As a CEO, co-founder, or sales executive tasked with building a team – you may be the sales team of your growing company. But when your startup is ready to reach the next level, you’ll need to build a sales team that’s just as excited about your product as you are. We spoke to several experts with experience in sales hiring and scaling startup sales teams who shared 10 strategies, tactics, and key considerations to help you get started.
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Strategies to Build or Scale a Sales Team
Hire tactical sales roles before executive levels
Many startups make the mistake of starting with a Vice President or other high-level positions when building their sales teams. At this early stage, it’s more important to focus on lead-generating positions that bring in prospects and build your pipeline. In addition, these roles should fine-tune sales processes, work with the CEO to close their first few sales, and then analyze the data from those sales to improve results for the next cycle.
The goal is to have these first hires create a blueprint that a future VP can build on, rather than having the VP start from scratch and go through extensive trial and error that takes time from cultivating prospects and actually closing deals. Right now, the focus of your sales hiring should be about building lead generation through research, initial sales calls and meetings.
Before a VP joins the company, the CEO or other cofounder can take on that high-level strategic role. As Dario Delkic, Sales Manager at Comeet explained, “The CEO wears many different hats in a startup as you’re scaling, but they ultimately need to be the first and the most competent salesperson of the company.” They and the founding team will guide the roles we describe below before handing the reins to a Sales VP.
Start with hiring SDRs
Once you’re ready to make new hires for your sales team, multiple experts suggest starting with Sales Development Representatives (SDRs) to focus on outreach, prospecting, and determining whether or not leads are qualified.
As Justin Turner, founder of SaaS Unicorn explained, “the job of the SDR is to go out and generate sales leads at the top of the funnel, and work through a sales cycle to eventually close those leads at the bottom of the funnel.” He added that companies should be very clear about the expectations for this role. It’s not to be a sales leader or even to be a sales admin. It’s about generating leads and finding prospects.
This is more important than going straight to hiring for higher-level roles. As Turner said, “you need to start to see product-market fit, you need to have some deals through the finish line. And I really believe that around $1 million or so in annual recurring revenue is the best time to start thinking about a VP of sales.”
Carly J. Cais, Managing Partner at Ellespark, a marketing & sales consulting and services firm that advises tech startup founders, agrees, adding that the goal for your first SDR should be “transitioning from founder-led sales to having 1 full-cycle sales rep, training them, and developing your sales process.” Once the first SDR is doing well, said Cais, hire a second who can tee up meetings for the first SDR and the CEO.
Then hire Account Executives
Delkic recommends that once you have SDRs selling your products or services to new customers, it’s time to hire one or two Account Executives. This role will be generating leads and learning about the market along with the SDRs, but they’ll also be managing relationships, and most importantly, closing deals.
He goes on to say that ideally, the SDR generates the first leads, passing them onto the AE for closing and relationship management. This way, the CEO’s time will be freed up to concentrate on only the most critical relationships and high-level deals, with the SDRs and AEs handling the rest.
After six months, the initial SDR and AE roles on a new sales team should have created processes, developed leads, closed deals, generally built out a blueprint for how sales should be conducted in your startup. Once these roles are filled and core processes established, your sales hiring can focus on leadership roles (Sales Managers, Sales VP) to refine the strategy, expand the customer base, and transition the CEO or co-founder from day-to-day sales.
Hire Marketing Leadership to strengthen your sales team
Early on, your startup hiring plan should include hiring marketing leadership. Too often, founders focus on hiring as many salespeople as possible while neglecting the core brand building and positioning. Your sales team needs a good story to tell about your company and product and a strong marketing function provides this.
A marketing leader can support sales teams by providing a narrative framework. They can help your sales team better understand the target audience, position your product, and tell your brand story to current and future investors.
Turner tells us “A sales team and a salesperson are only as good as the leads they are given and the brand they’re representing,” and a good marketing leader will help you build that brand. You should hire for a marketing leadership role while it’s still early enough to hone your processes, documentation, and tech.
Tactics to Build or Scale a Sales Team
Use Automation to streamline sales processes
At this early stage, it’s important to bring in tools like a CRM or similar software to streamline and automate your processes, analyze data, and track your progress. If you don’t have good data, you can’t accurately determine how well you’re performing or find ways to improve.
For example, reporting in a CRM can reveal how sales are doing in one region or customer segment and where they may be falling behind. That empowers your sales team to adjust tactics as well as levels of resources. It can also automate processes to stay in touch with prospects at different stages in the sales cycle.
Automating processes saves time, money, and allows your team to work more efficiently. Before hiring more SDRs and AEs, analyze the performance of the ones you have and figure out opportunities for optimization. As Delkic explained, “We can introduce automation and tools for gathering information, so your sales team becomes better versions of what they were.” It’s important to optimize your current team before going out and hiring more AEs.
Establish and track sales goals KPIs tied to revenue goals
Even before you have your team in place, think about your revenue goals, and the Key Performance Indicators that will tell you how close you are to meeting them.
Some common questions to ask yourself when creating KPIs include:
- How much do you need to make in a particular quarter?
- How much does the whole sales team need to be bringing to meet your goals for revenue?
- What are the sales or lead generation targets for individual SDRs and AEs?
- What conversion metrics do you expect your AEs to achieve?
- Are there sales volumes by location you want your AEs to meet?
- Do you have a closing ratio expectation?
- Is there a certain number of proposals your AEs must send in order to meet sales goals?
Remember KPIs should be created for your specific industry, company, and revenue goals. Having a CRM along with other systems can help you track and refine these goals while providing visibility as to how well the entire sales team and individual sales team members are doing so you can make adjustments tactics as needed.
Build a strong sales team culture
When hiring a new sales team, Elijah Elkins, the Senior Manager of Recruitment Services at Comeet, emphasized the importance of building a strong, empowering culture. Sales can be notorious for burnout. Some companies can be so focused on closing deals that they develop a “churn and burn” mentality that encourages deals at all costs. This approach doesn’t consider the sales team’s mental health or their performance over time.
Considering mental health and long-term performance doesn’t mean neglecting KPIs and sales targets. It means sustainable growth is a long-term game and it won’t happen if you’re spending time hiring new people after every sales cycle. “If you’re going to be in sales, you need to be driven and ambitious,” Elkins added, “but you also need to have a heart for people or you’re just going to burn out your sales team which will ultimately hurt revenue anyway.”
Build robust training and onboarding
Training and onboarding should be included when building your hiring process. A sustainable and successful sales team starts with a strong training and onboarding period. It not only increases product and company knowledge, it also increases retention and loyalty within your sales team.
Onboarding should not only include sharing key sales data and information about markets, regions, and customer behavior, but also an introduction to the company and the product.
Sales team onboarding and training should answer questions like:
- What makes the company and products special?
- How do the product and company stand out from competitors?
- What has worked to generate leads so far?
- What do you (CEO or first sales hires) wish you had done differently when first getting sales off the ground?
It might seem challenging to build a new sales training and onboarding program when there isn’t a longstanding foundation in place. But even small startups can use insights gleaned from the CEO’s or co-founder’s first sales as the basis for a written training guide or sales orientation workshops.
As part of onboarding and training activities, it’s important for initial SDRs and AEs to shadow the CEO or cofounder on both internal and external meetings related to sales. Any opportunity to listen, observe, and absorb the sales lifecycle and company culture will make them stronger members of your sales team.
In addition to onboarding and initial training, ongoing sales training is key to long-term success. An effective way to train over time is to conduct debriefs at the end of sales meetings or calls. Debriefs present an opportunity where new hires and sales managers (or CEO, Co-founder, or Sales VP in the very early stages) can reflect on what went well, what needs to be improved, and any additional feedback that would be helpful.
Build a compelling compensation and rewards system
Small startups may not be able to offer the highest salaries in their industries, but that doesn’t mean they can’t effectively compete to attract top talent. Before implementing your hiring process, start by researching comparable salaries in your industry, and region. Figure out how many hires you can comfortably make with that range, and start your sales hiring slowly.
As part of your startup hiring plan, consider other things you could offer to attract and retain the talent you want. Get creative with additional benefits.
Consider the following:
- How robust is your health insurance?
- Can you offer extensive paid time off?
- What about a flexible schedule or, as is increasingly common during the COVID-19 pandemic, the ability to work remotely?
- Would you consider stipends for upgrading home offices?
- Are you willing to pay for gym memberships or similar perks?
A significant aspect of sales hiring for startups is creativity. Consider tying certain perks to performance. For instance, meeting and exceeding sales goals means winning a gym membership or additional paid time off. Make these incentives more meaningful by getting to know ideal candidates as they go through the hiring process and what perks may motivate them to succeed in their roles.
In addition to creative perks, consider offering startup hiring incentives like equity in the company in exchange for a lower salary at first or stock options. Many top sales professionals whose values and goals align with your company’s would be excited to have stock options or equity as part of their compensation package.
Other Key Considerations
Hire for Passion, Potential, and Culture Fit
Once you’ve reached the point of recruiting, multiple founders and experts we spoke to emphasized that you don’t have to hire industry veterans. As Katherine Brown, founder of Spyic, a parental control app, said, “Your job listings should reflect that you are looking for motivated self-starters who are hungry for experience. It’s about attracting talent with passion, knowledge, and ambition.”
Ben Hulme, Founder of Hulme Redwood, a UK-based sales and business development service company for the health sector advised that you ask yourself of each candidate, “Does this person really care about your market, and what is the personal connection that motivates them to help you grow?”
For SDRs and AEs that don’t have software or startup sales experience, consider whether or not they have done something similar. The question Elkins asks the most when recruiting is, “What is the most significant and comparable accomplishment that you have related to this position?”
Also, when you’re ready to hire the Director or VP of Sales, Turner warns, “Do not go out and hire a sales leader from a giant company. Target a sales leader who is willing to prove themselves. They’re humble, they’re hungry, they’re smart, and they grind it out. You want a sales leader who is willing to get their hands dirty.”
Embed Company Mission and Values
“The best way to create a strong foundation for your growing sales team is to ensure that every member is passionate about the company’s mission,” says Patrick Crane, CEO of Love Sew, an online marketplace and community for crafters. You can have the most talented salespeople, but if they don’t understand or align with the mission, that won’t relate to potential customers, and won’t generate impactful sales.”
After the onboarding period, it’s important to continue this team-building culture and sense of comradery. Regularly celebrate wins both large and small. Acknowledge sales team members’ efforts, offer them rewards for exceeding their goals or making significant contributions to the team.
Strategy is More Important Than Speed
All of the advice above may seem counterintuitive in industries that prize scaling fast. It makes sense as a start-up, for your company to be moving fast, pivoting, and changing priorities all the time. But this early stage is the best time to be thoughtful and strategic about your startup hiring, to make mistakes and learn from them, slowly.
You can’t achieve your ultimate goals if you don’t have a capable sales team in place. If you want a team that cares about your company as much as you do, find them by establishing an effective hiring process. Also, train, position, and build a culture for them, so they want to sell long-term.
Build your sales team from the ground up and not the top down by starting with an effective hiring process. Learn from the SDRs and AEs before hiring a VP of sales. And as part of your startup hiring plan, don’t forget marketing. That’s what will set your sales team and your company up for long-term success.