As a SAAS Sales Leader, Are You Avoiding These Fatal Flaws?
Success in sales leadership is the perfect balance of execution, people, and frankly, luck. But even when things are great, there are things you should avoid.
When I started in sales, I was a team of one. Which meant I chased the numbers well before figuring out strategy and process. This works for a while, until you hit traction.
Then it’s time to add more reps and that’s when things start coming at you fast. While most sales leaders started off the same way I did (selling first, and building a team later), there isn’t a manual to tell you how to be most effective. You either get it right or not.
In my experience going through this process, there are two fatal flaws I'd suggest avoiding. More importantly, these mistakes may turn off potential investors or new owners even if you’re doing a pretty good job. Why? Because they signify you aren’t being strategic enough (which could be costly to everyone in the long run).
The two fatal flaws to avoid as a sales leader
1. You don’t know your numbers well
Sounds basic but there is more to it than knowing your revenue goal. At minimum, you need to know several important numbers. Some sales leaders (think: top sales person-turned sales leader) believe getting to goal is the only thing that matters. Yes, it's important but when it comes to scaling you need to know more. Others believe being in the field, networking, and knowing where every opportunity is at is good enough...but it's not.
Here’s what numbers you should know at a minimum:
Total addressable market (How many people are there to sell to? If there are different verticals or size of organizations, SMB, enterprise, or international be sure to know those as well).
Number of accounts in your database by vertical or size of account.
Average deal size by vertical or size of account.
Average close ratio by team(s) and rep tenure (<1yr, 2-3yr, 3-5yr, 5+).
Average sales cycle by team(s), by vertical, or size of account.
Activity metrics by team (calls, connections, # of remote, and in-person meetings). This data is all about opportunity creation.
Pipeline forecast and management (need to be able to speak to what the pipeline data says and leverage that data to make key decisions. Plus be able to commit to forecast revenue projections since revenue predictability is everything). FYI, good pipeline management processes can also help support your win/loss analysis reporting!
Rep hiring and rep attrition metrics (understanding why you lose reps is key to addressing any problems).
Customer acquisition cost (CAC). Here’s an quick article that explains how to calculate it (this is becoming more mainstream today so I’d recommend getting a handle on it).
Not knowing these numbers can be detrimental to your business. Plus, the more you look at these things the easier it is to pivot when needed.
2. Not looking at the big picture (on a regular basis)
This may sound like a no brainer, but some sales leaders set their goals once and go. They don’t slow down to look at big picture throughout the year in search of changes in the market, competitor landscape, product feedback, and team health. Without reviewing these things regularly, you may find yourself in a rut that was avoidable.
Here’s what you should do instead:
Every month/quarter review the past month/quarter numbers and look for any trends or things that jump out.
Every quarter review the industry. Being in the field is one thing, but getting information from a variety of sources is even better. Research thought leaders, publications, and key studies to see what’s happening.
Set up an internal team made up of various sales roles and market research folks and have them meet quarterly to discuss market trends, products, and team health. Have them present to you (and your executive team) a summary of key findings. They’ll enjoy the opportunity and you’ll get great intel. (Extra bonus: give them a cool name like Delta Squad, Strike Force, or Hawk6).
No one said sales leadership was easy, but it can be easier if you focus on the above list. With business moving at the speed of light and competition growing every month, there’s no time to wait.
If you can easily answer all of the above questions, kudos to you. But if you can’t, don’t get caught not knowing and looking like a great sales rep with a sales leader’s title.