Organization structure in company exist to make and maintain efficient workflow. It should be set up in a way that makes the most of processes in company. This include making decisions, cutting costs and increasing productivity.
All parts of the organization structure are important and they contribute to the company's strategic goals, in different ways.
Nevertheless, the results of the sales is what matters the most because these results determine how good your revenue will be That’s why you should align all departments with marketing and sales.
The questions is how to organize your sales team? Before analyzing different sales team structures, I’d like to define roles that I’m going to use in this text.
At the beginning one person can perform different roles.In fact, at early stage it has to be that way due to the tight budget and smaller team. But eventually, it will look something like this.
Now let’s see the roles in sales team, and their main responsibilities.
Hiring Manager. Responsible for finding, hiring and including new team members. In smaller companies sales manager is does this.
Sales Trainer. Trains sales reps about the sales process and team culture. In smaller teams sales manager does this too.
Administrator. The office work of course. With company growth, need for more administrators increase.
Lead Generator. Dedicated to collecting the leads.
Sales Development Representatives - SDRs, also called Qualifiers or Prospectors. They qualify inbound leads, and that’s why they can also be in marketing team instead of a sales team.
Sales Representatives - SRs. The main players in sales teams. In smaller companies these tasks are done by Sales Representatives who collect their own leads. Managing sales team is a lot about making your SRs productive and motivated.
Account Executives - AEs. They get the qualified leads and turns them to customers. Closing the deals is AEs main responsibility.
Account Manager. The post-sale service is his primary task. Sometimes, SRs are delivering this kind of service.
Customer Success Manager. The integration of functions and activities of Marketing, Sales and other departments in order cover all touch points with customers is Customer Success Manager responsibility.
Customer Service. Dedicated to dealing with customers increasing needs.
According to Close.io the are three models of effective sales team structure. Let’s take a closer look.
This is a typical old school model of organizational structure where every sales rep is fully responsible for all steps in sales process from generating leads to closing deals.
In this kind of environment it’s practically impossible to keep tracking the sales metrics in a modern way so it really isn’t what startups are looking for. But still, it has it’s pros like simplicity and salesmen independence.
In the assembly line model there are four different groups:
Like the name says, first group is generating leads for SDRs whose job is to reach out and qualify the leads. Closing the deal is responsibility of AEs.
Finally, customer success team is increasing customer's lifetime value (CLV) by keeping them happy, and of course up selling them.
I’m not far from the truth when I say that podular organization is a mix of the previous two models, formed in order to extract pros from each model.
The structure is pretty much the same as assembly line, but inside one organization there are more two, three or more teams - pods. Here is the diagram.
Every pod is organized as a small independent sales team, so instead of individual competing, there is competing among pods. The pod is like modified version of assembly line and it seems to be the most flexible.
However, the first two models are working perfectly for some companies, so you should chose to organize your team based on your environment.
In decentralized sales teams SDRs are doing everything from prospecting and planning to closing and analyzing their performances. That’s why they have a freedom to express their creativity and reach their full potential.
On the other hand in centralized team structure SRDs are not doing any outbound work. One team, sometimes one person, is doing all the activities from one point. In this type of organization the focus is more on analyzing data and optimizing the performance.
Majority of tasks like collecting and analyzing the leads, reaching out, sending personalized emails and more, can be done much more efficiently than they used to.
This may seem that decentralized teams are sort of traditional model and companies should move on, but that’s really not the case.
Software solutions are making individual SDRs work smarter because it’s more precise more deep and it takes a lot less time to do it.
Now let’s take a look how startups organization works in reality. Take a look at the structure that many startups follow.
The three teams are Marketing, SDR/ADR (Sales Development Rep/Account Development Rep) and AE (Account Executive).
Marketing team is generating leads using content marketing techniques and lifecycle marketing. SDR/ADR team is evaluating the leads and at the same time making cold calls and doing lead generation and qualify the leads.
Using cold calls one SDR should generate 300 - 400 leads and qualify 70 to 100 leads inbound. Finally, AEs are taking qualified leads to close the deals. Close rate should be over 60% and lean to 80%.
This marketing and sales team structure and the numbers I mentioned, is what have driven Salesforce to $100M according to Aaron Ross’s Predictable Revenue. So, marketing section is responsible for generating the leads.
There are many efficient ways, and if you like to find out more about it I suggest reading our post How To Generate Leads. Here we’re more interested in sales workflow. This how they do it in Hubspot.
As the company grows bigger the sales team structure will change. Eventually it could look something like this. The Knowonlineadvertising came up with the generalized sales team structure along with the experience on different levels. Here it is.
Organization structure in big companies is changing. Traditionally, team structure was more the thing at the operational level rather than at the strategy level.
That approach is over, at least in modern high performing companies. They’re restructuring their organization in order to improve efficiency, create synergy, cut costs and more. Indeed, it’s just like Don Shapiro said, strategy follows structure, structure supports strategy.
As you’ve already seen, relevant studies showed that members in high performing companies share the same perspective about their organization structure, which is also one of the things that separates best from the rest.
The purpose of team organization in each and every company is to be effective and to drive business success. In that matter, Steve W. Martin did a survey where 786 professionals were asked about their sales organization.
Here are some of the results and conclusions. High-performing sales organizations rated the quality of their sales organization higher than average and underperforming organizations. More that 70% of high performing team members rated their sales organization above the average.
High-performing sales organizations employ a more structured sales process. In high performing sales organizations, 50% of study participants said that the sales processes were closely monitored, strictly enforced or automated.
The study pointed to 15 significant differences between how high-performing, average, and underperforming sales organizations, but these two conclusions were enough to highlight the importance of sales team structure.
This concept has evolved in the last five years, and now is essential part of successful companies sales strategies.
At early stage, customer success was B2B centric, but eventually all types of companies have embraced it.
Customer success should involve all parts of your company organization, including sales and marketing departments. That’s confirmed in Lincoln Murphy’s definition: Customer Success is when your customers achieve their Desired Outcome through their interactions with your company.
However, sales goals are not naturally aligned with customer success, because the folks in sales are focused on getting as many customers as possible. “If you are encouraged to hit your number by any means possible, you may have reps throwing bad deals over the fence, which can cause friction between sales and customer success” Steve McKenzie, VP of Sales at InsightSquared Thats sales and customer success goals have to align.
That’s why it starts from the top, and involve all parts of company. The best way to do it right is to make customers success journey map that defines roles for every part of your company.
Here is how it looks. Through the customer's journey, every touch point matters.
Relationship with your customers will be defined in the first couple of months so it’s very important to make them know they have your support at all levels.
Different models of sales team structure presented here are based on the best practices in high performing companies.
Still, they can serve just as theoretical approach that can give you idea how to organize your sales team.
In reality, most companies adapt to their own inside and outside situation which result in hybrid organization structures and sales teams. Only that way you can optimize the processes in your company.
Another thing that you could notice here is the fact that organization structure is evolving over the time. What worked before doesn’t mean it works know. The best example is customer success concept that made the highest performing companies to do restructuring at all levels.
Sales team structure shouldn’t be lone island in the company, but making efficient sales team is the top priority. That you need to align other departments to the sales team.
Finally, I want to say that there is no the best sales team structure for every company, there is only the best match for you and your strategic goals.