How to build a sales team from scratch

The order this gets built in

The commonest start looks like this: the owner posts a vacancy, hires two reps and waits for them to work out how to sell. Two months later one has left, the other sits on base salary, and the owner is the one answering customers. The order that works runs the other way round: system first, people second.

1. Count three numbers: how many enquiries arrive in a month, what share of them turn into payment, what your average deal size is.
2. Describe the customer's path from first enquiry to money, and name the stages.
3. Set up records where every enquiry from every channel is visible.
4. Write the rules: who takes an enquiry, within what time they reply, what they record.
5. Hire one person and bring them up to standard.
6. Set a plan by week and a daily rhythm: a short morning stand-up, one conversation reviewed.
7. Hire the second person once the first one delivers steadily.

Every step rests on the one before it. A plan with no numbers behind it stays a wish. Hiring with no rules in place hands your problem to a new person along with a salary.

Three numbers that keep hiring from being a lottery

Take the last three months. Count how many enquiries arrived across all channels together, how many of them ended with money in the bank, and what the average deal size was. Those three numbers multiply into your current revenue and show straight away which of them to move.

The arithmetic on an example. 200 enquiries a month, 7% conversion, a $500 deal — that is 14 payments and $7,000. Lift conversion to 10% and the same enquiry count gives 20 payments and $10,000. Hire two more reps onto the same flow and no extra enquiries appear. Only the payroll grows.

Describe the customer's path before you look for people

Take ten deals that ended in payment and write out what they went through. Those are your stages. Stage names have to describe an action by the customer: «left an enquiry», «got a quote», «agreed terms», «paid». Wordings like «in progress» and «thinking» hide a deal for months, because you cannot tell from them whose move it is.

• every stage is named after an action by the customer
• every stage has an exit: the exact thing that has to happen for the deal to move on
• every stage has a shelf life: how many days a deal may sit there
• it is visible who is answerable for the move to the next stage
• losses have their own separate ending, and the reason goes in there in the customer's own words

Describing this takes an hour. The check on what you produced: take three open deals and say which stage each is on and whose move it is. If the answer is unambiguous three times out of three, the stages are right.

The rules you write before the rep's first day

At the start the rules fit on one page and answer five questions.

1. Who takes an enquiry, and within how many minutes.
2. What to do when the customer goes quiet: how many touches, at what interval, in which channels.
3. What the rep records after every conversation: the agreement and the date of the next step.
4. When a deal is closed as lost, and what reason goes in.
5. Where the customer goes after payment and who looks after them next.

Make speed the first rule. James Oldroyd of the Sloan School of Management (MIT), together with InsideSales.com, went through three years of data in 2007: six companies, more than 15,000 enquiries and more than 100,000 dial attempts. Call a customer after five minutes instead of thirty and your chance of speaking to them is a hundred times higher, and your chance of carrying the conversation through to qualification is twenty-one times higher. Across the first hour the chance of a conversation drops by more than ten times.

The first rep, and what «up to standard» means

One person at the start is easier to handle than two. With one you have time to listen to every conversation, and every mistake shows up the same day. Two people working an undescribed process work differently, and a month later you will not be able to say whose version produced the result.

• a new rep gets access to hot enquiries after one test conversation, recorded
• the first days go on the old base, where a mistake costs less
• one of their recordings is reviewed with you every day, in writing
• standard counts as reached when their conversion holds at team level for two weeks running
• until then you ask them for actions, and their pay is calculated on payments received

When to hire the second person

There is one signal: more enquiries arrive than the first rep can handle at the agreed pace. Ten minutes of arithmetic checks it.

1. Count how many minutes a full cycle on one enquiry takes: first contact, quote, touches, closing.
2. Multiply by the number of enquiries in a month.
3. Divide by 160 working hours.
4. A result above one means the flow no longer fits inside one person.

The second signal shows in your records: enquiries with no next step that have sat for more than a day. While those turn up one at a time, it is a question of discipline. When they turn up daily, it is a question of hands.

What the owner keeps

• the plan and any revision to it
• decisions about people: who we hire, who we let go
• prices and the limits on discounts
• a weekly report from the team, in the same shape every week
• one conversation reviewed a week, so you hear the customer with your own ears

Everything else goes across in full. The commonest mistake at this step is keeping approval of every discount. A month later you are back inside every deal, and the reps have got used to deciding nothing on their own.

What you should have at the end

• three numbers counted over the last three months and written down
• stages named after customer actions, each with a shelf life
• every enquiry from every channel landing in one set of records
• one page of rules, and the rep has read it
• the first rep up to standard, proven by two weeks of conversion
• the plan broken down by week, the daily rhythm running without you in the room