratio.
In my experience, the rule of eight is a solid guideline: for every eight Sales Development Representatives (SDRs) or outbound reps, you need one manager.
Now, here’s a crucial hiring tip: aim to promote 50% from within and hire 50% from outside for your management roles.
If your only promotion options are junior team members, you might struggle to scale effectively.
Remember, the skills needed to close deals aren’t always the same as those required to manage a team.
Most sales stars prefer to shine individually rather than take on the managerial mantle.
So, build your team wisely, promote strategically, and watch your sales soar!
The Bottomline
Building a killer sales team can feel like navigating a maze—one wrong turn and you might end up lost! But don’t worry, you’ve got this!
Start by hiring a few rockstar sales reps and scale up gradually. Figure out if your product can fly solo or if it needs a dedicated sales force.Take experienced folks from number 3 or 4 in that industryAnd don’t forget to make sales reps eat, eat much as they can in incentives, early on in their stintDon’t force push individual contributors to team rolesIf you’ve enjoyed this piece, do consider referring our newsletter to a friend. All my writing has topics related to startups, businesses, career, and entrepreneurship - Published at 10 am IST every Friday.
Also do provide your feedback or any questions that you may have on my email id: saurabh.substack.2407@gmail.com