This is a transcript of a SalesGlobe Sage YouTube discussion (host SalesGlobe Sage and Michelle) about building and managing sales capacity models in M&A to realize growth synergies. They stress proving the growth plan with concrete inputs (who will sell what, revenue per person, time-to-revenue), managing to a sales-capacity/‘quota success’ model, and pulling levers such as staffing, role design, and shifting non-selling work to increase selling time. A healthcare merger case example and a Sales Time Optimizer tool are mentioned as practical inputs.
Chapters
All right. And then one of my favorites, Michelle, Sales capacity.
Yes.
Okay. So this is probably one of the most important things we do, the most foundational things we do in every M and A situation is we develop the sales capacity model because we have to be able to manage to that. So the, the challenge we hear is we don't know exactly how we're going to get the growth synergies.
Yeah.
Or what levers to pull or manage to. Okay, so let's look at what the solution might look like here. So you need to prove out the growth plan. What I mean by that is it's not generalities. It's not that we're going to have these synergies, we're going to cross all this stuff. It's. I want to see exactly how we're going to be able to get to this in terms of which resources are going to do it, what they're going to sell, how long it's going to take revenue per person, all those kind of things. And then you have to manage to that sales capacity model. So you got to prove it out, you've got to manage to it, and you've got to know the levers to pull to exceed your integrated goals. And what I mean by that is, do I need to do something different in terms of the staffing, what people are doing, the sales process or the sales cycle, how they're doing it? So there are different levers that we can pull there. Okay, so let's take a look at some of the details behind this, and I'll just give a broad view here initially. Okay, so the big idea, and this is what we call the quota success model. This is in the book Quotas, as you can see on the upper left here, if you want to go into detail on this. So you've got two big pieces here. You've got market opportunity. See right there, and the market opportunity. You've got your segments, you got your offers, you got your macro market environment. So there's a certain amount out there. Right. So say we're talking about the United States as an example. There's a certain amount there in the US There's a certain amount out there in the G, in the regions and the geographies and within those different sectors. And the point we want to look at here is with sales capacity, how, how do we get that? So sales capacity is going to be made up of elements like the roles, the staffing in those roles and the level of talent, the time that people are spending on selling. And we know, Michelle, from our, our research work that people spend about half their time selling. And so there's a lot of extra capacity in there because they're doing service and operational things. So right there, you know, hint there's an opportunity to get more capacity and workload. Workload is how much time does it take you to sell a new customer as an example, or manage a current customer. And you know, a hint there is to sell a new, new customer. It's not just, you know, it takes X hours to win the new customer, but how many hours does it take to work with all the prospects in the pipeline that fall out along the way? Right. So we have attrition rates. So this is kind of the big picture on the model. But we're going to take a look at some details here.
Yeah, so there's work to get to that sales capacity model and you'll see one right behind us here. But it involves doing things like the time study that you talked about. It involves doing things like understanding what people are doing today and what workloads are. But this particular one, and Mark's going to get into some of the detail, was probably one of the favorite, my favorite sales capacity models. It was we were working with a healthcare company that was setting up a new structure and we were building new roles. So we went through this role mapping process. We went through two companies that had merged, but we're also adding brand new roles into the mix. And it was really on the pipeline development side of it.
And this one looks a bit like wallpaper, doesn't it? Because there's so much up there.
It does, but that's okay.
But you're not supposed to read this, right?
No, no, no.
So we're going to show you a few snapshots here. But, but do not try this at home. It could be dangerous. So get expert help.
Okay, so, okay, so we're going to.
Zoom in on just a couple of pieces here. So one piece is the go, right. So you have to know what is it I'm going after in terms of, of the goal? And this is a particular slice of this organization. Just a piece that we're showing you. There's a certain growth rate on that goal. And what we're doing, as I said before, exceed your objective, exceed what you're looking for. So we're overshooting the goal in this particular situation here. So there's your goal. Okay. Addressable market opportunity, showing you a super high level here. But a lot goes behind this. So there's a size of the market now you'll notice here we start breaking things out. You'll see you've got up here new logo and then you've got client sales, current client, sales. So you've got new, new customer and current customer, basically. And then we're breaking that out into different tiers of customer. Okay. Sales capacity. Okay. So one of the first things we're going to look at here is the amount of time that we have to sell. You see a cute little thing here behind Michelle called sales time Optimizer. Slide over there. There you go. Okay, that's a little tool we use that runs on, runs on the phone here at Sales Globe. And that basically is a time SA tool that the sales team can use so you can know exactly how they're spending their time in terms of sales time, non sales time broken out by sales process step products, customer types, that type of thing. And it'll give you a lot of good inputs for sale for your working sales time. So how much sales time you have, right. Divided by the workload is going to tell you the capacity you have in very, very basic terms. So again you can see it's broken out by new customer, current customer and, and tiers. So, and then we're going to start breaking it out by jobs here in a second and then down to your workload. Okay, so workload, we talked about new customer and we talked about current customer and we look at things like pipeline flow, the number of accounts they're carrying through conversion rates. And then we look at hours per sale, and all the way down at the bottom, which you're not going to see here, but all the way down at the bottom you can see the total staffing required to be able to hit those goals. So in short, what it's going to tell you is it's going to tell you exactly what you need in order to get to your goal. And then the good thing is once you build this Michelle, then you can go in and you can start saying, okay, we actually need more people in this role and fewer people in that role. And these people we need to get their sales time up. And how do we do that? Oh, well, you know what, maybe they're doing too much time doing demos on something and maybe we can move that, those demos to a demo team to free up some sales time, right? Yep. And maybe we can decontaminate their job by shifting some of the service activities out so, you know, all the levers to pull and you can actually manage to the machine here instead of broad strokes, which becomes extremely powerful in terms of being able to get to your goals.
Yeah. That's why I really love the sales capacity models that we build. And this one in particular gave a great example of roles. And if you add or change the different roles, how that impacts the end result, what your quotas are, what the revenue impact will be. I mean, I just think it's a really great tool.
