More Sellers Doesn't Mean More Sales
Jun 23, 2024More salespeople doesn't mean more sales.
If 10 salespeople generate $10M ARR.
That doesn't mean 50 salespeople generate $50M ARR.
It doesn't mean 100 salespeople generate $100M ARR.
The math isn't that simple.
The more salespeople you add:
-the more you come up against competition
-the more competitive lead management becomes
-the more diminishing returns affect your results
It works best when the product improves at rates that supplement diminishing returns.
When it doesn't, the more you scale your sales team, the less revenue each AE produces.
If you want to plan realistically;
Plan on less revenue per AE as you add AE's.
The efficiency isn't the same at scale.
Not in most situations.
Unless the growth of the product keeps up with the growth of the sales org.
Otherwise hitting quota gets harder as the sales team gets bigger.
That's an expensive combination of problems to have.
Where this isn't always true is when outbound is working really well (or full cycle AE's).
If you can hire salespeople who generate enough of their own pipeline to support hitting their quota, then more salespeople can equal more sales.
But even then there will be diminishing returns at a certain point because eventually you're calling on the same leads twice. Plan accordingly.
Happy Selling,