Tuesday, December 12, 2017

3 tips to check that your salesforce is ready to scale

Earlier this fall, we co-organised with Salesforce Ventures the first edition of Cloud Europe, a ½ day event preceding SaaStock 2017 and gathering the founders of the top 100 European SaaS companies. We were lucky to have as a keynote Chris Ciauri, EVP Salesforce EMEA, and he shared a few tips to check that your sales organisation is ready to scale. Here is a quick summary of the key insights with us, which hopefully will help you with your 2018 planning.

1)     Balance your sales management ratios

As software companies scale, the question of span of control in the organisation becomes critical. There is no right or wrong answer and it will depends on your business. But here is what has worked well for Salesforce and is a good starting point for a SaaS business:

·       4-5 first line managers to 1 second line manager

·       6-10 reps per first line manager. 6-10 reps is a wide range: the right ratio will depend on the segment. For small businesses, the number will be closer to 10 and for enterprise, closer to 6

2)     Figure the right formula for your sales support functions

For most SaaS companies, sales reps will be supported typically by Solutions Engineers (SEs) and by Business Development Reps (BDRs) who are cold calling and taking appointments. To be able to scale quickly, each company should figure out the right ratios of these support functions vs. sales reps. The formula will be heavily dependent of the customer segment targeted. Here is the rule of thumb that Salesforce has used successfully:

3)     Build your Sales Academy

Sales and acquisition costs are typically heavily represented on the cost base of SaaS companies and having a short ramp-up time for your new sales hires is a key lever to increase the overall productivity of your organisation. Here are the four key pillars that Salesforce has used to set-up an effective Sales Academy:

·       Send your new hires pre-work: You want your new hires to have a basic understanding of your product functions and differentiation. Send the sales pitch, product sheets and competitive overview to new hires in advance. It is a good step to get them started on the right foot.

·       Develop your sales bootcamp: Stack your hiring to make sure a critical mass of new sales people will start on a given Monday and prepare a bootcamp over several days to get them familiar with the company product and teams. It is helpful for example to have them attend support calls, get an overview of the product roapmap from the product team, shadow experienced reps and, of course, learn the tips from the top people on the team.

·       Prepare a 30-60-90 day achievement plan: The first three months are critical to ramp your reps and it helps to have specific goals each month to measure progress. It also gives them something to aim for, especially in businesses where the first customer close can take time.

·       Don’t forget the badges: as your reps will progress in their tenure, it is effective to attribute badges based on specific achievements. It helps boost morale and competitiveness in the team, when all reps cannot be in the President’s club

At the end of his presentation, Chris gave us a final piece of advice: each month counts! Manage your sales and pipeline on a monthly basis (or try to!), even if you have quarterly closings. Fast cadence is everything in sales!

And good luck to close your Q4!