Wednesday, August 12, 2009

The Perfect SaaS Inside Sales Team

Since I have been asked several times over the last 3 weeks on how to go about creating the perfect inside sales team for a software company, I thought I would take this opportunity to share with all of you my thoughts. On the highest of levels it's really quite simple.....

The "right" inside sales team depends on where your company/product is in its life-cycle, whether your product can be sold remote and the expectations of your targeted market. These 3 factors should determine the business objectives of the inside sales team. When your inside sales team is delivering on clearly defined objectives, you have set-up the "right" inside sales program. Notice I didn't say "perfect" because odds are you can always improve upon how you are doing things. "Perfect" is an absolute and I don't believe in absolutes.

Example #1 If your a software company that delivers an install product or even a SaaS product that has a sales cycle of 6-12 months and the product can not be sold remote, then you probably have a team of outside sales executives doing the selling. This means that the biggest bang for your buck is an inside sales team that generates highly qualified opportunities and assists in the nurturing process of all leads and opportunities. In this scenario I feel it's most beneficial to create an inside team that is a true extension to the sales executives. This gives your prospects two very credible contacts for any questions, concerns and assistance needed during the entire sales cycle. Their compensation plans should be directly aligned with the sales folks they are supporting. I like to break up the comp plan into 3 components: 60% on opportunities, 20% on a 60-day rolling pipeline and 20% on closed revenue.

Example #2 SaaS vendors that offer a product that can be sold remote, should have totally different business objectives. This team should be focused exclusively on closing revenue. For this type of team I like a 40% base and 60% commission structure. For every dollar of monthly recurring revenue sold, they should get $1 of commission. Since it's most likely a 12-month contract this equates to about 8.3% (1/12) of commission.

Stay tuned for one of my future articles on how to go about creating a solid comp plan for your inside sales team. I will include cost of sale and base salary calculations.

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