A Scalable Sales Machine

“Without measurement, there can be no improvement" – David Skok, General Partner at Matrix Partners
Sales machine

If you haven’t read our previous blog post: Product/Market Fit: Customer Lifetime Value and Customer Acquisition Cost. Check that out to make sure your company has achieved Product/Market Fit and is ready to scale it’s sales team.

If you’re confident that you’ve achieved PMF, it’s time to raise funding (if you haven’t already), start aggressively hiring salespeople, and grab as much market share as possible before new competition emerges or the market shifts.

But you can’t just hire 20 reps, sit them down at a desk, hand each one a phone, and expect great results. First you need to build a scalable sales machine. What is a sales scalable sales machine? It’s characterized by: a steady pipeline of inbound and outbound leads, a clearly defined lead hand-off process at each step of your sales funnel, and consistent and predictable revenue growth from each additional sales rep.

Analyze Each Step in Your Sales Process

The first step in creating a scalable sales machine is modeling your sales process and analyzing each step. Start with your bookings and work your way back to the beginning. At each step, dissect the relevant metric and measure the conversion rate between steps. By understanding the exact path a prospect follows through your funnel, you can identify blockage points and leaks that prevent them from becoming a customer.

This workflow is based on David Skok’s guide to Building a Sales and Marketing Machine, which I highly recommend reading in its entirety.

Inbound vs Outbound sales

This exercise shows how each step of your sales process is connected, and allows you to isolate and inspect each step:  

If my number of closed deals decreased this month, is it because my Account Executives completed fewer demos or because they did a poor job converting from demo to close?

If the conversion rate was adequate, that indicates that the problem was the # of Completed Demos. Did my SDRs schedule fewer demos this month? Or did a greater than average number of prospects schedule demos and not follow through?

My SDRs scheduled a similar number of demos as last month, so the issue is that leads are not following through with their scheduled demos. There are various ways I can fix this: have my SDRs follow up with leads more frequently to reduce drop-off, schedule demos sooner, or instead of scheduling demos, have my SDRs get the lead on the phone and transfer them to an AE while the lead is still hot.

This process is similar to finding the dead bulb in a string of Christmas lights. If my # of Closed Deals is the bulb: the # of Completed Demos is the electricity flowing from the previous bulb and the Conversion Rate is the filament turning that electricity into light.

If my bulb isn’t lighting up (low # of Closed Deals ), I first check the filament (Conversion Rate). If it isn’t turning electricity (Completed Demos) into light (Closed Deals), I know I found the issue and I can take action to fix it. If the filament is fine, I check the wire to see if electricity is coming through and inspect the previous bulb in the string for issues. I keep repeating the process until I have identified the blockage point.

HireKeep’s latest ebook,“Signs It’s Time to Scale Your Sales Team,” will teach you how to:

  1. Recognize qualitative indicators of product/market fit
  2. Determine if you have achieved product/market fit based on the Lifetime Value of a customer and your Customer Acquisition Cost
  3. Redesign your product based on customer feedback to reach product/market fit
  4. Analyze each step in your sales process, create an accurate model, and use it to simulate potential changes to your process
  5. Inspect your sales pipeline to calculate whether it can support more sales reps
  6. Inspect your sales pipeline to calculate whether it can support more sales reps
  7. Conduct a break-even analysis on the 3-year return on investment of additional sales people (free Excel spreadsheet included)
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