Sam Jacobs, the prolific sales leader known for his successes at GLG, Axial, Livestream and most recently The Muse, joined us to discuss the KPIs he uses to ramp and build a sales team. While there are undoubtedly a plethora of metrics to dissect when assessing and building your team – Sam breaks it down to the basics for us.
We all know the formula. Your CEO says we are going to double our revenue next year. The wheels in your brain start turning.
What’s our average deal size? What’s our close rate? How many opportunities do we need? What’s our conversion rate from meeting to opportunity? How many meetings do I need? How many reps do I need?
This approach has driven sales leadership since Predictable Revenue but we cannot ignore the ecosystem around sales that has to be thriving for your team to succeed. The ecosystem is the market you’re selling into, your marketing efforts, management support, and all of the technology reps utilize on a day-to-day basis to make themselves more efficient.
Understand the Ecosystem
When thinking about scaling and ramping your team it’s important to account for the ecosystem. Sam acknowledges that the first and foremost thing to understand is product-market fit and to make sure your customer and market love what you do before hiring a sales team. If you are not confident in this, he warns, do not hire a sales team. Spend time with your customers, acknowledge their pain points, make sure your messaging reflects this, before sending reps into the field.
Invest in Marketing
It is much harder to build a pipeline for a team of existing reps than hiring a team to take care of a healthy flow of leads. Sam acknowledges that even he has made this mistake, leaving reps to scavenge for themselves and often coming up hungry.
Building a pipeline takes time. Investing in outbound prospecting can often take 6-9 months to show returns based on your sales cycle. Without a demand marketing engine to supply inbound leads, it can be a risky, and high-cost mistake for “growing” companies to invest in sales reps. Sam advises that most importantly, have a clear definition of a “good lead” to ensure your marketing and sales team are aligned from the start.
Focus on the Right Metrics
Once you feel confident that you have product-market fit, and a healthy flow of inbound leads supplied by your up and running marketing team, hire the right reps and focus on the right metrics.
Daily, Sam reviews:
- Pipeline generated
- New Opportunities created
- Opportunities that moved stages
- Closed revenue
Monthly he takes a deeper dive into:
- Length of sales cycle and win rates
What are the metrics that drive your sales team? Do you agree or disagree with Sam’s approach? Comment below and let us know what you think.
*This video is from Sam Jacob’s Building The Sales Machine event in NYC. Join us for our next event on October 10th, 2017 at ZocDoc HQ in NYC w/ special guest Craig Rosenberg. Grab a seat at BTSMRosenberg.splashthat.com.