David Skok has another great post up titled A Common Way Sales Misses Plan. David has some of the best content out there for entrepreneurs, especially Software-as-a-Service entrepreneurs. The general idea is that when a startup has product/market fit and a repeatable sales process, the most common reason for missing a sales goal is not hiring and training sales reps fast enough. As much as entrepreneurs would like a simple self-service sales process, the reality is that almost all super successful tech companies employ hordes of great sales people.
Here are a few notes from the article:
- Bookings = Number of productive sales reps times average productivity per rep
- 2 variables to increase bookings:
- Number of productive sales reps
- Sales volume for an average rep per month or quarter
- 4 sales rep considerations:
- Need leads to feed sales reps
- Reps need time for training
- Many new hires will fail
- Staffing is needed for bringing on new customers and supporting them
- Ultimate recommendation: bring on more sales reps earlier than plan
Now, hiring a ton of sales people without product/market fit or a repeatable sales process isn’t the advice. Only when things are working well does it make sense to hire sales reps faster than planned. At scale, productive sales reps are the main revenue driver.
What else? What are some more thoughts on hiring sales reps ahead of plan when at scale?
David Cummings on Startups 