Building a Sales Team from the Ground Up
For wholesale distributors thinking about building a sales team from scratch or considering transitioning from independent sales reps to an internal team, figuring out where to start can seem pretty daunting. Especially for businesses still in “start-up mode,” processes related to hiring and firing may not be firmly established. We’ve gathered a few ideas and processes to make it easier. From determining when is the right time to start building your wholesale distribution sales team, to developing processes for hiring, motivating and compensating teams to encourage the best performance, we’ve got you covered.
When to Start Building a Sales Team
Managing a sales team can be a challenge; the very earliest days of your business may not be the right time to build a sales team, even if you could use the help. This is because the first thing your business needs to do before trying to expand is test the market: figure out how people respond to your product, what it takes to sell it, and whether it needs improvement. So how can you know when it is the right time? A couple of signs include:
- Your product is already proving itself in the marketplace. You’ve probably been selling it yourself for a while, and you’re getting good feedback from prospects and customers. If you’re not selling it yourself, you may have independent sales reps that have been getting good results for you, but you’d like to start building a salaried team that can dedicate themselves entirely to your brand.
- You’re unable to keep up with demand. Your sales pipeline is looking great, but you can’t close as many deals due to lack of ability to follow up with demand. The only thing holding you back from selling more is not having enough time in the day or feet on the ground.
- You have enough pipeline opportunity to afford a salesperson. Numbers might vary by company or product, but look at your pipeline numbers. What is the value of your sales pipeline vis-à-vis the cost of hiring a salesperson? This kind of analysis should give you a good indication of whether you have a sustainable business with enough margin to afford to pay a sales rep.
6 Steps to Building Your Sales Team
Once you’ve determined that it’s the right time, the next task is determining how to actually build the team. Here are some proven steps for building the kind of sales team that your business needs to make it to the next level.
- Determine the type of team you need. Do you need inside sales, field sales or both? How many team members will it take to get to scale? What should their background and experience look like? What sort of processes will they be using, and how will you support them?
- Develop a repeatable hiring process. Especially in the early days, it is important to hire very carefully since each hire has huge potential to impact a smaller company. Using the right process will help to ensure that each hire is the right fit. For instance, you could hire an outside recruiting firm or headhunter to find a sales rep. This will save you a ton of time since a recruiter has a big database of candidates to choose from and is well-versed in how to interview and hire for similar positions. However, what the recruiter may not bring to the table is a strong understanding of your business.
- Hire the right kind of person. Studies have shown that sales success isn’t so much a result of a specific personality type, but a willingness to engage in and successfully perform the tasks of selling. In other words, the best way to identify a person who will be successful in selling your product is to find someone that has already shown that they know how to accomplish those tasks. For more on hiring top sales performers, check out this post.
- Develop a compensation plan. Obviously, you have to pay people; the question is, how? Obviously, the more tightly compensation is tied to performance through a commission or bonus system, the more incentive each sales rep has to performing at a high level. Yet, especially in the early scale-up days of your business, there will likely be some lag time before reps can start earning those bonuses through closed business. You will need to find that sweet spot between minimizing your cost and risk, without exposing yourself to the even greater risk of being unable to attract the best talent.
- Plan to train and motivate the team. Once your team is onboard, you need a repeatable and scalable way to take your business’s “institutional knowledge” out of your head, and get it into the heads of your new team members. You also need to keep your team motivated. One method that is catching on is gamification, or introducing elements of gaming such as points systems and leaderboards, into your sales and training processes. Gamification puts the sales rep in charge of his or her own learning and taps into the sales rep’s natural competitive instincts. It can be used in many ways – to improve adoption of training tools by awarding points for using them, to motivate higher performance through sales contests, and much more.
- Give your team the tools to succeed. Finally, it’s important to remember that it’s not just a matter of hiring the right people and making sure they know how to succeed. They also need the right tools to deliver the results you expect. Consider how they will interact with customers and close sales. Do they need access to inventory information? Are you giving them an efficient way to write and submit orders? Can you replace paper processes with a mobile order writing app?
There are a lot of things to consider as you move forward with building a sales team from the ground up, but it’s worth taking the time to develop a plan that will take you forward. Following these steps and honestly evaluating whether you’re ready to start building your sales team, will help to ensure that your wholesale distribution business is positioned for maximum growth. Are you beginning the process of building a sales team? We’d love to hear how it’s going in the comments.