Your sales function or organization can vary wildly depending on factors such as the type of business you're running (e.g., software vs. hardware), the industry you're selling into (e.g., Defense vs private sector), and your product (e.g., Sales Force CRM vs Angry Birds). On one end of the spectrum, you may not have a formal need for a sales team if your business is selling CPG products D2C. On the other end, you may be selling very expensive machinery into a very niche market that requires a  small village of people to work a single deal on an 18 month sales cycle. 

A sales strategy is a plan by an individual or a company to sell products or services to generate and increase revenue. It enables you to sell your "thing" over and again successfully. This strategy should be constantly tested, evaluated, and optimized to achieve the desired results. Your sales strategy should be informed by your GTM strategy. It should also be aligned with your product strategy and product roadmap. A well-developed sales strategy addresses three key areas: how leads will be generated, how prospects will be converted, and how accounts will be managed.

Your sales strategy will identify your target customer base and market, understand your company's unique selling points, develop your unique pitch, and evaluate the best sales channels for your product.

Your sales strategy should be customer-centric, emphasizing relationship-building and providing solutions to your customers' problems, rather than just pushing products or services. It should be flexible, allowing for modifications based on market changes, customer feedback, and sales performance. 

It's common to think about sales and marketing as different functions, but many organizations also combine them into a joint Sales & Marketing (or Smarketing) team. In either case, sales and marketing need to be aligned and work cohesively to maximize customer acquisition and retention.

• Sales Channel Management: These are the routes through which your product or service is sold to customers. Sales channels can include direct sales (selling directly to customers), indirect sales (through a third-party, like resellers or affiliates), online sales, inside sales (selling remotely over the phone or via email), field sales (selling in person), and more. The choice of sales channels should be strategic, based on your product, target customers, and overall sales strategy. You can also expect that any "middlemen" selling your product will require not only proper incentives, but also some level of management and coordination to have them push your product along with the rest of their portfolio.

• Sales Coaching: Sales coaches work closely with sales team members to identify areas for improvement, provide feedback, and offer tailored guidance to enhance their selling skills. If your sales force is conducting outbound sales, then this is crucial. The mental and emotional toil of outbound can be tough, period. Additionally, your sales people are the face of your company and they represent you when they are reaching out to hundreds of people a week (quantity to vary by company). Think of cold outbound as a one on one branding exercise - whatever your rep says to a prospect on a cold call or email may define both how that prospect thinks of your brand going forward and how they talk about you to their peers (e.g., your other prospects).

• Sales Enablement: Provide your sales team with the necessary tools, training, and resources to effectively sell the product, including sales collateral, CRM systems, and product knowledge.

• Sales Operations: This refers to the set of activities and processes that support and enable the sales team to sell more efficiently and effectively. Key functions include sales planning, sales forecasting, territory design and management, compensation and incentives planning, sales analytics and reporting, CRM management, and sales technology and tools support.

• Sales Forecasting and Metrics: Establish key performance indicators (KPIs) and reporting mechanisms to track sales activity, pipeline, conversion rates, and revenue targets.

• Sales Compensation Planning: Aligning your overall business incentives with a variable compensation structure that motivates your sales team. This is a very complicated topic that we'll cover in depth on its own dedicated page.

• Sales Process and Methodology: Define a clear sales process that outlines the steps, roles, and responsibilities from lead qualification to deal closure.

• Sales Team Structure: Determine the ideal organizational structure, including sales territories, specialization (e.g., inbound sales, outbound sales, account management), and team size.

• Sales Training: Sales training involves providing education and skill development to the sales team to improve their abilities and ensure they are aligned with the sales process and methodology. Training is not a "one and done" sales activity as implementing refresher trainings and introducing new ideas is a continuous learning process.

• Proposals: This involves designing a structured and effective process for creating and managing sales proposals. Key considerations include how to customize proposals based on customer needs, terms and conditions to be included, approval process, tracking proposal status, and how to handle negotiations and objections. Proposals should clearly articulate the value proposition, pricing, and benefits of your product or service to persuade the customer to buy.

• Prospecting: This is the process of sourcing new leads or potential customers for your business. Sales reps typically engage in various prospecting activities such as cold calling, emailing, social selling, and networking events to identify and engage potential customers.

• Revenue Operations: This *may* sit as its own functional department outside of sales depending on your business. RevOps is a holistic approach to sales and marketing alignment, bringing together sales operations, marketing operations, and customer success operations under one umbrella. The goal is to streamline processes across departments, break down silos, and drive revenue growth. RevOps focuses on managing end-to-end revenue processes, optimizing the revenue lifecycle, and providing data-driven insights to drive strategic decision-making.

No sales conversation is complete without discussing the scoreboard. No function in the business has more clearly quantifiable inputs and outputs than the sales team. On top of that, sales is typically a very lucrative pay for performance setup that motivates a highly competitive environment to produce numbers.  Sales KPI's are the heart of your scoreboard, helping you understand how well your team is performing and where there may be opportunity for improvement.

Sales KPI's can be vast - trackign and analyzing data in many ways. Unfortunately, there isn't a one size fits all list of KPI's for every business to use, but in general you should pick the ones that help you analyze what's most important to your business. 

In "The High-Velocity Sales Organization," Marc Wayshak provides the following framework to increase sales: you must either increase your conversion rates, increase your average deal sizes, or increase the number of opportunities in the pipeline. Further, if you increase each one of these three by 26%, the result is that you double your sales.

The metrics you pick will be unique to your situation and should align with your overall business KPI's. Here are some popular sales KPI's to consider:

• Annual Recurring Revenue (ARR): This KPI reflects the total value of the recurring revenue from your subscriptions on an annual basis. It’s often used by SaaS or other subscription-based businesses. Monthly Recurring Revenue (MRR) is the same concept, but on a monthly basis rather than annual.

• Churn rate: – This measures the rate at which customers stop doing business with you over a given period of time, typically calculated on a monthly or annual basis.

  • • (Number of Customers at Start of Period - Number of Customers at End of Period) / Number of Customers at Start of Period

• Customer Acquisition Costs (CAC): This measures the total cost of acquiring a new customer, including all aspects of marketing and sales.

  • • Total Cost Spent on Acquiring a Customer / Number of Customers Acquired

    • (Total Sales Spend + Total Marketing Spend) / Number of Customers Acquired

• Customer Lifetime Value (CLTV or CLV or LCV or LTV): This measures the total value you can expect from a single customer account over the length of their relationship with your company. There are differing opinions on whether this value is purely related to lifetime revenue or profit. If you're making a one-time sale and don't expect many repeat sales or revenue streams, then this could be a fairly simple exercise. If you're providing a multi-year subscription service with annual billings and an annual cost of serving a customer, then this becomes a slightly more complicated exercise that may take into account the net present value of cash flow in future years as well as the cost of capital. With that in mind, here are some simple references for how this may be calculated.

  • • Average Purchase Value * Average Number of Purchases * Average Customer Lifespan

    • (Average Monthly Revenue per Customer * Gross Margin per Customer) / Monthly Churn Rate

• Net retention rate (NRR): This KPI measures the growth of existing customer revenues, considering both upsells/cross-sells and churn.

  • • (Starting MRR + Expansion + Upsells - Churn - Contractions) / Starting MRR

• Meetings/Demos Scheduled: Popular in B2B SaaS sales. This simply represents the number of qualified meetings you set up per the definition of your sales process. For example, a B2B SaaS org may expect to convert 10% of all product demo meetings into a sale, so tracking demos scheduled is one way to estimate performance.

• Remaining Performance Obligation (RPO):  This is the contracted revenue that is yet to be recognized (i.e., your backlog). It’s commonly used in SaaS or other subscription businesses. It's also common in industries with long term service contracts.

• Sales Velocity: This KPI has been growing in popularity over the last few years. This measures how quickly leads are moving through your pipeline and generating revenue.

  • • (# of Opportunities in the Pipeline * Average Deal Value * Average % Win Rate) / Length of Sales Cycle

• Time in Stage: The number of days an opportunity has been in a given stage of your sales process. This helps identify the average number of days per sales cycle, helping identify areas for improvement. It also helps you quantify the average sales cycle by aggregating the stages.