Venture Capitalist at Theory

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2 minute read / May 30, 2019 /

As Your Sales Team Scales, Focus on Your Middle

Imagine a hypothetical startup with 10 account executives that is growing quickly. This startup has two AEs that outperform meaningfully, six that are at typical quota attainment, and two that are underperforming. Where should your sales enablement team focus their time?

This is the team’s performance last year. They generated 8.6M in bookings on 10M in quota capacity (which is really good). Most teams aim for 70-75% attainment.

If the sales enablement teams had focus on the top quartile AEs and improve their performance by 20%, the company would have booked $9.3M. The distribution looks like this.

The two top reps jump from $3.5m to $4.2m in bookings. Nice result. How does it compare to an alternative of improving the middle two quartiles’ performance by 20%?

In this case, bookings grows to $9.5M, a 10% improvement over the baseline and a more modest 2% improvement over the result from focusing on top quartile performance.

If the outcomes are similar, which is better? The second is better for two reasons.

First, the sales enablement team has shown they can improve performance over a broader group of people. Each salesperson has a different style and technique. Demonstrating success across more people reaffirms the enablement can work across a larger population of account executives, not just the top performers.

Second, as the company scales, the middle quartiles by definition will be twice as large as the top quartile. Creating consistency within that group will eliminate big swings in bookings performance. If our top performer misses because of personal reasons, health issues, whatever, and books 0.5M instead of 2M, that’s a material impact to the business. There’s bookings concentration risk.

By enabling more AEs to contribute consistently, the startup mitigates some of that concentration risk. This is analogous to building a repeatable inside sales team to complement the higher variance field sales teams. The Monte Carlo simulation we ran shows the impact on bookings can be meaningful and unpredictable. Same idea here.

Predictable growth is the most attractive characteristic of a business. Focusing enablement efforts on creating consistency in the middle of the sales team is an important step to establishing a reliable cadence of success.

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