When it comes to scaling your sales organization there is definitely a right and a wrong way to do things. The right way means scaling your sales organization efficiently, encouraging growth or scaling back in the right areas at the right time. The wrong way is the exact opposite- it means simply hiring more representatives or managers because that is what other people have been doing. It happens whenever you scale with the hope, instead of the knowledge, that you are making the smart decision.
How can you know you are making the best decisions to scale your sales organization? Leverage data in the following ways to make sure you are scaling your sales in the right way. According to Peaksales, "Leaders need to test assumptions, basing sizing decisions on data rather than instincts."
1. More than 29 Opportunities per Rep
According to Openview this is around the maximum number of open opportunities that a sales rep usually can handle. Take a look at your open opportunities by representative metric and if the majority of your representatives are handling more than 29 open opportunities then it's time to bring on some more help.
2. Under 40% sales sourcing
Here, sales coverage means the # of qualified new leads that come from your sales department. According to Sales Benchmark Index, "Even if you are supported by a world class marketing team, the reality is that sales will still need to source at least 50% to 70%." Take a look at where your leads are coming from and if the sales team isn't coming up with anything then it's likely not the time to expand. For an easy way to fix this metric, see step #7.
3. Lead response time over 24 hours
According to Harvard Business Review "Firms that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead (which we defined as having a meaningful conversation with a key decision maker) as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer." Also, according to InsideSales, "Research shows that 35-50% of sales go to the vendor that responds first." Take a look at your average lead response time and if you aren't reaching out to prospects fast then it's time to hire.
4. Fewer than 25% Leads are Qualified
Scaling sales often means scaling marketing as well, and keeping the two in sync is important. For example, Gleanster research shows "Only 25% of leads are legitimate and should advance to sales, while 50% of that qualified number aren't yet ready to buy." If you discover that your leads are coming in fast but they aren't qualified then it's not time to expand. Only expand when your percentage of qualified leads grows over 25%.
5. Less than 75% Opportunities Nurtured
Nurturing, in this case, means that your opportunities are progressing through the pipeline in a timely manner with frequent touches. According to a Demandgen report, "Nurtured leads produce, on average, a 20% increase in sales opportunities versus non-nurtured leads." Further, the Annuitas Group shows that "Nurtured leads make 47% larger purchases than non-nurtured leads." Analyze the data around your sales cycles, looking specifically at how quickly your representatives are going through each stage of the process to make sure that no opportunities are sitting stale.
6. Less than 80% social media touches
Everyone knows that most sales happens over the phone, though cold-calling is on its way out. According to a report by the Brevet Group, 78% of salespeople using social media outsell their peers. If you find that most of your new leads are coming from social media sources and your representatives arent' connecting with their clients on social media then it's time to look at your process, not expand it.
7. More than 25% new leads come from referrals
According to Dale Carnegie, 91% of clients say they would give a referral, yet only 11% have been asked. If your sales teams aren't utilizing this often under-utilized resource then you are definitely not ready to scale your sales organization yet. However, when around a quarter of your new leads are coming from referrals then you know that your team is ready to take on some new challenges.
If you can analyze and examine each of these seven KPIs and sales benchmarks effectively, looking at them all as a whole rather than just one or two then you can rest easy knowing you've made the smarter sales scaling decision.
If you would like to dig deeper into your data, it starts with understanding what metrics matters most. Download our free guide "Sales KPIs that Drive Performance Outcomes" to find out.