Knowing when to ramp up investments in sales

More sales is almost always better, but there are certain times during which investing in sales has a greater impact on the success of a company. Learning when to invest heavily in sales and when to focus on other areas of business is a crucial element of running a prosperous organization.

Customer acquisition rates are the telltale signs of whether a business should aggressively invest in its sales department. Capitalizing on momentum is pivotal, and when a company hits a certain size, it is able to achieve tremendous growth rates by devoting more resources to sales and marketing. As Business 2 Community notes, it isn't unusual to see businesses in this transition phase grow between 20 and 30 percent per quarter on a successful sales strategy.

At the same time, sales managers need to stay on top of their game and plan accordingly as they look to expand. This means adding qualified agents while also containing growth and other associated costs, such as telephones, office furniture and computer systems.

"Plan too conservatively and the company misses an opportunity to invest early in bolstering its sales team and fails to achieve its growth goals," Business 2 Community adds. "Invest too aggressively and the company's costs base grows uncontrollably, outstripping the revenue growth and eating into reserve capital or requiring a sooner-than-expected fundraise."

Sales management at a growing business

In prosperous times, it may be easy for sales managers to grow complacent. However, they should always be looking to create the most efficient and effective sales team possible.

For example, this could means adjusting the sales compensation plan to match the company's current goals and needs. By matching it to the business' current growth rate, sales managers can do a better job of rationalizing and controlling sales compensation costs. A well-thought out plan will also be beneficial in helping new sales reps get on track earlier in their careers.

"So together with the growth of the team, it is important to grow the management capability by investing in sales management staff with analytical experience, improving sales performance measurement systems, and investing in a sales compensation management system like Callidus orXactly," the news source advises.