You may have heard horror stories about outsourced sales teams that failed to deliver results. Or maybe you've struggled to build an effective in-house sales team from scratch. The truth is, creating a high-performing sales team is no easy feat - but it's worth the effort. In fact, one of our portfolio companies was able to add a whopping $21.6 million in extra profit in just one quarter by implementing the right sales team strategy.
How'd they do it? By going from zero to 40 sales reps in 120 days. Here's the step-by-step process we used to make it happen:
Starting with Mercenaries: The Risks of Outsourced Sales
When the company founder had no prior sales experience, we decided to bring in "mercenaries" - an outsourced sales team. This allowed us to start generating revenue quickly without building a team from the ground up. However, there were some major drawbacks:
- We had to give the outsourced team 20% of revenue, which was a huge chunk of cash
- Performance was subpar, with less than 30% of initial buyers making additional purchases
- Relying on an external team hurt the long-term sellability and enterprise value of the business
While the mercenaries got us off the ground, we knew we needed to transition to an in-house team to really scale the business profitably.
Building an In-House Sales Team: Hiring a Rockstar Sales Director
The first step was to hire one person who could then build out the larger team - a sales director. We looked for someone who had:
- Direct experience selling our type of product in our industry
- A track record of scaling sales teams
- Strong coaching and people development skills
- A data-driven, metrics-focused approach
- The right personality fit - even-keeled, humble, and able to repeat instructions enthusiastically
To find the right person, we relied heavily on our network and referrals, as well as extensive outreach to 100+ potential candidates. It took time, but landing a rockstar sales director was critical.
Optimizing the Sales Process for Maximum Conversions
With the right leadership in place, we rebuilt the entire sales process from the ground up:
- Implemented a "winners-win" compensation structure for both setters and closers that aligned incentives
- Reduced false urgency/scarcity and aggressive copy that turned off prospects
- Pushed for same-day or next-day appointments to increase show-up rates
- Added personalized video reminders from the closer to boost connection
- Adjusted the setter script to better qualify leads vs. just taking orders
By making strategic tweaks throughout the funnel, we increased total sales throughput even as the individual close rate went down due to more leads being passed through.
Rapidly Scaling Your Sales Team Without Losing Control
Going from 0 to 40 reps in under 4 months required getting creative with recruiting, including:
- Hiring multiple recruiting firms
- Leveraging our email list and network for referrals
- Running ads and posting targeted content
- Tapping managers to screen candidates to save the director's time
We also developed an internal sales training "course" complete with call recordings, live shadowing, and extensive role-playing to get reps productive faster. Underperformers were cut quickly to maintain a high-performance culture.
The Results: Outsourced vs. In-House Sales Head-to-Head
So how did it all shake out? Here's the before and after:
Outsourced team in Q1:
- $7M cash collected
- $1.4M in commissions (20%)
- $5.6M in profit for the company
In-house team in Q2:
- $12M cash collected
- $1.08M in commissions (9%)
- $10.92M in profit for the company
By switching to an in-house team, the company nearly doubled revenue while slashing commissions in half, netting out to $5.4M in additional profit in just one quarter - or $21.6M annualized.
Frequently Asked Questions
How long does it take to build an in-house sales team?
Realistically, it takes at least 3-4 months to hire a director, recruit and onboard reps, and get the team performing at a high level. But the long-term payoff is worth the upfront time and effort.
What if I don't have a large network to recruit salespeople from?
Leverage recruiters, ads, and content to get the word out. Don't be afraid to get creative and cast a wide net - you can always filter candidates later. The key is generating a large pool to select from.
How do I create an effective sales compensation plan?
Focus on building a "winners-win" model where top performers earn disproportionately more than average or low performers. Use tiered commission rates and activity-based bonuses to drive the right behaviors. Make sure both setters and closers are incentivized appropriately.
What's the best way to onboard and train new sales reps?
Develop a standardized course that incorporates videos, call recordings, scripts, live shadowing, and lots of role-playing. Focus on getting reps up to speed quickly but maintain a high bar for performance. Don't be afraid to cut underperformers early.
Building an in-house sales team isn't easy - but as this case study shows, the rewards can be huge. By following this blueprint and avoiding common pitfalls, you can unlock a step-change in revenue and profitability for your business. Take the time to do it right and watch your growth take off.