Revenue is the lifeblood of any company and the key to driving revenue growth is a high-performing sales team. It comes as no surprise then that scaling a sales organization is one of the most common issues on the minds of the hundreds of CEOs and founders with whom we have the privilege of interacting each year.
Over the past 11 years, Serent has partnered with 35 portfolio companies and evaluated investments in thousands of others. As a result of our Growth Team’s hands-on work with our portfolio companies, we have formed perspectives around the major components of an effective sales framework with broad applicability for recurring revenue technology and technology-enabled companies. Implementing a sales framework is complex, but our experience suggests that CEOs who are able to take a step back and view sales through a holistic lens, carefully studying each component of the framework, and then tailoring each to their company’s specific needs, have the highest level of success.
Below are the high-level highlights for each of the eight components we have identified as core to a successful sales framework – in subsequent posts we will dive deeper into each component. Please keep in mind that while this mini-series is focused on sales execution, a comprehensive go-to-market strategy also necessitates integrated and effective marketing (to drive brand awareness, lead generation, and sales enablement), product management and finance (to ensure the right pricing, packaging, and contracting), and customer success/operations (to ensure customers receive the value they expect after the purchase decision). Each of these topics will be covered in subsequent posts – stay up to date with our latest posts.
“our experience suggests that CEOs who are able to take a step back and view sales through a holistic lens … have the highest level of success.”
Eight Core Components to Building a High-Performance Sales Team
- CUSTOMER & PROSPECT DATABASE:
- Develop a comprehensive list of all existing customers and prospects in the market that includes key variables that may be used in account prioritization and targeting, some of which may not be directly available in the public domain.
- ACCOUNT TARGETING:
- Leverage knowledge within your company and review historical drivers of sales wins to determine what variables support success within your sales organization. Weighting these variables and balancing them with deal size can assist in prioritizing accounts for your reps to target (prioritizing purely based on deal size is often the wrong answer).
- SALES PLAYBOOK & STRATEGIES:
- Establish a sales playbook for your reps to codify the messaging, approach to different customer segments, objections handling, competitive dynamics, and coordination with other resources within your company.
- SALES TERRITORY DESIGN:
- Design territories that segment the market and align reps on specific strategies and approaches most common to each territory. It is important to note that territories, while often purely geographic, need not be one-dimensional (market segmentation strategy could lead to other territory approaches).
- SALES COMPENSATION PLAN:
- Establish a compensation plan that is competitive, incents the right behaviors, rewards top performers, and aligns with the predictability / timeline of your company’s bookings to revenue conversion.
- HIRING & RECRUITING:
- Define a sales rep profile that focuses on sales and industry experience and matches your company’s sales motion. Ensure you have a strict set of interviewing criteria that emphasizes prior sales rep success vs. quota at companies with similar deal sizes, sales cycles, and end markets.
- TRAINING:
- Develop sales training programs for initial onboarding of reps as well as ongoing training that focuses on product competency, relative value delivered to clients, and familiarity with the end customer’s business operations and financials.
- SALES PERFORMANCE MANAGEMENT:
- Establish a regular cadence of 1×1 performance management meetings with the sales leader vs. broader team meetings, leverage a data-driven sales scorecard (highlighting individual performance, pipeline health, sales activities, territory coverage), and clearly define future action plans for the next meeting to create custom coaching for each rep.
We have seen success deploying this framework within our portfolio. Whether it was helping a services company’s sales team scale from $11M in annual bookings to $36M in two years or establishing the first professional sales organization at a software company and accelerating bookings growth from $1M per year to $3M run rate in less than 12 months.
While this framework can consistently be applied across industries and business models, it is important to note that this is not a cookie-cutter playbook. The reality is that selling software in higher education institutions will differ from how a service offering is sold to a skilled nursing facility or how a construction company will think about purchasing workflow software. Taking the framework as step one, we’ve found a hands-on engagement model, truly understanding the end customer’s journey, experience, and the industry dynamics, will bring true impact.