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Common Pitfalls of Scaling B2B Sales Organizations And How to Avoid Them


Image by Alexander Antropov from Pixabay
Image by Alexander Antropov from Pixabay

In our last post we discussed the issue of ownership allocation when scaling a sales team vertically through the Disruption Selling Maturity Levels. Today we look at common pitfalls when scaling a sales organization horizontally, so by adding headcount in already established roles.


Scaling the Sales Organization for Hyper-Growth

Growth can be achieved by entering new Target Market Segments (TMS) and/or by increasing market share within already addressed TMS. A TMS is a subset of the Total Addressable Market (TAM) defined by product, segment, industry, and geography, e.g., selling Customer Relationship Management (CRM) to Small and Medium Businesses (SMBs) within the Manufacturing industry in Germany.


Adding Headcount to Enter a New TMS

Any modification of the 4 criteria means we enter a new TMS, e.g., starting to sell our CRM solution to Global Accounts of the Manufacturing industry in Germany means entering a new TMS the same way as starting to sell our CRM solution to SMBs of the Manufacturing industry in France.


Entering a new TMS is an experiment: We don’t know yet whether we have Product Market Fit (PMF) in the new TMS and therefore must validate the TMS for our offering.


We have PMF if our offering

  • Addresses a specific market need,

  • Satisfies customer expectations resulting in repeat usage over time,

  • Has active referrals,

  • Enjoys declining Customer Acquisition Costs (CAC), and

  • Carries a sustainable competitive advantage.


The faster we can validate PMF in the new TMS the lower the costs of the experiment and the shorter is our time to sustained revenue growth.


For this experiment we need Technology Managers owning the technical relationship and Account Managers owning the commercial relationship with customers. Ideally we use experienced Technology Managers with a deep understanding of our offering and Account Managers with a deep understanding of the new TMS.


The Disruption Selling Single-Threaded Team
The Disruption Selling Single-Threaded Team

Adding Headcount to Expand In an Existing TMS

Growing our team in an already addressed TMS where we have PMF is not an experiment. We already have proven Value Propositions for the Economic Buyers of the TMS and all we need to do is to sufficiently educate new hires in these Value Propositions in the shortest possible time.


As a result we can add less experienced Technology and Account Managers to existing TMS as long as we can equip them with the required knowledge via training and coaching.


Pitfalls of Scaling the Sales Organization

Every organizational change comes with risk and growing the sales organization comes with change: sales territories must be redefined, goals and quotas must be reassigned, new hires must be integrated. As a result there exist pitfalls in scaling the sales organization.


Pitfall #1: Not Realizing That We Enter a New TMS

If we neglect the fact that we enter a new TMS we will assign new hires to TMS where we have not validated PMF yet. We might be lucky, the new hires generate first wins and we achieve PMF, but more often than not the new hires will lose sales cycles and we won’t know whether it is due to a lack of experience with our offering, misunderstanding of our Value Proposition, or missing PMF.


Pitfall #2: Mismatching Organizational Structure

If we organize sales by roles we likely run into situations where resources are misaligned, e.g., when Technology Management is organized by geography and Account Management is organized by segment or industry. As a result, we will increase the number of relationships between Technology and Account Managers as we scale the organization leading to growing communication overhead and friction.


Pitfall #3: Diverging Priorities

If we organize sales by roles we also run the risk of misaligned priorities, e.g., when Technology Management is organized by products while Account Management is organized by geography Technology Management might hire for balancing product skills while Account Management will hire for increasing presence in specific geographies. As a result, we might generate bottlenecks in Technology Management in some geographies and oversupply in others, or increase travel overhead.


How to Seamlessly Scale the Sales Organization

As always, we must start from the customer and work backwards to achieve the leanest, yet most effective growth path. In Disruption Selling we achieve this by a number of tenets we stick to:


Tenet #1: Customer Always Comes First

However we change our organization, it mustn’t come at the expense of customers. Ideally we want to lower the barrier for doing business with us to the minimum. As every change in our customer’s relationship with our team generates friction, we want to keep our relationships as stable as possible. So, to manage hyper-growth we cautiously add new hires to the engagement we have with a customer and we carefully plan taking contacts away from customers.


Replacing sales team members on short notice as part of the usual annual territory assignment is an absolute no-go! The total number of changes to customer-facing resources must be minimized and, where unavoidable, carefully planned and executed over an extended period.


Tenet #2: Sell New Products to Old Customers and Old Products to New Customers

There is a fundamental difference between selling well-understood, proven offerings where we exactly understand the Value Proposition, the Economic Buyer, and our competition, and selling a new offering where we have yet to prove PMF. So, in order to minimize the unknowns we have to manage in a sales cycle we sell new products to existing customers where we have established relationships, can leverage our installed base, and know our competition.


As a result, we enter new TMS with old products and we leverage the know-how of our most experienced Technology Managers for this to ensure we don’t lose sales cycles because of poor execution. At the same time we hire new Account Managers with experience in the respective TMS to leverage their know-how and relationships.


Tenet #3: The Single-Threaded, Multi-Disciplinary Sales Team

In order to avoid the negative ramifications of misaligned organizational structures and priorities described above, we group the various sales roles in Single-Threaded, Multi-Disciplinary Teams. So, for entering a new TMS we assign experienced Technology Manager and new Account Managers to the TMS with a common target, e.g., Proof of Concepts, pilots, new wins, active references while for growing business in existing TMS we split these teams as soon as the new resulting teams have critical mass and refill them with new hires.


Summing It Up

Generating hyper-growth requires scaling the salesforce. Scaling the salesforce is a change process. It must be carefully planned and consequently executed. It must minimize the impact on existing customer relationships and internal friction.


The best way to achieve this is by working backwards from the customer rather than by starting with the own organization. Organizing the salesforce by roles will result in misalignment and thus hamper growth. Organizing the salesforce around customers will maintain customer-centricity, agility, and momentum.

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