In this article, we provide insights on how to build a product sales organization structure that yields results. In the SaaS world, it is not enough for us to look at salespeople as individual contributors but rather as an entire team across departments such as marketing and product development. We talk about optimal sales organixation structures of teams in your company.

Salespeople need to know what they are supposed to do in order for the company and salesperson goals be reached. First, it is important that sales team structure roles are clear; second, it ensures successful achievement of both parties’ expectations.

There are many benefits to an efficient sales department structure, such as:

  • Reduced employee conflict
  • It’s important to have an open dialogue with your employees so that they feel comfortable telling you about their concerns and what they need from the company.
  • Maximizes employee performance
  • Improved decision making

What is a Sales Organization Structure?

A sales department structure refers to the design of a company’s entire team. It includes objectives and responsibilities for each person in a mode organization.

When you’re setting up a sales team, it’s important to consider factors such as:

  • Regions served
  • Size of your sales team
  • The amount of products and services that a company offers is another factor in sales motivation.
  • Size of customers

Need Help Automating Your Sales Prospecting Process?

LeadFuze gives you all the data you need to find ideal leads, including full contact information.

Go through a variety of filters to zero in on the leads you want to reach. This is crazy specific, but you could find all the people that match the following: 

  • A company in the Financial Services or Banking industry
  • Who have more than 10 employees
  • That spend money on Adwords
  • Who use Hubspot
  • Who currently have job openings for marketing help
  • With the role of HR Manager
  • That has only been in this role for less than 1 year
Just to give you an idea. 😀

7 Kinds of Sales Organization Structures

1. The Assembly Line

In the assembly line model, leads are handed off between specialized teams to make sure that they move through all of the stages in a sales cycle. The goal is for prospects to be passed from one team member who specializes in their needs and can help them solve those problems.

PROS

  • Promotes specialization.Sales Representatives become experts within their respective fields.
  • Promotes specialization.
  • Sales representatives will know a lot about their industry by the time they’re done with training.

CONS

  • Risk of poor customer experience due to many handoffs.Additional costs from specialization.
  • It’s hard to provide a great customer experience when there are so many people involved in the process.
  • Specialization requires additional costs, which can be burdensome for small businesses.

2. The Island

One on one contact with a customer is the key to success in this Island model. This type of sales organization structure can be used by smaller teams that want more output, and it’s also great for departments which benefit from personalized interactions.

PROS

  • Creates a competitive culture.Maximizes individual output.
  • Creates a competitive culture.
  • Maximizes individual output.

CONS

  • Managing numerous accounts may be stressful.Places priority on individual success over team effort.
  • It can be difficult to manage numerous accounts at once.
  • Instead of focusing on team success, they prioritize individual achievement.

3. The Pod

The Pod is a combination of the Island and Assembly models. The pod consists of specialized representatives who handle prospects through various stagesstages in their sales cycle by providing prospect-specific information, assisting with inquiries about services or products, recommending solutions to problems that arise during discussions, etc.

PROS

  • Enables smooth handing off of leads.Allows adjustments to sales teams according to skill.
  • Leads are smoothly passed off to the next agent.
  • Allows you to make adjustments according to skill.

CONS

  • Often shields poor performers behind successful teammates.Makes individual motivation more challenging.
  • Managers will often protect their lower-performing employees by blaming them on higher performers.
  • This creates a more difficult environment for individual motivation.

The Assembly, Island and Pod organizational models are not the only ones. There is also a four-way division which can be grouped by:

  • Geography/ territory
  • Product/service line
  • Customer/account size
  • Industry/vertical segment

4. Geography & Territory Structure

This commercial team structure gives the salespeople a chance to get familiar with their area and know where they are going. The members of this group can even go into local businesses or do research on competitors.

By focusing on performance and potential, evaluations for sales representatives become easier.

5. Product & Service Line Structure

Companies that sell a wide variety of products and services have sales teams organized by the type of product or service they offer.

I have found that salespeople often get more excited about the company they work for when there are other people who share their values and interests.

When I realized that my salespeople were not only motivated by the promise of a paycheck, but also want to know their product and sell it well. This is when they became specialists in what they sold which led them to increase revenue for me.

6. Customer & Account Structure

Sales teams are now more likely to be based on account-based marketing (ABM) than before.

Companies with strong account-based marketing teams can really take advantage of the fact that they are able to structure their sales team by customer or account. This means that each individual is better equipped for dealing with a specific client, which will lead to meeting those needs.

7. Industry & Vertical Structure

Another way to structure a sales team is by industry. For example, if you are in the medical field then it might be best for your company’s health care division to have its own staff.

When I recruited salespeople from a specific industry, they were more knowledgeable about the nuances of that field and had higher close rates.

If your company sells across different industries, we recommend dividing the sales team by industry to be more efficient.

Series: Winning By Design Blueprint

The Winning By Design Blueprint Series offers helpful insights for how to run a successful SaaS modern sales organization.

In the past, B2B salespeople were treated as individuals and not a part of an organization.

Reps were hired, trained and compensated to perform as an individual to hit a quota. This comes from a time when enterprise sales people left the office on a Monday to return to base on Friday with signed purchase orders, submit expenses, update the funnel, etc.

We all know that the world has changed a lot since these days, but most sales organizations still rely on outdated sales division structures.

Difference of Traditional and Modern Sales Team Structure

When I was first starting out in sales, the industry standard for measuring success was by using an individual contributor’s revenue. This resulted in a waterfall-like model that would ramp up over time as they sold more and earned higher commissions.

To hit the $8M sales goal, a VP of Sales would hand out an additional 20% to five regions. Each region was assigned one IC who then had responsibility for that area.

I added more salespeople, simply because the quota had increased. But I didn’t really do my research on what was needed to get that level of success.

Today’s sales challenges are caused by the outdated model of low volume deals at a higher price.

Companies are having a hard time in the sales field because their deals have become less valuable. This means that it may take over two years to make up for your lost profit.

For this model to work, the company needs a higher volume of deals in order for it to have an effect on growth. What complicates things is that these are quick transactions so there’s no room for error.

CASE IN POINT:

Acquisition needs: To grow revenue, sales development reps need to find business for account executives. They help them in the process of getting clients and ensure they are successful enough so that they can use their service.

A company needs to constantly update their customers and provide them with the right service in order for salespeople to keep earning commissions. A customer-service representative (CSR) or account manager (AM) should be used by a company when communicating with clients, as they can handle both communication and finding new opportunities within an account.

  • Market Development Reps are the salespeople who follow up on inbound leads and set meetings with our Account Executives.
  • The Sales Development Rep is responsible for making initial contact with potential clients through email and phone calls.
  • The AE will meet with the sales manager to go over goals and how they can be met. They then create SQLs which are forwarded on for approval by other members of management.
  • ONB: Onboarder The ONB is a group of people who manage the onboarding process for clients and their first use experience.
  • CSM: Customer Success Manager Manages customer retention and satisfaction.
  • Account Managers work to increase the company’s profit by developing opportunities for customers to purchase additional products.

The Sales POD: A Special Type of Sales Team Structure

By grouping specialized team members, a self-contained unit is created. This group can be located in the same market or region for an extended period of time or they may rotate through different marketsregions on sprints to address specific events such as trade shows.

How aPODworks:

The first person in the 22 POD is a Marketing DirectorSales Development Representative who works with two Account Executives.1) When I first began hiring salespeople, I just assumed pay along with commissions and bonuses would be enough to motivate them for success. However, it turns out that people are not only motivated by money–in fact they may be even more incentivized if you provide them opportunities to grow their skillset as well as explore other fields outside of their role at your company. 2) The key point here is recognizing what motivates each individual within the context of an organization’s unique culture so that everyone can have access to resources necessary for personal growth while also being challenged on both emotional and intellectual levels which will result in better work quality overall from all employees involved

My AE’s are averaging about 40-60 meetings per month because of the MDRSDR combo.

From these meetings, the AEs close 6-8 deals per month with an average contract value of $18,000.

POD Modeling

Historically, PODs were not considered an issue because the focus was on winning logos.

In 2014, the numbers of SQLs and SDR’s dropped from a high 20-30 to low 10s.

For the POD to be successful, it should not take more than 40% of annual revenue for a year.

Scaling Up Your Revenue

The sales team is now structured with a number of pods, and we can scale the revenue by scaling PODs. In this example you will see how initially our teams were unstructured.

The sales team has a group of SQLs who create reports and give them to the AEs.

The company needs to rethink its resources so that it can focus on two different markets, small and medium-sized businesses (SMB) or large companies.

As the business grows, I have to expand my sales team and launch new product offerings in order to meet customer demand.

Here are a few tips for making sure your B2B sales team is successful:

  • It takes three months to reach 100% production for a POD.
  • There is a sweet spot for quota that should be hit. Setting quotas too high will not help motivate the team because they are never going to meet it.
  • Once a POD is up and running, do not add any more employees to it. This will disrupt the balance of work load.

Use of PODs To Acknowledge Markets

One of the key advantages to print on demand is that you can focus your resources. This becomes more important as revenue grows.

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The example below shows the segmentation of Government vs. Commercial in addition to each POD’s specialization and their ability to train on only the use-cases that are needed for a given sprint length, which can be anywhere from 30 days up 90 days.

In a sprint, there are three phases: planning phase, execution phase and reviewreflection. In the first stage of a sprint – the Planning Phase- an idea is being discussed with members of the team to determine if it’s worth pursuing or not.

  • I used training and role-playing to teach my team how to use the software.
  • In the second week, I should focus on reaching out to prospects that are not as desirable because they have a lower level of interest.
  • In week 3, we will be marketing and organizing an event. We should also try to follow up with our A-leads.
  • Week 4: Pursue A-leads.
  • In the last sprint, we focused on our skills and strengths. In this final week of development, I want to reiterate those things before moving onto other tasks.

Utilizing of PODs with Different Business Models

PODs can be applied to different business models. The most common application is when a team closes a deal for CRMERP systems, etc.

Once the deal is closed, there are not a lot of opportunities to upsell. For example, if I sold an eight-user business unit X workflow platform at first and later on found out that they needed ten users for this project.

After one year, there are 10 users in business unit X and maybe two seats open for new applicants.

The POD is a powerful tool in post-close sales. It can be deployed after the close and as seen above, it has been used to increase signups for free services.

The three person sales team is often used for high-end luxury customers. CSMs identify the leads and then hand them off to an ADR who follows up with a call, email or visit in order to qualify the lead’s interest. The AM will offer higher priced products if they show enough potential.

Scale the Recruiting

In addition to being able to scale, PODs also allow you a way of promoting your top performers. An existing AE can be promoted and take over the leadership position in another team. The original leader will backfill that position with their own MDR.

The Critical Role of the Right Sales Department Structure

With changes in the sales industry, it is important to realize that there are new ways of structuring a department. The article above talks about some reasons why this has changed.

With this advice, you can set up a sales organization that is tailored to your needs and the stage of your company.

Have you considered changing your sales team structure? If so, it might be time to make a change.


Need Help Automating Your Sales Prospecting Process?

LeadFuze gives you all the data you need to find ideal leads, including full contact information.

Go through a variety of filters to zero in on the leads you want to reach. This is crazy specific, but you could find all the people that match the following: 

  • A company in the Financial Services or Banking industry
  • Who have more than 10 employees
  • That spend money on Adwords
  • Who use Hubspot
  • Who currently have job openings for marketing help
  • With the role of HR Manager
  • That has only been in this role for less than 1 year
Just to give you an idea. 😀
Editors Note:

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Justin McGill
About Author: Justin McGill
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