Structure of Successful Sales Companies

Goals

To discover the structure of the most successful SaaS sales companies, including how their commission structure works, and their most successful sales channels in order to build a successful sales team.

Early Findings

  • According to a Harvard Business Review study, 50 percent of high-performing sales teams have a thorough sales processes in place for their teams to follow.
  • The most successful sales teams ensure that their marketing and sales efforts are aligned.
  • Traits for successful salespeople in Saas include technical backgrounds, track records, placing value on long-term customer success, and understanding customer profiles.
  • Popular SaaS team models consist of the Island, Assembly Line, and Pods.
  • The Island structure is a good fit for startups making their first hires in sales. With this structure, all sales reps report to the manager who is responsible for the whole team. Each rep is responsible for handling the whole sales process on their own.
  • The Assembly Line is also popular with SaaS companies. It is best suited for a growing team that wants its employees to specialize in certain parts of the sales process. One team generates leads, one qualifies the leads, then the customer success team is responsible for maintaining and upselling.
  • Pods are similar to the Assembly Line, but instead of being one large team, your salespeople are broken into smaller teams with their own assembly lines. A pod usually consists of five to six people. This approach is good for fostering competition and motivation.
  • Saleshacker recommends Pods for maximum efficiency. Pods can be scalable as the business grows or as new markets are launched. With Pods, you can focus on resources, and this is very important with a new salesforce. It is also makes promoting easier, as you can promote someone from a pod to form a new pod (a top performer), then hire a new salesperson.
  • Inside Intercom shared 12 strategies from the experts for building a world-class sales team.
  • They include deciding on top-down versus bottom-up sales approaches, making a goal of each sales rep bringing in at least five times their total compensation, using a Pod model, using a sales acceleration formula, creating a sales culture that is about more than quota, finding passionate salespeople that can blend art and science, choosing the correct compensation model, aligning compensation to how the buyer buys, determining the base salary/variable split, a good onboarding process, and training for effectiveness.
  • In regard to the compensation model, in the early stages, it is best to leverage compensation for results. Commission or bonus focuses on compensation to provide the potential for growth and motivation. This approach is easier to scale because your up-front investments are lower.
  • The first step is to iron out the base salary and variable compensation.
  • Compensation should be aligned with how the buyer buys. Understand your natural buying process. Look at your data and come up with some hypotheses about your buyers.
  • “Companies like IBM and Cisco generate more than 80% of their revenues through resellers, but only 23% of SaaS revenues are through the channel.”
  • ADDITIONAL RESOURCES
  • Show Me the Money! A Guide to Creating a Scalable Sales Compensation Plan” discusses what the best compensation model should be for each level of salesperson from entry to VP.
  • OpenView Partners has an excellent article on the pros and cons of using channel sales for SaaS
  • Rocketship Growth recommends picking a sales channel that is in your field and that a channel should be picked based on cost efficiency and the ability to reach your customer demographic.

Proposed next steps:

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Our initial research resulted in a wealth of information and best practices related to building a successful SaaS sales company. In order to cover the question completely, we propose breaking the research into three parts. The first part would provide 5-7 best practices of the most successful sales teams with a focus on SaaS. Next, we would provide a deep dive into the 2-3 most common sales structures for SaaS sales-forces along with the pros and cons of each. Finally, we would provide five to seven best practice for sales channels for SaaS, including qualitative metrics if possible (for example sales went up xx%).
Additionally, we could provide 2-3 case studies that focus on the most successful sales-forces in SaaS.