It’s an unfortunate truth that more bodies do not necessarily equate to more sales – but an understaffed team will not be able to take full advantage of the opportunities available.
This is particularly frustrating for small ventures or those with limited funds: hiring seems like a worthy investment for bringing in revenue, but when funds are tight is it really worth the expense? Thus, before hiring more staff, you might want to examine your operation in order to better scale your team.
Know your customers
For businesses, software is a means to an end. Software buyers are looking to improve the running of their business: there might be issues with the current way of working, or they are just looking to save time and money by using a new system (hence Software as a Service, or SaaS). It’s said that buyers can take 27 steps to becoming a paying customer and many of them will have to be facilitated by your sales executives with calls and emails.
Selling software: hunting & farming
Broadly speaking, selling software is split into two stages: hunting and farming. In the hunting stage, prospective clients are identified. This can vary from collating a database of companies who may have expressed interest in the product: this doesn’t necessarily mean that the client has made direct contact, but may have interacted with advertisements or articles.
At this point, more hands-on deck may seem appropriate: it’s a lot of trawling through information to determine which businesses will be receptive, and then there’s finding more specific details such as a point of contact, company’s size and budget, and tailored suitability (which particular aspect is going to work well to target company’s needs).
It seems clear-cut: if the workforce can’t make the most out of the prospective clients, then increase headcount, within budget. But how many should you hire? What if there was a magic formula to calculate more precisely how large your sales team needs to be?
How to scale your software sales team
Imagine you have 250 prospective clients: they all need to be approached, sent follow-up emails, shown demos, and provided with support before they purchase. You’ll know how much you need to be in touch with your clients before they buy, but for this example we could work out these connections as one approach, one follow-up, two demos, one support, and one purchase (six connections per client).
One hundred previous clients also need follow-up calls to check for any issues, as well as to offer upgrades or additional services. So, in this example, we have 6 x 250 connections to be made, plus 100 single follow-up calls, totalling 1,600.
Most campaigns work on a quarterly basis, so we’ll use that in our example: our timeframe to take 250 clients from approach to purchase, as well as connect with 100 previous clients, is therefore twelve weeks.
Each sales executive has time for five connections (calls or demos) a day.
With five working days a week, this means a sales executive can make 25 connections a week, or 300 per quarter.
This is considering every working day of the quarter as available but you to take in consideration the fact that each team member is going to have a number of days off work, whether for holiday, sickness, or training. In this hypothetical scenario, each sales executive is going to lose approximately 50 connections, meaning that 250 are possible over the quarter.
If one sales executive can take 250 of the 1,600 calls per quarter, this means the sales team needs a total of 1,600 ÷ 250 = 6.4, or 7 team members.
It’s a relatively simple formula, and can be adapted as the company grows. Your team may also diversify, for example some team members focus on providing demos (which will be much more time-consuming) and others sending more general follow-up emails that can be sent as a template to many clients at once.
Using this method is a free way of estimating the scale of your sales team without the costly method of trial and error.
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