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Sales Force Effectiveness: A Key to Growth in the Middle Market

 

This post takes a look at the characteristics of middle market companies with effective sales forces; based on research from the Center in partnership with the American Marketing Association. For the full research report, see The Force Is With You: Building a Highly Effective Sales Organization.


Ask a roomful of middle market executives about the effectiveness of their sales forces, and most of them will tell you their salespeople are very good at what they do. The Lake Wobegon effect may contribute somewhat to this positive assessment of sales performance, but a recent study by the National Center for the Middle Market reveals a clear correlation between sales force effectiveness and company growth.

In other words, middle market firms that say their salespeople are good at their jobs have the numbers to back it up.

Here’s a closer look at some of the study’s findings and how middle market organizations with effective sales forces stack up.

Organizations with the most effective sales forces are larger than their peers.

Middle market companies of all sizes agree that sales is an important factor driving overall organizational success, followed by customer service and operations. However, larger middle market firms are significantly more likely than their smaller counterparts to say their sales forces are very to extremely effective at their jobs.

Specifically, 79% of core middle market companies (annual revenues between $50 million and $100 million) and 77% of the largest middle market businesses (annual revenues between $100 million and $1 billion) report a highly effective sales team, compared to just 63% of smaller middle market business (annual revenues between $10 million and $50 million). Among the smaller companies, one-third say their sales forces are only somewhat effective, and 4% say the sales team is not effective.

Companies with talented sales teams are growing rapidly.

Regardless of the current size of the business, organizations that report sales force effectiveness are growing faster than their peers. Among companies experiencing annual revenue growth of 10% or more, eight in 10 businesses rate their sales force as very to extremely effective compared to just 67% of slower-growing middle market companies. More than a quarter (28%) of the fast growers give their sales team top marks, describing them as extremely effective, compared to just 15% of slower-growing businesses.

Employment growth goes hand in hand with sales effectiveness.

In addition to revenue growth, middle market businesses with high-performing sales teams are increasing their headcounts. Among firms rating their sales forces as very to extremely effective, 62% increased the size of the workforce in the past year, and 67% plan to grow the workforce in the next 12 months. In comparison, among those companies that say their sales force is less effective, only 43% increased the size of their staff last year, and 47% have plans to hire in the year ahead.

If, as the study suggests, a highly effective sales force can help drive growth, then companies looking to expand may want to consider investing in the development of their salespeople. To learn more about sales force effectiveness in the middle market and the best practices of companies with the strongest sales teams, see the Center’s full research report, The Force Is With You: Building a Highly Effective Sales Organization.


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