Will Hiring Salespeople Stimulate Growth?Read time: 6 minutes
The majority of companies that I’ve worked for firmly believed, from the very top, that the way to grow more was to just hire more salespeople.
It doesn’t work. Hiring more salespeople doesn’t immediately make your business more successful.
And it doesn’t work because:
- Salespeople are expensive
- Existing salespeople are often not hitting their capacity
- No thought may have been put into enablement or process
- All else equal, lead gen doesn’t keep pace if you just hire salespeople
The problem is not the lack of salespeople if those people aren’t performing.
How Do You Know If This Applies to You?
I’ve worked for companies where, walking in on day one, peoples’ average quota attainment was 40%. Even then, they thought the answer was hiring more salespeople.
Unless you’re at 80% attainment with everybody (or near everybody) on your sales team, your problem isn’t adding to sales. Your problem is generating interest within the market and supporting your existing salespeople. (An exception might be that your quotas are too high, making attainment artificially low.)
Why 80%? There’s no hard reason for 80% to be the magic number for quota attainment, but it helps to assess whether adding Sales capacity will be profitable. If most of your reps are near quota, then you clearly have enough support for your team to do well. Enablement, Training, Product, and Lead Gen must all be performing well enough at some level.
In a world where you’re at <50% attainment, it’s probable that your reps aren’t supported enough or profitable enough. Adding more is just going to dig yourself deeper into a hole.
A salesperson is a portion of a workflow that has a certain capacity, and if you’re not utilizing that capacity, the answer isn’t adding more capacity.
Let’s visualize this. Say your company generates 100 leads a month and you have 5 salespeople. Your salespeople generate 25 of those leads (5 leads per salesperson) and Marketing generates the other 75.
If you add 5 more salespeople, without changing anything else (i.e., fixing any root problems), then each salesperson just went from having 20 leads to work (their 5 plus 15 from Marketing) to only having ~12 to work (5 plus 7.5 from Marketing).
If your team wasn’t hitting quota before, they’re certainly worse off now – while you just drastically increased your expenses.
You might sell a little bit more overall, but that’s quickly offset by loss of net profit, morale, and performance. It’s incredibly shortsighted.
A better path is to investigate the reason behind your low sales attainment.
There is either:
- A skill gap
- A product gap
- A pricing problem
- Or a lead flow problem
If you can pin down the root cause of stalling sales, implement the right solution, increase your sales attainment until you’re at capacity with your salespeople, then the next step would be hiring more reps.
So let’s look at some possible culprits.
You Might Have a Skill Gap If…
Win rates are low and upon closer review, many lost deals should have been winnable. Reviewing sales calls and CRM notes reveals mistakes and/or lack of compliance with the sales process.
Solution: Improve training and onboarding for new salespeople or look into hiring more experienced reps.
You Might Have a Product Gap If…
People don’t seem to feel the pain that your problem solves or they aren’t convinced you can solve it. You’re consistently losing to competitors, you have high churn, and/or CS is overwhelmed with tickets. You may also feel the need to customize or highly configure your product for every deal. (This is all assuming you’re selling to the right ICP in the first place!)
Solution: Do some research into customer usage, complaints, and feature requests. You might need to revisit product-market fit and develop a more product-led growth strategy.
You Might Have a Pricing Problem If…
Pricing is consistently a dealbreaker objection. Competitors might be offering similar or better products with better price points and/or contract terms.
Solution: Increase sales enablement to better show the value of your product and why it’s worth the cost. If pricing is actually off the mark, you might need to go back to the drawing board with product, product-market fit, your pricing structure, or your packages.
You Might Have a Lead Flow Problem If…
Your salespeople aren’t supported by enough quality leads and they’re stuck sourcing all of their own pipeline. This is expensive for you and super inefficient for them. Bad combo!
Solution: Increase lead flow by hiring SDRs, reviewing your marketing channels, or creating a new campaign. It’s also crucial to validate that you’re in the right market – meaning the opportunity is large enough to support your team’s goals.
Take This With a Grain of Salt
This is a simplified explanation of these problems and their solutions. In practice, it can be a little more complex. You might have to spend some effort looking under the hood (or have an expert do it for you) to get to the bottom of the issue and devise a plan to fix it.
If there’s one thing you should take away today, it should be this: Do more with what you already have until your need to hire salespeople comes from an overflow of opportunities, not a lack of them.
- More salespeople does not equal more revenue
- Unless your sales team is over 80% quota attainment
- Instead, investigate the reason behind your low attainment:
- A skill gap
- A product gap
- A pricing problem
- A lead flow problem
- Do more with what you already have
- Until you have an overflow of opportunity, not a lack of it
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