Need more sales? Hire more salespeople.
That’s been that strategy for the past decade in sales organizations large and small. Throw bodies at a number.
But now that strategy is broken. Why? Three reasons:
1. More headcount is too costly.
With rising salaries and the rapidly accelerating expense of health insurance (and other benefits), increased headcount has become too costly. And that doesn’t include costs associated with recruiting, hiring, training, and ramp-up to quota. Companies are finding that the revenue bump of a new salesperson pales in comparison with the cost of getting that person on board. In other words, it’s not worth the trip.
2. More headcount is too risky.
A second reason more headcount won’t get you to goal is that it’s too risky.
Here are the very sobering statistics related to sales hiring. If you hired five new salespeople today, only one will contribute in a meaningful way to top line revenue, three will become marginal performers, and one will become a total disaster. That’s net neutral, and, depending on the damage done by the latter, net negative.
Better hiring practices can improve these odds, but you can’t hire people who aren’t available, which is reason number three …
3. More headcount is unattainable.
Two powerful forces are colliding right now making more headcount an unattainable sales growth strategy: historic low unemployment and generational transition in the workplace.
The days of getting dozens of resumes from a recruiting ad are gone. Every sales organization I know has open seats and few, if any, qualified candidates to fill them. Why? Unbelievably low unemployment. There’s simply more jobs than people available to fill them.
In addition, Baby Boomers are retiring from jobs where there’s literally no one to fill their place, because ensuing generations had less kids. The war for talent is real, and no more real than in that sliver of the population (experts place it at less than 10%) with some sales DNA.
That’s the bad news. Here’s the good news.
You don’t need more headcount to generate additional revenue. You need to do the following three things:
1. Increase productivity per rep.
This is your new critical number: productivity per rep. Sure, you track lots of stuff in sales, pipeline generation, average deal size, time in the funnel, close ratio, and so on. But this one metric rules them all right now.
Think about it. If you had ten salespeople and you increased productivity per rep by 10%, which in my experience is reasonably achievable, you just generated the entire revenue of a new rep without any of the expenses associated with it.
How do you increase productivity per rep?
2. Focus on frontline leadership effectiveness.
Frontline sales leaders are the most important role in your sales organization. They drive productivity per rep, from first touch with a prospect to won deal. In specific, the ability of a sales manager to coach his or her team members (and not boss them around or hijack deals ) is the secret sauce for sales leadership success.
Salespeople will walk over burning coals for a leader who helps them become the best version of themselves and run like wildebeests from everyone else. A client of mine from a Fortune 100 company once told me, “If I had ten dollars to spend on sales training, I would spend nine of it on leadership development. It’s that important. That’s why we work with you.”
3. Invest in a winning sales culture.
This final investment for freeing yourself from the headcount crisis is culture. Culture is like the operating system on your smartphone. Apps get all the attention, but behind the scenes it’s the operating system that makes them work. If your operating system is outdated—or completely broken—no app in the world is going to function well.
You may have the best product at the best price. You may have the most brilliant sales strategy being executed by the most talented sales staff. You may have the latest cutting edge technology and the slickest social media presence, but if your culture is broken, all of that stuff—every bit of it—is dead on arrival.
Make culture a top priority and you’ll inspire all your reps to give 100% effort 100% of the time. And that results in more revenue. You’ll also close the back door of your sales organization, where top talent leaves for greener pastures every few years or so, and attract the very best reps to come and work for you, reducing the risks of a new hire when you actually need to make one.
That’s what I’m seeing in the trenches right now. If you need help developing your sales managers into the coaching leaders they can be, or need help building a winning sales culture, here’s the best place to get started: