Building a Startup's Sales Department: Roles and Definitions
As a founder it’s important to not just build a great product - you also need to know how to sell it. For some, selling comes easy. For others, it’s something we have to constantly be working on. It is incredibly important as a founder to feel confident selling your product. After all, if you can’t sell your product who else is going to find it worth selling? If you’re looking to work on those sales skills, then check out this free bootcamp we’re organizing on April 2nd.
However, after you’ve locked in the basics on how to sell your product, you’ll want to start growing your sales team so even more people can help lock in revenue.
I wrote this blog post to provide founders - who are looking to grow their sales team a bit more information on the types of roles you’ll want to hire and some basic sales terminology to get you started. Remember: you don’t have to be great at everything as a founder, you just need to know how to find people that excel at the skills you lack.
What are the Roles in a Sales Department?
We won’t be touching upon the role of a Sales Manager or other management roles - in general, depending on your startup’s size, those roles are focused on hiring, budgeting, meeting goals, assisting with high-stake customers, and managing the employees in your sales department - but below, you will find the five most common sales roles you’ll want to have on your startup’s team.
Inside Sales Rep
This type of position does a lot of cold calling or emailing. They never visit prospects on-site and always work from the office (or their home office, in COVID times). Sometimes, depending on the company, inbound calls may also land on an Inside Sales Rep’s list to manage, and this position can also be outsourced to third-party vendors depending on budget. In short, they are responsible for outreach and closing the deal.
As an early or growth stage startup, you’ll want someone on your team that lives, eats, and breathes this role. This would be the first person I would hire.
Field Sales Representative
The word “field” is in this position’s title because these sales reps go from location to location to meet with customers, rather than sit at their desk. The tech companies that often employ Field Sales Reps are B2B companies who rely on relationship-building and long-term contracts.
So if your company has a freemium or SaaS model, this may not be a great fit for you. But if you’re selling deals of $100k per year, then you’ll want to invest in someone that can build great relationships.
Sales Development Representative
SDR’s (also known as Sales Development Representative) don’t focus on closing the deal. Inside, they focus on qualifying leads and reaching out to potential buyers. But once figuring out if someone is a good fit, they move the lead on to someone, either the Account Executive or Founder (depending on your startup’s size).
This role will likely be a great fit once you can afford to have both an SDR (someone who is more “green” in sales) and an Account Executive (someone who is great at closing).
Also known as: Sales Force Representative, Business Development Representative (BDRs)
An Account Executive is someone who takes the qualified lead from the Sales Development Representative (or SDR, see definition above) and closes that deal. Then, depending on the company, they may own the account or pass it over to Customer Success. Either way, you’ll want this person to play a role in the on-going relationship - contract renewals are a team sport.
Sales Engineers work closely with the sales team, but aren’t responsible for closing the deal. Their job is to have extensive knowledge of your startup’s product. Not only do they need to know the features inside and out, but they also need to have the “technical know-how” of how everything works together. They come in when a prospect’s engineering team wants to talk about integrations or your legal team is curious about what compliance policies you have in place.
I would still say the Inside Sales Rep is the most important person to have on your team, but a Sales Engineer would be my second hire, depending on how technical your product is.
Also known as: Sales Administration, Sale Specialists
Sales Terminology You Should Know
While you’re interviewing, building or managing your sales team, there’s some terminology that you should know both in order to interview for the role and in order to communicate with your team members as your startup grows.
Please keep in mind: you do not need to know everything, that’s why you hire someone that understands sales better than you, you just need a baseline understanding.
Weighted vs Unweighted Sales Pipeline
I found a really good article on Propeller that broke down both a weighted and unweighted sales pipeline. So I’m going to quote it right here for you:
An unweighted sales pipeline looks at the full potential value of opportunities at every stage of the sales funnel. Each deal is considered equally likely to close, whether you’ve recently made contact via cold call or they’re ready to sign on the dotted line. This can lead to inflated revenue forecasts if high-value opportunities fall through.
A weighted sales pipeline, on the other hand, acknowledges that not every opportunity results in a sale. This is a more detailed sales forecasting method that assigns a value to each deal based on where it is in the sales funnel.
In a weighted sales pipeline, opportunities with higher likelihoods of closing are given more weight in sales forecasting. This helps account for the fact that not all leads become customers. The idea is that the further along a deal is in your pipeline, the greater the probability it will close.
So, instead of simply stating that you have five active prospects and $100,000 in potential sales, you might say you have five opportunities with a 50% or higher chance of closing a sale.
A bit like the definition above, but perhaps more in “layman’s terms,” the Sales Pipeline shows you every opportunity that you or your sales team is talking to. This includes everyone on the cold call list to those you’ve had a demo with and rounding it out with those who have a contract in front of them. It’s everything on your radar that you haven’t closed (yet).
Sales Pipeline Coverage (SPC)
In short: how much pipeline your sales team has versus how much quota your sales team still needs to close.
According to Brainshark:
Pipeline Coverage is calculated by dividing your open pipeline by how much quota you need to close. General rule of thumb is to have 3x to 4x pipeline coverage. This means you want to have 3 to 4 times more pipeline than quota.
Sales Qualified Lead (SQL) vs Marketing Qualified Lead (MQL)
I think IMPACT broke down the difference of these two terms the best:
MQL refers to a lead that is more likely to become a customer compared to other leads based on lead intelligence and is usually conveyed by closed-loop reporting. SQL means that the sales team has qualified this lead as a potential customer. The SQL is in the buying cycle, while the MQL is not ready for that buying stage just yet.
In layman’s terms: your identify action times that signal a potential customer. You then take those action items and assign points to them.
Visiting a website page: 1 point
Downloading a whitepaper: 2 point
Attending a webinar: 2 point
Engaging with your website’s bot: 5 points
You take every single action item that someone could do on your startup’s site and identify which actions are the most - or least - important and assign points to them accordingly. The, you identify how many points someone would need to accumulate in order to pass them over to the sales team.
The goal of Lead Scoring is to empower your marketing team to help your sales team - this way the sales team knows that the lead is worth their time and is genuinely interested in potentially buying your startup’s product.
BANT stands for: Budget, Authority, Needs and Timeline. This checklist will help your sales reps know if the person they’re talking to is a good potential fit, or if they should save their time and move on to someone else.
Customer Relationship Management (CRM) System
You likely know what a CRM is, but if you don’t, it’s a tool used to track what prospects you are tracking to, who you’ve sent contracts to and which deals you’ve closed or lost.
If you don’t have a CRM in place yet, then it’s really important to invest in one. It will only make your life easier in the long run - rather than living out of Google Docs. There are also a lot of free CRMs out there for you too, until you can grow into one you love or need.
Join Us for More Sales Chat
Did you have a bunch of fun learning more about sales roles and some basic terminology? Good. Because there’s still more in store for you!
On Friday, April 2nd, Startup Boston is hosting a free one-day event, Close the Deal: Your B2B Tech Sales Bootcamp, where we’ll go over cold calling, how to build your sales team, leading a product-value driven sales conversation, managing deal negotiations, and more! Get your free ticket today by clicking right here.