Although a sales team structure comes in many sizes and shapes, a well-structured sales team can make a huge difference to their performance. How do you choose the right structure?
Let’s take a look below at some of the most popular structures:
Three Sales Team Structures to Build A High-Performing Sales Company
Your product is growing in popularity. You are gaining traction in your market. Now you want to take it further. Your first basic sales model has brought you incredible results.
After considering all factors and looking at the market you have made the decision to build your sales team.
This is the time to choose which of the three sales teams is best suited.
What’s the next step?
This is a critical juncture for many startup founders and one that many people struggle to understand. Salespeople are often compared to cowboys who arrive at work with guns blazing. The best salespeople are those who go the extra mile. They are proactive and take charge. It might seem best to hire top-notch sales talent and let them manage the show. This will result in a great sales team.
You would be wrong. According to a Harvard Business Review study
50% of high-performing sales organizations have well-documented processes for selling, which are clearly structured. This compares to 28% in low-performing ones.
You can’t just hire sales reps randomly and expect your business to grow automatically.
As a founder, it is your responsibility to choose the best sales structure for your company and culture. To enable your sales reps to be successful, you need the right tools for managing their sales. Your sales professionals will be able to thrive in a high-growth environment.
These are the three basic sales departments that you can use to increase sales and build a high-performing company.
Sales team structure 1: The island
The traditional “sell or die” model of sales organization is the island model. Your team will be provided with basic back-end services such as training and a selection of products they are allowed to sell.
This model assumes that each sales rep is responsible to manage all aspects of the sales process. They must generate leads, qualify them and close them. These reps are more aggressive.
They are more aggressive in fierce competition with both the larger market and their own teams.
Every member of your sales team can be considered an entrepreneur.
This structure will make it much easier to manage your sales team than traditional sales operations such as financial services or realty. Think about your average real estate agent. She will pretend to be a representative of a larger agency, such as Coldwell Bankers or Corcoran Group every day she walks into her office.
She will promote her listings by herself, posting them online and calling prospects.
- On a one-on-one basis, there is little need for managerial oversight
- This is a great choice for simple sales processes like a call to close a product or one or more calls.
- This creates a highly competitive sales environment
- Each rep is unique so you have less control over how your brand is displayed in the market.
- It can be difficult to keep track of key sales metrics since everyone does everything.
Startups should not choose the island model. It is too competitive and aggressive, but there are always exceptions. It is most useful for companies that work in established markets with high levels competition.
For high-transaction sales processes that are low-complexity and high-transaction, the island structure is ideal. Sometimes, simplest is best.
Sales team structure 2: The assembly line
The assembly line was Ford’s engine of the Industrial Revolution. It also built the iconic Model T.
Your sales team can benefit from the assembly line structure. Your potential customers are your raw materials. They are then cultivated, refined and sold throughout the sales cycle.
The assembly line often breaks down a sales team into four groups by function.
- Lead generation team Responsible for generating leads, gathering names, numbers and data, as well as phone numbers.
- Sales Development Representatives (SDRs): Also commonly referred to as Qualifiers/Prospectors. Sales development reps reach out to prospects and ask them questions that are focused on customer needs and identify decision-making processes.
- Account Executives are responsible for closing the deal. They contact qualified leads, conduct demos and manage objections to close the deal.
- Customer Success team: New customers are transferred to this group after a deal has been closed. They are focused on customer satisfaction, account management, and ultimately increase lifetime value (LTV). They can also help customers to upsell to higher plans.
Your sales team can specialize with the assembly line. Each stage of the sales process is assigned a team. Customers move through the sales funnel from leads to qualified prospects to new customers.
They are then passed on to the next group.
Each unit on the assembly line performs a different function. This allows you hold each team responsible for the sales metrics they are responsible.
It is easier to find bottlenecks in your sales funnel, and fix them by specializing the team. For every 100 leads, you might set a goal of closing 12 deals. You can look at each stage of your funnel and identify the friction if you are able close five deals out of every 100 leads.
Your AEs may close 25% of qualified leads, but your SDRs can only qualify 20%.
You can jump in to find out what’s going on with your SDR team. This could be a problem that affects one member of your team or the whole team. You could offer data-driven coaching and training to SDRs to help them reach their larger sales goals. A great way to fine-tune your sales engine involves looking at the segmentation of your funnel.
Even if there are only two sales reps, you can start specialization quickly. One person should be focusing on prospecting new clients, the other on closing deals. This is based upon their natural talents and abilities.
Use the 80/20 rule to determine when new stations should go up on the assembly line. It may be a good idea to transfer the secondary function to a specialist if your reps spend 20% of their time there.
- This structure of sales departments provides predictability for your company
- It allows you to easily pinpoint and laser in problems in the funnel.
- Higher specialization in your sales team means greater efficiency
- It is difficult to divide sales reps into 4 teams when you only have 2 sales reps.
- The ability to break down the funnel into stages can reduce friction and allow customers to handoff customers as they move through it.
- Because they are highly skilled, each team member becomes less connected to the overall business goals. Instead, they are more focused on their individual metrics and numbers.
Startups will find that an automated assembly line is the best option. It can simplify your sales cycle, increase sales efficiency, and scale up your team. Your sales cycle will be complex and will get more complex as your business grows. Your annual customer value (ACV), will increase.
It is therefore important to have dedicated sales personnel for each stage of your customer journey.
A strong assembly line sales force structure creates a repeatable, reliable process for nurturing leads. As you grow your business, your funnel becomes a revenue-generating machine.
Sales team structure 3 The pod
A pod works in a similar fashion to the assembly-line sales model, but it creates close-knit groups, or “pods”, that are made up team members who play different roles. A podular organization is customer-centric.
A six-person sales team would include three SDRs, two AEs, and one Customer Success representative. Instead of large teams you create small groups with specialized roles that are responsible to specific customer journeys.
You can still use the roles we have described with SDRs, Customer Success Reps, and AEs. Instead of having SDRs and Aes competing against each other, you can create a podular organization for your sales professionals to use to compete with other pods. Each pod works together to win customers and keep them happy.
They are more flexible and can think of their own ideas.
The pod allows you build a modular and flexible structure that is more flexible than the traditional model. Because success is measured in pods, each member of the sales team has a better and more complete view of the company. Pods allow for more meaningful connections between people who work together.
You can create pods that focus on specific industries, verticals and countries.
This is what Etsy does outside of sales. They divide their team into 10 teams: 6 engineers, a designer, product manager and analyst. Each team is given a problem to solve and a metric for measuring success.
- Because pods work in close-knit groups, your sales team is not only concerned about their own steps but the entire customer journey.
- High empathy and understanding in pods leads to less friction and better communication
- Pods are more adaptable, flexible, and agile than traditional computers.
- The pod structure allows sales reps to work together to achieve their goals.
- Each member will become more “jack of all trades” as they gain more expertise in each role.
A pod structure in a sales organization is basically an improved version of the assembly line. This structure is great for mature startups who want to maximize their sales resources to tap into new verticals or markets.
Competing in a competitive market can be difficult when there are well-run production lines, aggressive companies and a lot of competition. The pod model allows for flexibility and efficiency to be traded. If you are well-established in a market, organizing your sales team into pods will result in a highly flexible sales team that is ready for any challenge and ready to seize on opportunities.
How to create a sales structure
A well-organized sales department structure is essential. Harvard Business Review conducted a study that found sales teams with well-organized structures perform better than those without.
You must decide on the best organizational structure for your sales team and identify the problems within it. This means that you will need to determine how to organize your sales team based on the industries, products, and geographic locations of your clients.
It is important that you consider the unique traits and specialties that sales reps possess. This includes looking at past achievements and how they have contributed in your company.
These are some of the changes you can make to your sales organization
- Reduce conflict among team members
- Increase sales team member engagement
- A sales team that is more ready to deal with a variety situations.
- Collaboration between team members improved
- Better communication between coworkers
- Clearer communication about team goals and expectations
- Better decision-making is possible when the team’s expectations and goals are considered.
- Potential for more sales and customers with a cohesive team
You can reap the benefits of a well-organized team by taking the time to evaluate your clients, industries and geographical locations. This information will allow you to identify the best people to fill the positions based on their individual strengths.
Remember the culture
There are two things you should aim for when organizing your sales team:
- Drive maximum results.
- Your company should have the best culture.
Take a look at the competitors in your industry. What are their sales teams structures? You don’t have to copy their work. It is not necessary to copy what they are doing.
It is crucial to choose the right person to lead your sales team when you are building it.
Ask yourself the following question when creating a sales team structure: “What kind sales staff are we?” What culture are you trying to create? Your startup’s early stages will determine how your sales team is structured.
This will impact your company’s ability to grow and scale. Don’t leave it up to chance. The right sales model and the right team can help you build a lasting sales organization.