Written by The Board says Show Me
You want to add salespeople to drive your business, but the board is saying, whoa, convince us that new reps will be productive and not just burn precious cash. You can understand the concern considering that a fully loaded OTE will easily cost over $350,000 per year, and the clock starts ticking when an AE starts.
The Spreadsheet Can Look Great, But
Now adding sales capacity is easy, and the math readily flows down a planning spreadsheet as higher ARR contributions. The trouble is that it’s more complicated when it comes to actual results. And idle capacity can harm your cash flow as new AEs achieve their annual targets. In this article, we discuss what I’ve observed regarding hiring the right people and helping them ramp faster so that AEs can be more productive quicker, supporting finance executives to model their business.
Partner with the CRO and Calibrate Your Assumptions
Working closely with the Chief Revenue Officer or head of sales is critical to understand how new sales adds will contribute to ARR attainment. What’s worked in the past for me includes getting a realistic sense of how quickly new salespeople will ramp (sometimes two quarters, but hopefully, some contribution during the second quarter). But if you historically take a lot longer, then factor this into your ramp assumptions. Sales is by nature optimistic, so understanding the trends from the past with an appropriate factor rate for conservatism should help.
A Systematic Approach
To get people contributing right away, work on a structured onboarding program that provides the necessary training, tools, and resources to new hires can help them ramp up more quickly. According to Xactly, companies that invest in comprehensive onboarding programs can reduce their ramp time by up to 50%. In addition, we usually have sales enablement tools and battle cards ready so new AEs can customize their calling script.
Other tools include playbooks, case studies, and customer testimonials. According to tp Outreach, sales enablement programs can reduce sales cycle time by up to 18%. Being structured with the sales team regarding their expectations for the first 30, 60, and 90-day plans will also help.
Chart it Out with Data
Tracking key sales metrics, such as conversion rates and average deal size, can help sales managers identify areas for improvement and adjust their strategy accordingly. Xactly suggests that companies that use data to optimize sales performance can increase their sales attainment by up to 15%. We typically use a dashboard to track activity by month. Yes, closing deals is one thing, yet it’s constructive to see what new people will commit to in terms of swelling the pipeline.
Sourcing the Right People
Sales candidates who have worked in a particular industry for a long time are likelier to have a valuable network of contacts. Please be sure to look for candidates with experience selling to the same clients you are targeting. This rule is something I learned and applied from Unusual Ventures, which has an excellent field guide on GTM.
Can they bring in their business pipeline and generate their leads? This key point is the crux of hiring the right people. During the interview, ask the candidate to provide specific examples of how they have previously leveraged their network to generate leads. If they can give specific names and illustrations, this is a good sign that they have a valuable network that they can source.
Be the LinkedIn Detective
Look at the candidate’s LinkedIn profile to see how many connections they have and whether they are connected to decision-makers at the companies you are targeting. Having the right senior relationships (you can sort via SalesNavigator) can tell you if the candidate can get a response from the people who can actually sign the purchase order.
Sales and Marketing Alignment
Sometimes, AEs will say these leads are not good and need to be better qualified. What am I supposed to do with this? An AE will ask. Meanwhile, Marketing will wonder why sales can’t close deals. The back and forth could be more constructive and better when there is good communication between the two departments, including the BDRs or SDRS. High qualify qualified leads work, and it shouldn’t just be volumes of leads. A huge number of leads on a board deck looks nice but if there is a major conversion drop-off, something is not right. Companies should invest in lead generation programs that leverage a combination of inbound and outbound tactics, such as content marketing, SEO, and email campaigns. Also, compare and contrast the lead generation quality you get from field marketing, which typically costs much more.
Hire Hunters and Learners
You want AEs that will stay up-to-date on the latest trends, technologies, and best practices to succeed. Creating a culture of continuous learning can help sales teams stay informed and adapt to changing market conditions. Unusual Ventures recommends that companies focus on hiring sales reps who are curious and hungry to learn. I typically like to add make sure they have a lot of debt! 🙂