Having been a part of and knowing of many sales teams in the financial services industry I have experienced first-hand those teams that were successfully put together and those that were not. I have come to find it comical that sales managers believe that the more salespeople you have the bigger the revenue your team will generate. The same 80/20 rule applies when building a successful sales team; 80% of your sales will come from 20% of your team. So why do sales managers want more and more people on the team? Is it to build bench strength in case one of your top-performers leave? During this blog I am going to provide you with one of many examples of how to build a strong sales team with long-lasting results.
Example 1: A small, but powerful sales team
Let’s use for example a mid-sized broker-dealer in the industry that on average has a Business Development team of 10 people What you will see amongst that team is that you have 2-3 people that are closing 80-85% of the company’s overall recruiting goal each year. The other 7-8 are typically closing 70-85% of the corporate goal set for them. So why is it that they remain in the position they are in? It’s because sales managers look at it as they are steady salespeople that close consistently 70-85% of their goal and the 2-3 top-performers will make up the difference. What’s wrong with this scenario is that the top-performers are left wondering why they are receiving the same salary while they are closing 40-50% more than the rest of the team.
Here is a much better scenario that would also save the company financially. Let’s say of the 10-person sales team 3 of them are top-performers and consistent closers. Surround those 3 top-performers with additional support and resources that allow them to focus on closing business and you will get even more business closed. For example, if you hired 3 junior recruiters (one for each recruiter) and 3 administrative people (one for each recruiter) this would allow your top-performing salesperson to focus solely on meeting with prospects and closing business. Rather than having a team of 10 salespeople, you have a collective team of 9 with a lot less cost.
Let’s dive into the numbers:
Sales Team of 10 people with 3 of them closing the majority of the business:
In the industry it is standard that a seasoned recruiter has a base salary of $100,000. If that is the case your payroll for your sales team is $1,000,000.
Sales Team of 3 people with the necessary support behind them:
If you take your top 3 performers and pay them even more than industry standard so you don’t risk losing them over time a base salary of $150,000. Your junior recruiters a base of $70,000, and your 3 administrative people a base of $50,000. Let’s do the math, $150,000+210,000+$150,000= $510,000 in annual salary versus $1,000,000 above.
If you pay your top-performers like you should and even more, allow them to focus on closing business which is what they are good at, and provide them the necessary support to do all the administrative stuff that great salespeople are not good at nor enjoy you will achieve even greater success as a company.
In closing, having a big sales team is not always a bad thing. The purpose of this blog is to showcase that just because you have a large sales team does not mean that you are going to close more business. Just because you have a smaller sales team also does not mean that you are not as competitive and closing as much business as your peers, you are just doing it in a different way. The importance is ensuring you pick the right professionals for the team when using the above matrix.