A strong compensation plan starts with a strong foundation. Before you can begin developing your sales incentive plan, you need a solid sales model, starting with your sales team. Different companies, industries, and markets create the need for different sales models. Most often, it is a choice between recruiting individual sales all-stars or building a team that works like a well-oiled sales machine. To help you decide the best fit for your company, here is what you know about the two most popular sales models–sales stars and a sales machine.
Sales Stars vs. A Well-Oiled Machine
One of the most popular traditional sales models focuses on a group of salespeople with relative independence in their sales processes, methods, and customer relationships, also known as a “sales stars” model. In these models, company success relies on high-performing reps continued sales success. Another popular sales model, know as the “well-oiled machine,” works to create teams of specialized salespeople that work together as one cohesive sales unit. These sales teams use a well-developed sales process, which enables both new and experienced sales reps to generate strong, predictable sales results.
How Sales Reps Sell
Perhaps the biggest structural difference between the two sales models is how reps sell. In a Sales stars model, each sales rep is highly independent in every aspect of a sale. Because there is no implemented sales process, each sales rep is responsible for developing their own strategies and techniques for sales. In addition to sales, sales stars are customers’ one and only company contact, providing both customer service and education. Because of this, many customers will base their buying decision on their trust of the salesperson rather than the company behind them. Sales machine models, on the other hand, run on an established sales process, which often includes:
- rep recruitment and training
- career advancement tracks
- performance management
- sales management
- territory deployment
Each salesperson has a defined specialized role and works with a set of sales tools alongside other reps in a team-approach. The company owns all client relationships and provides support to the sales teams, ensuring that each team runs smoothly as an individual part of the entire sales machine.
Where Each Model Works
A sales stars model focuses on simplicity, making it an ideal choice for startups, small businesses, and independent reps (e.g., insurance reps, real estate agents, etc.). It is often adopted by early-stage companies that have small sales teams and do not yet have sales systems and processes in place. Because there are no established sales processes, this makes the model more simple for the company and management. Larger, more established companies (e.g., GE, IMB, large pharmaceutical companies, etc.) usually opt for a sales machine model. However, it also works for some smaller companies, such as those selling medical devices, specialty chemicals, and agricultural products. The sales machine model works for these sophisticated companies because they hire large numbers of sales reps, put them through formal training, and have teams operate using a consistent process.
Implementing and Operating Each Model
By far, the sales star model has a much easier setup than the sales machine. Without formal training and each sales rep being responsible for their own process, the business needs to hire reps and have them learn the products. This model will quickly weed out poor performers because it is highly dependent on sales rep success. However, this plan can become complex as the company grows, and eventually, it may lead to a need to transition to a sales machine model. Perhaps one of the biggest issues is organizing compensation, which can get tricky when individual reps work together on a sale. You should consider transitioning to a sales machine model if:
- your company growth slows or stops
- new or strategic products are not getting the sales attention they should
- giving sales credit to the right reps becomes difficult
- sales turnover becomes an issue
The sales machine model setup is often more costly upfront because of its comprehensive setup. You must first identify the specialized sales roles and team structure to encourage collaboration among individual teams. Most businesses focus on one specialization criteria, which can be any of the following:
- stages of the sales cycle
- customer size/segment
- territories, etc.
After being implemented, the sales machine model becomes more simplified. Sales teams have a reliable sales process that can be easily executed with consistent results.
Moving Forward–What Works in the Present and Future
Successful sales models are continuously adapting and changing as the company grows. If you are using a sales stars model now, know that you may need to transition to a machine model at some point in the future. It all depends on what works for your business now and looking forward to what will work for your business in the future. Ready to implement a strong sales model for your business? See how Xactly can simplify the process!