There is an old joke in retail that goes, “We lose money but we make it up in volume!” Obviously in that scenario no matter how much you sell, you will always be losing money. To me this sounds like my many years in sales. Even though there was a team of sales reps not making their quota, whenever budget freed up there was only one thing to do – hire more sales reps!! It never made any sense to me and when I was in an executive role, I made sure not to fall into the same trap. So hopefully I will convert a few VP of Sales or Founders out there with these 5 reasons NOT to hire another account executive.

1.      Your existing reps are not hitting their quota – why would a brand-new rep make quota?

Do you want to hear an alarming statistic from Xactly Insights Data? On average 15% of sales representatives who were in their role for at least one year reach quota. That is startling. Even Salesforce, which should have a much easier time selling, stated they were only expecting around 40% of their reps to hit their number.

Now there have been many reasons given for such a poor performance: quotas are too high, there are no good leads, not enough prospecting, lack of coaching or training and the list goes on and on. One reason that is surprisingly absent from most of these lists is what I feel is the real reason most reps don’t achieve their goals: they don’t get enough support from their organization to be successful. Figure out how to support existing reps better with more training, materials, or a better relationship with marketing. You will save a lot of time and money leveraging your existing spend by making your current sales reps more productive.

2. Sales reps take 9 months at least to ramp up and start contributing to revenue

Think about bringing on a new sales rep. Once they get past orientation, configuring their laptop and benefits and actually learning what it is they are going to sell, a few months have already passed. Now they are making connections within your organization and starting to reach out to prospects. Marketing probably still doesn’t know about them, or they haven’t built any campaigns for them so the leads are nonexistent. In this scenario you are lucky if you see any significant revenue in the first year. Contrast that with an outsourced service like ours at CatchMoby where we provide all the support existing reps need to close large, strategic accounts and you’ll realize why the ROI for Focused ABM is off the charts compared to hiring more reps. Our ramp up time is 4-6 weeks and we don’t need to spend time choosing a health or 401(k) plan.

3.      Hiring a sales rep is a long-term solution that is costly and inflexible

Another insight gained from Xactly is that sales reps don’t really hit their peak performance until their 2nd or 3rd year. That is a real commitment. We all know that these are uncertain times with impending recession, financial markets in flux, the talent market out of whack after COVID, etc. Committing to a new hire locks you into a high, variable cost including benefits, commissions, infrastructure and more for several years.

Now considering how B2B technology companies need to shift on a dime by “rightsizing” their staff or focusing on new geographies, verticals or product offerings, they really need to be nimble. If you are targeting named accounts within a specific vertical, the best way to approach it is to outsource the marketing and sales development functions. These services ramp up very quickly and can ramp down even more quickly if you were to change directions. Or best of all, they can change with you. This provides you with a lower, more predictable fixed cost that can be refocused as your business changes. This saves a lot of money and the bad karma associated with having to fire a sales rep!

4.      You are not dedicating enough sales staff to support your existing sales team

Did you know Harvard Business Review found that the companies with the highest sales ROI (more than 2X) devoted 50-60% of sales employees to support. Imaging that – if you have 5 sales reps that would mean you would have 5-6 sales support resources. Now those organizations may exist, but much like a unicorn, I have never seen that in reality. I have seen SaaS companies that allocated 1 BDR for 5 sales reps!! You can imagine how many leads those sales reps got per month. This goes back to what I said earlier – lack of support is one of the greatest reasons that salespeople don’t achieve quota, but also why they are unhappy and leave their companies. Especially when it comes to named or strategic account reps, this lack of support can be devastating.

The solution? Give them all the support they need to attack their accounts. That is why we offer a combined strategy/ marketing/ sales development service with all the tools, team and techniques needed to build relationships with your largest customers so your sales team can focus on what they enjoy and what they do best – closing deals.  We do the research, we create compelling messaging, we engage with your prospects so by the time your sales team is talking with a prospect, they understand what you offer, what the value is and they want to have that conversation.

5.      Hiring a new sales rep becomes stressful for the other reps and a time suck for you

Earlier we talked about the commitment and cost of hiring a new sales rep and how long it takes for them to ramp up. However, we didn’t talk about the cost to the rest of the organization. More often than not, hiring another sales rep will create tension and stress within the existing team. Your reps may worry they are going to lost some of their territory or accounts, they are going to have to compete with yet another rep, they may have to spend time training this rep taking time away from their prospecting, etc. In addition to the built-up angst from your sales team, your sales leader now needs to devote time to training and mentoring a new hire. This includes countless emails and meetings on how the sales process works and even the required “shadowing” to make sure they are engaging with customers and pitching the product correctly.

This reason more than any shows why the ROI of our Focused ABM is so high and why ITSMA reports that 87% of marketers said it would outperform other sales or marketing investments. When you outsource marketing and sales development you actually provide encouragement to your team as they realize they are receiving more support to help them sell. It also relieves them of the burden of having to perform the chores they hate they most – lots of research, administrative work, marketing materials, engagement plans, etc. In addition, a sales leader’s time actually becomes more efficient. Since we provide all the support a sales rep needs, and we furnish them with detailed analytics showing sales performance, a sales leader can spend less time managing the sales rep while being more informed of their progress.

Conclusion – just outsource it already!

So, as you can see when it comes to getting the best sales ROI, keeping your existing sales team happy and productive, and freeing up time for your sales leaders, hiring CatchMoby to provide Focused Account Based Sales and Management is a no brainer. You will also see many other benefits such as larger average deal sizes, increases in annual contract values, and a shorter time to revenue. You can avoid the painful and expensive recruiting process, onboarding process, ramp up process, management process – and just focus on making your existing sales reps successful. When you do decide to hire another sales rep, just imagine how attractive your company becomes when you can tell them that you will be giving them more support to be successful than any other company they are looking at!!!