Takeaway:
Early in my career, I saw the pitfalls of unchecked growth. We were told to expand everywhere, but I questioned why we weren’t focusing on quality — maximizing revenue in high-potential territories instead of spreading thin in less populated areas.
The pressure was on to grow at all costs, so we hired about 500 reps. This unsustainable approach led to high customer acquisition costs, expansion into low-revenue cities, and ultimately, unprofitability. The problem was clear: leadership relied on a quota capacity model that didn’t account for the reality of ramp times and quality hires.
Hiring less but incentivizing top performers would have driven better results than over-hiring and sacrificing quality. Models should guide strategy, but RevOps, Sales, and Finance need to collaborate, ensuring they reflect reality. Quality always beats quantity, and assuming every hire will become an A-player in 90 days is unrealistic. A “butts in seats” mentality won’t drive sustainable growth.Sales is fundamentally about psychology, balancing the right amount of pressure and motivation. It’s crucial for sales reps to feel challenged but not overwhelmed, as this balance can drive better performance and job satisfaction. By focusing on manageable territories and clear objectives, sales teams can better focus on prospects and customers, achieve their targets, and contribute to the company’s growth.
Over and under hiring in sales teams can have significant impacts on a company’s performance, team morale and a rep’s mindset. Under-hiring can lead to unmet customer demand, overworked staff, and missed expansion opportunities, as well as failing to secure new logos. Teams may struggle to manage workloads, leading to burnout, resentment, and reduced effectiveness. This scenario often forces companies to rely heavily on existing staff, who may feel overwhelmed and unable to take necessary breaks or focus on strategic growth areas.
On the other hand, over-hiring can cause inefficiencies and waste resources, as too many reps may end up with underperforming territories. This results in reps missing their targets, top performers leaving, and the company scrambling to react, ultimately demoralizing the entire team.
Determining the optimal size of a sales team involves juggling the need for sufficient coverage with the risk of overstaffing. Key factors include understanding the total addressable market, setting realistic quotas, and aligning hiring with strategic business goals. Sales leaders need to avoid the trap of equating more headcount with increased revenue potential without considering market demand and the company’s capacity to support additional staff. Hiring one account executive (AE) often necessitates hiring additional support roles like business development reps (BDRs), technical sales consultants, and customer success experts to fully leverage the new hire’s potential and limit ramp time.
Sales leaders must constantly evaluate the efficiency of their teams, considering factors such as workload distribution, territory alignment, and market conditions. Effective communication and a clear understanding of company goals are essential to ensure that teams are neither overburdened nor underutilized. Ultimately, a balanced approach to hiring helps in achieving long-term sustainable growth while maintaining employee happiness. But that’s not easy.
Here are key considerations for navigating these challenges:
Anchor on a North Star
A clear North Star, or overarching company goal, serves as a guiding principle for the entire team, aligning individual and team efforts with broader objectives. This clarity is motivating, as it shows how each person’s work contributes to company success.
In startups, tracking progress toward revenue goals and sharing weekly updates creates a “one team, one dream” mentality, where everyone works toward the same North Star.
Data is in the driver’s seat
Data is essential for informed decisions on account assignments and performance evaluations. It’s not just about meeting targets but also assessing the quality and sustainability of those results. Establish clear, regularly reviewed metrics like lead volume and quality, conversion rates, and total revenue generated. Track account movements—whether won, lost, or shifted to competitors—areas often overlooked in RevOps discussions. The available market share may be smaller than it initially appears.
Use modern software to maintain up-to-date sales activity data, ensuring performance reviews are based on accurate and comprehensive information. Both the rep and manager should have access to this data, making discussions more objective and eliminating surprises.
Math is the clearest path to quotas and goals. A structured approach to setting and achieving quotas involves using current data to inform decisions and setting realistic, attainable targets. Sales leaders need software that can quickly and easily leverage historical performance data to set realistic quotas. This data-driven approach helps in understanding what is achievable and sets a clear path for the team. Periodically review goals to ensure they remain relevant and challenging. Adjust quotas and strategies as needed based on market conditions and company objectives.
Data-driven discussions strengthen transparency and objectivity, and help to build trust and loyalty not only in the management team, but in the decisions that impact a rep’s career.
Focus on the right accounts
Effective sales strategies often revolve around focusing on a manageable number of high-potential accounts. Overloading sales reps with too many accounts can lead to superficial or nonexistent engagement, while under-hiring leaves opportunities untapped, causing stress and potential burnout.
Regularly review the number of accounts each sales reps handles. The goal should be to ensure that they have enough accounts to reach their targets without feeling overwhelmed. In today’s world, sales leaders must use software that gives them access to data as the foundation of all their decisions. Use modern technology to review each rep’s performance, account performance, and daily activity.
Which accounts can be removed and which can be added? This doesn’t need to be a difficult conversation. Sales leaders can use technology to show reps which accounts are dead weight, making reassignments easier to justify. For reps, this means more focus on healthy accounts, expansion, and new logos. Showing the math behind these decisions and the path to quota creates room for personal and company growth. Clear alignment between account assignments, quotas, and the company’s goals ensures employees understand their impact, meeting the demand for transparency and guidance.
For younger companies still defining their ideal customer profile, start by understanding what is addressable and then cut territories accordingly. Do the backward math: if a company aims to reach $5 million in revenue and each rep should cover $1 million, create territories accordingly. Evaluate whether each territory can realistically meet that quota. If only three out of five territories can reach $1 million, adjust the remaining ones. This might involve reassigning or combining territories, such as adding different regions, to balance the workload and potential revenue. Be creative and flexible in your approach.
Define the promotion track early and encourage career progression
What defines a promotion? Understanding what motivates team members and offering clear career advancement opportunities can significantly impact their performance and retention. Sales leaders must also define what qualifies as a promotion and why. Discuss career aspirations with team members and align their personal goals with the company’s growth objectives.
For example, transitioning from SMB to Enterprise AE roles can be a motivational milestone for many sales professionals. But leaders need to define what progression looks like within the sales team. This includes outlining the skills and achievements needed to move from roles such as BDR to AE. It also eliminates confusion and limits internal politics when roles and next steps are clear.
Communication builds trust
Transparent communication is key, especially when making decisions that impact the team, such as changing account allocations or quotas. This transparency builds trust and aligns the team’s efforts with the company’s strategic goals. Regularly update the team on any changes in strategy, goals, or market conditions. This helps in keeping everyone aligned and informed. It also builds respect and trust in leadership. There should not be any surprises within the team. And where possible, involve team members in decision-making processes. This inclusivity can lead to better buy-in and more innovative solutions.
Pressure is a privilege
Applying a balanced level of pressure can motivate sales teams to achieve their targets. Viewing pressure as a privilege underscores the opportunity it brings to excel and achieve targets. However, it’s essential to balance this pressure with support mechanisms to prevent burnout and maintain a healthy work-life balance. No one should be eating a steady diet of TUMS chewables.
Ensure that sales targets and expectations are clearly communicated and understood by all team members. This clarity helps in setting realistic and achievable goals. And frame the achievement of targets as a shared responsibility, highlighting how each person’s efforts contribute to the company’s overall success.
By focusing on these areas, companies can effectively navigate the complexities of hiring and team management. Companies will see the benefits of not only better results but also a happier and healthier workforce.
Will Magnuson, a sales leader at TigerEye, brings nearly 15 years of technology sales experience. He began his career as an early employee at Groupon and later transitioned into the SaaS sector as one of the initial sales team members at PlanGrid. During his tenure at PlanGrid, he progressed into a management role overseeing the Midwest region. Following PlanGrid's acquisition by Autodesk, Will continued to excel in management positions, contributing to the growth of Autodesk's Construction business, ultimately leaving as the Director of Mid-Market Construction. Will is a University of Dayton graduate who enjoys spending quality time with his wife and three sons in Chicago.
