Most small and medium-sized businesses are well adjusted to running a lean team. Doing more with less might be how you crawled and scratched your way to profitability, or simply how things are done in order to compete with the giants in your industry.
Generally speaking, that is both commendable and beneficial. At the same time, it can also go too far. Running too lean, especially on your sales team, can stall your sales conversions, ultimately leaving money on the table and inhibiting your business growth.
Of course, you cannot expand too fast, either. A bloated sales team can depress profit margins without bringing tangible value to the business. Instead, you need to be strategic about the time you pull the trigger and start the hiring process. These 4 signs can help to alert you that it’s time to grow your sales team.
1. You’re No Longer Meeting Sales Targets
Let’s start with the most obvious sign – you’re no longer able to keep up with sales targets as you scale. While this can indicate a need for expansion, there can be other factors at play. Before you bring on a new team member, make sure these other obstacles aren’t impacting your growth:
- Not enough leads. Even your best sales reps will miss quota if they don’t have enough at-bats. Take the time to learn each rep’s average close rate and reverse engineer your prospect goals from there. The first step to hitting sales targets is hitting lead generation targets.
- You aren’t qualifying prospects. Let’s say you hit your goal of 100 sales calls – but only 10 of them are with decision makers. Unqualified prospects will waste the time of your sales reps without moving the needle forward. Take the time to develop your ICP and buyer persona and build a segmented, targeted prospecting campaign to reflect that.
- Your current sales people lack training. It’s crucially important that you understand the close rate for each of your reps and develop an internal benchmark. All reps need consistent mentoring to improve their own processes and move past their blind spots.
If your team is trained and your prospects are qualified but you’re still struggling to meet quota, it might be time to grow your team.
2. Your Team Lacks Bandwidth
Even if you are meeting your sales target, be diligent in noticing the early signs that your reps need reinforcements. Keep an eye on the entire sales funnel and notice when things start to fall through the cracks.
One notable sign is when your team is so occupied with prospecting and introductory calls that they don’t actually have the capacity to follow up with warm leads and get them across the finish line. While you may need to help your team prioritize the highest-value opportunities, your reps may be stretched too thin to cultivate meaningful relationships with prospects. If you begin to notice your close rates dropping or individual deals stalling out mid-cycle, you might have a capacity issue. Once your reps no longer have time to close, they might need reinforcements.
Of course, the inverse of the above could also be the case. Closing brings in revenue but if your team neglects top of funnel activity, your funnel will stagnate. Once your team stops developing and nurturing the top of the funnel while closing out everyone currently in the pipeline, there will be no qualified prospects left. That, in turn, leads to inconsistent revenue and a scrambling team looking to achieve their quota. Your team needs the bandwidth to support their prospects at every stage of the buying journey.
3. Individual Quotas Don’t Add Up to Your Team Quota
This one is simple math. You likely have organization-wide sales quotas and new revenue targets within a given time frame to support and grow your business. Once you understand the average close rate of each of your reps and your organization’s capacity to generate leads, that quota is then divided amongst your team in the form of individual rep quotas.
If your individual quotas either don’t add up to your team quota, or need to be unrealistically high to match that team quota, this is one of the most clear-cut signs that your sales team is no longer large enough. You need to expand it in order to reliably bring in the revenue you need to sustain your organization financially.
4. Employees Burnout and Attrition Begins to Rise
The previous sign is purely financial. This one is directly related to the people bringing in those financials. Overworked employees will begin to burn out and become less productive. Over time, attrition begins to rise as they seek employment elsewhere.
Burnout is becoming an increasingly significant problem in the sales profession. When it happens, your agents will no longer be able to support your sales pipeline effectively, even creating diminishing returns in leads and opportunities that might otherwise be within their capacity. Expanding the team can help guide your ship back in a more balanced direction.
Reliably Predict Future Sales Needs
Over time, you’ll be able to more reliably predict future growth in your business. Years of steady increases, a comprehensive understanding in the market, and in-depth competitor insights may all help you to forecast just where your sales will stand a year from now and how you can align to those demands accordingly.
A predictable forecast of future sales based on past evidence can help you better determine the ideal size of your sales team.
Each organization has unique needs and finding your sales team’s sweet spot can be a challenge – especially while scaling. In times of uncertainty, it’s usually better to go lean. Don’t hire new sales reps simply because of a hunch; take the time to figure out the best formula to meet your revenue goals while setting your sales team up for success.