How to build a Sales Team
We leave our imprint on customers, through the sales team they meet.
So you're building your sales team. Hiring, training, monitoring, mentoring, evaluating…these are words that will quickly fill your days and nights.
Firstly, congratulations. Because it means you are scaling- you have a product market fit and now growing customers to grow revenue. Great place to be in .
Now, If you’ve handled a sales team before, this is good fun. Meeting candidates, hearing their sales stories, evaluating their fit to the company, assigning roles and responsibilities, compensation discussions, incentives, team building, culture. Wow, its great fun. We leave our imprint on customers, through the sales team they meet. So it’s a big job getting the right team together.
Sales teams are amazing entities which prove again and again that whole is always greater (by many multiples) of the sum of the parts. A good sales team is like a ‘band of brothers’, fighting for your brand as much as their need to win in the market everyday.
So how does one build up this team? And as it grows , how do you still keep in control of this machine?
Sales teams exist at many different scales- 25 member teams, 250 member teams, 2500 member teams.
I will take the largest scale here and then you can use maths to scale down. And the example is B2C distribution at general trade. I will also discuss this at the front line and supervisor level. That’s where the volumes lie, and the real revenue of your company lies.
Question 1: Inhouse or outsourced.
Answer: Doesn’t really matter. Sales teams prefer working for a “brand” and a young company has some distance to go on that front. Pay well, treat them fairly, your team at this stage will have lesser concerns about being in-house or out-sourced. And so should you.
Question 2: Dimensioning a sales team: How do we think about this?
Lets start with the front line: He’s the untold hero of every battle. Infantryman, holding the weapon, fighting for shelf space or customer mind-space (B2B) in the face of competition/ retailer scepticism and often, his own supply chain unable to provide stocks when the order is in hand !!
The first step is to figure out how many you need. Often this is a balance between the rate at which you want retailer acquisition/ servicing:
A typical salesman can make 30 calls a day at the retailer level, with a productivity of 10% at early stage (< 12 months of launch), going to 25% in year 2, 3 and then 50% or higher when the brand is well established.
Usually a six day working implies 180 stores per week to a salesman. If he is servicing them weekly, a salesman has 180 accounts dedicated to him. If the servicing is fortnightly (and it takes some thinking about the right servicing frequency), a salesman has 360 outlets to his names.
Lets work with weekly servicing.
Now depending on the city, and the number of target retailers you set a team size.
Eg: Delhi could have 40,000 stores of interest to you. Therefore a team of approximately 200 sales persons.
Team Salary: Ensure that all the sales guys at this level, come from similar professional experience (years of front line sales). Also, if you’re a B2C foods company, look for similar backgrounds. It will help them hit the ground running.
Salaries will then depend on the city. Metros are more expensive, smaller towns less so. However, expect this pay out to be in the 20-25k range for any stability in the team, with an additional 15-20k in performance incentives. For an outsourced salesman, typically a 10% premium on the market is a fair ask.
People ask me if this salary is too much. Well, anyone making less than 25-30k a month 3 years into his career will never dedicate all their time to your company. They will end up leaving work earlier to take a up a second job later in the evening.
It will be like this. You can accept it, or pay them higher and demand complete dedication. But you cant deny this. So no, its not too high. As yourself what money can buy for 25k a month today.
Q3: How do we supervise a large team?
Span of Control: In our example, we estimated a 200 person sales team for a city like Delhi. Now that’s a small battalion. And as in the army, it would be very advisable to create a supervisory structure. This structure would help in keeping the 200 member team aligned to tasks, trained to perform as per established norms, evaluated- rewarded and replaced as necessary. Motivated. Hungry to win. Basically keeping them fighting fit each day.
Remember, front line sales is a pretty lonely job. And very difficult especially in the early stages of a company, especially with a 10% productivity, he hears “No” 90% of the time. So try and help him stay optimistic and positive at all times. A good supervisor does this as job #1.
The Supervisor: A supervisor is extremely important at any stage of your company. He needs to have at least 6-8 years experience, at least 3 years of man management and the confidence to manage a younger, more brash team. Team management at this stage is a lot about soft skills .Understanding that only “carrots” will create affinity with the front line sales guy (typically a college or high school graduate making 25k a month). Building affinity and loyalty is the first step to gaining dedication.
The supervisor will typically make 2-2.5 times the fixed basis salary of his team (no less than 40k on average. And a variable to match.
The variable should be paid out for:
- #of team members making bonus
- Overall achievement of team target
- Team retention
The supervisor level in an early stage company is the most important. Hire with care. Handle with care. Monitor for exactly the results you need and the behaviour you wish to institutionalise. Is this supervisor spends time in the market, his team will. If he speaks positively about the company, his team will. If he has pride in his work, his team will.
This supervisor will grow to higher levels in the sales leadership structure and hence needs your involvement and interventions.
He will keep your front line together and hence, final business delivery rests large on the supervisor.
Question 4: What’s the view a level above this supervisor?
6-8 Supervisors should typically report into a higher level of management. Typically an Area or Region (a few states).
This Area manager has to be more strategic in orientation. The problems he is solving for you:
- Resource allocation: how should his salesman spend his day
- Productivity norms and how to get there
- Identify by working in the market, the challenges, opportunities
Above this is typically the Sales Head- (if you have more than 3 Area managers in the company, go for a Sales Head). As a CEO, you should never handle more than 3 “Sales heads” in your company.
To find the right resources to help you create and monitor a strong sales team, drop in to GroCurv. We have lots more to tell you.