I thought I’d devote this month’s post to one of the most important things you can do in a business…and that is building a sales force to grow your business fast and that is efficient and effective . I think this applies to virtually any business, and especially to commercial real estate brokerages. In any case, the manner in which you choose to grow your team has a direct impact on revenue of your company. The Prerequisites to Scaling a Sales Team.
Prior to ramping up your team, the most important thing is to determine that sales people and top-line (ideally profitable) revenue growth are proportional. What does this mean? Simply put, the more sales people you add, the more your company grows. Just like testing new products, you will want to test this on a small scale first. You will want to answer the following question prior to aggressive growth:How long does it take and what is the cost to get a sales person to break even?
To answer the question, you need to know the average value of a customer, the cost of the sales person, and how many sales they will need to make per month/year to break even. The best way to answer these questions is to add a few people on a small scale and measure. Then you will have exact numbers you can plug into your model. Every business is different so your model will depend on the specific business you are in. For example, at ProspectNow, we know we can get a sales person to ramp up to full speed in about 45-60 days. This helps us plan exactly what our investment is. Of course this assumes you are hiring the right person. Recruiting and hiring is a completely separate and necessary part of the equation, but for the sake of this blog, let’s assume you are able to bring in the right people.Once you know what the numbers are for your business, you can start to add people efficiently. You want to get to the “just add water” point where your system scales with more people and actually gains efficiency the more you add.Training, Ramp up, and Motivation
With regard to minimizing ramp up time, I’d recommend building a best practices sales training guide that provides the following:
- Calling Scripts
- Objection Handling
- Competitive Matrix
- Best Practices
You will build out this data with the first few reps that you hire, then you will use that information to provide to all new hires. The goal is to get the sales person comfortable enough to get on the phone ASAP because that is where the real learning begins. I am a big believer in the “learn by doing” approach. So the sales training guide is really just a tool to help develop enough confidence to get going.
It’s really important to build a culture of cooperation in a sales environment. If you do this well, then your ramp up time for new hires is even faster because sales people help each other. When someone does well, his or her peers should be happy for that person. I love it when I hear our sales people sharing or borrowing each others ‘best practices’. Each time we hire, our ramp up time has gone down because of this.
Sales should be fun, and competition is part of that…but too much competitive pressure can also have a negative affect. Clearly the first step is to hire people that want to do well. After that, I think that transparency in numbers is a great way for people to be competitive with the back drop of cooperation to ensure it’s not so competitive that it ceases to be fun. What do I mean by transparency in numbers? Specifically, every metric that relates to sales production should be tracked including calls, talk time, meetings, proposals, sales etc. This is absolutely critical because you can develop a correlation to sales success and address issues early. Make sure all sales people can see how they are doing, and learn from those that are doing well. This speaks to the “transparency” part.
If you are a ProspectNow customer, you will see you can track these metrics in the “Activity” section of the website. If you have not used that, give it a try and set some goals for yourself and you’ll see overtime you can start to build a profile of success.
Process and Efficiency at Scale
Sales people should have the infrastructure and tools they need to succeed. The last thing you want them doing is any ‘non revenue generating’ activity. Ironically, this is why I started ProspectNow…because I spent way too much time dealing with property and owner data research. As you are building your sales force, you should think of your internal operations as a business, and your sales people as the customer. This mind set causes you to serve them in a way that helps them make money and in turn makes you money.
You will know you have a solid process and infrastructure when each hire gets easier and easier. Good luck in growing your businesses!