Why Growing the Sales Force May Not Be Your Best Investment Strategy for Revenue Growth

In a recent post, I introduced on a common scenario that sales leaders encounter whereby the CEO asks the chief sales officer to substantially add salespeople to the sales force to grow the bottom line. We see this strategy repeated over and over again and, unfortunately, it very frequently leads to deeply disappointing results for the CEO, investors, the board of directors, and the sales leader. Growing the sales force to grow the bottom line seems to make common sense, right?  Well not exactly. Here’s why.

 

What is the desired impact of adding salespeople?

First, let’s look at what impact the stakeholders envision with the “add salespeople” strategy.   Driving increased revenue and bottom line growth is anticipated from more salespeople acquiring more new customers.  These representatives may be deployed in new geography to broaden the company’s footprint, or they may be added within the existing footprint where, with more salespeople, the company can reduce the number of accounts per salesperson with the expectation that those reps will invest more time with each buying customer to sell more offerings (cross-selling) per company.  

 

Why doesn't adding salespeople produce increased revenue and bottom line growth?

There are really three factors for why significantly increasing the number of salespeople often doesn't result in expected financial growth.  These are:

  • Unrealistic timelines associated with the expected results 
  • Unanticipated expenses with adding and supporting salespeople 
  • Unanticipated risks
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The CEO Says Hire Salespeople! What's Next?

Your CEO just gave you your marching orders.  “We’re going to organically grow the top line and profits by 30% over the next year.  We’re going to grow the sales force to make this happen.  I’ve discussed this with the Board and they agree with the strategy.  So tell me what you need to accomplish this and let’s move forward.” 

As a sales leader the opportunity to rapidly grow sales seems exciting.  You’ve got the backing of the CEO, and the Board of Directors.  You’ve got air cover.  You’ve got a mandate.  This is the stuff that great success stories are written about (and great resume’s), right?  Yes it’ll be hard work, but you can just envision a year from now when your boss recognizes your success in growing the business on a big stage.  

As the Chief Sales Officer, one of two options is now available to you.  

Option #1

Your boss, the CEO, told you to jump and you answer “How high?”  You’re going to do exactly what your CEO told you to do.  So you gather your management team and enthusiastically communicate the challenge and opportunity ahead.  They’re all for it and will help rapidly put the plan together.  You talk with your counterparts in Human Resources, Training, and Sales Operations (who will coordinate with Facilities and IT for the required resources).  They’re all behind you (after all, this comes from the CEO).  A week later, you present your formal plan to the CEO and tell her that interview scheduling is already in process.   You’re on your way to growing sales and being a visible leader in a great success story.

Option #2

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Understanding How Value Adds Up for Buyers

Lots of leaders believe that their sales force (and marketers, product developers, etc.) know their buyers. I disagree. Well, they may know their names and titles and a bit more. But let’s get real. Do the majority of your salespeople really understand how their buyers actually perceive value in what your company provides?  

Look, I love the sales profession and am committed to keeping it relevant in the new economy.  So I am not bashing Sales.  But "Houston, we have a problem" with selling, because too many of our sellers don't understand how buyers really calculate value.

What’s to Understand?

As a sales manager, sales leader, and business coach prior to joining Forrester, I’ve had thousands of opportunities to observe professional B2B salespeople from many companies and industries in meetings with prospective customers and clients.  I’ve reviewed countless business proposals and presentations before they were put in front of IT and executive buyers. This experience has informed me that far too many (and I mean FAR too many!) salespeople lack understanding of the basis for which a prospective customer is really making a decision.  Let's not point fingers. Let's just help salespeople figure this out.

Think about your own buying experiences.  Out of all of the salespeople who you’ve ever interacted with, how many can you think of who asked the right questions to really truly understood what you were trying to accomplish and what you and your company were most concerned about (other than price)?  For me, just a small percentage of salespeople stand out in my mind.  And they do stand out, even after many years.  How about you?

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Key Learnings from the Sales Enablement Forum

Like many other sales leaders, the sense that tectonic shifts in the dynamics between buyers and salespeople are happening has been palpable to me for a number of years.  Researching these changes is why I joined Forrester just weeks before this year’s Forrester Research Sales Enablement Forum.  At the Forum, I had a number of surprise learnings or “aha moments” gained from colleagues and members of our Sales Enablement Council who are learning in real time as sales enablement practitioners. 

A Cross-Organizational System Issue

The seemingly endless search for the right “solution” to improve sales performance feels like a continuous plodding pilgrimage for many sales leaders.  What I learned at the Forrester Sales Enablement Forum, and have experienced with new illumination since, is why the silver bullet solutions (i.e., tools, programs, training, materials, promotions, technology) that leaders in sales, sales operations, HR, and sales training invest in really ever meet our expectations for delivering better overall top-line performance.

There is true chaos that exists in the selling systems of most companies. Various business functions scurry to support the effort of increasing sales. My core learning from the Forum was that we have to ask whether we even have a selling system. My realization in working with clients over the past five months is that most companies “enable” their sales forces through dis-integrated, costly, inefficient, and ineffective multifunction (as opposed to cross-functional) silos of investments that have a poor performance improvement yield. 

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