This post shares selling strategies of large middle market firms. For more middle market sales force best practices, see the latest research report, The Force Is With You: Building a Highly Effective Sales Organization.
Sales drive revenues. So it makes sense that middle market firms at the higher end of the revenue spectrum should have the most effective sales teams. Recent research by the National Center for the Middle Market confirms this assumption: companies with annual revenues of $50 million or more are significantly more likely than their smaller counterparts to rank their sales teams as highly effective.
But what, specifically, makes those sales teams good at what they do? The research shows that as firms get larger, how they approach and structure the sales function changes. Larger middle market companies share a number of key selling practices that set them apart from smaller organizations.
Here are few practices that define sales strategies in the largest middle market businesses:
- Bigger companies look beyond their four walls for hiring and training. Most middle market companies promote senior salespeople from within the company; however larger firms look outside the organization for senior sales candidates more often than smaller businesses. Larger companies are also more inclined to work with professional recruiters or forge relationships with sales programs at colleges and universities to find sales candidates. Once salespeople are hired, larger businesses often take advantage of technology-based training or outside seminars and workshops to groom their sales staff, while smaller companies tend to stick with in-house training.
- The larger the firm, the better it is at building new markets and driving the business. At the largest middle market companies, executives believe that their sales people know how to identify opportunities and turn them into successes for the business. Specifically, 60% of the largest middle market companies say their sales force is very good at building new markets, compared to just 48% of the smallest middle market companies and 46% of core middle market firms. Similarly, 63% of larger middle market companies say their salespeople know how to drive the business forward compared to 54% of smaller organizations and 60% of core companies.
- Big businesses outsource selling. Among the largest middle market companies, 57% outsource at least part of the company’s selling effort, compared to just 31% of smaller middle market firms and 40% of core firms that do the same. These bigger companies typically outsource between 40% and 60% of the sales effort.
- As firms grow, they are more likely to employ straight-commission salespeople. More than half (56%) of the largest middle market companies have straight-commission salespeople on the payroll compared to 33% of the smallest firms and 44% of core businesses. It may be that in these larger companies, salespeople have the opportunity to generate more sales, eliminating the need for a base salary in addition to commission. Or it may be that big firms are more inclined to use commission to motivate the sales team to work harder. The largest middle market companies are also much more likely than their smaller peers to offer bonuses as part of the compensation package.
- Collaborative selling is more common in larger businesses. Almost a third (31%) of companies at the top end of the middle market revenue segment take a team approach to selling. In comparison, just two in 10 of the smallest middle market businesses do the same. It’s likely that larger businesses deal with larger customers that have more complex buying centers, thus necessitating cross-functional selling teams. While all salespeople are primarily evaluated based on individual performance, in larger businesses, the performance of the team and overall company performance weigh more heavily into the review process.
- Greater separation exists between sales, marketing, and service in bigger companies. Bigger firms tend to have separate sales, marketing, and service teams or departments, and this separation can foster conflict and communications problems between the different functional areas. Perhaps because of this, larger companies are less likely than smaller ones to say the relationships between sales and marketing and between sales and service are highly effective. Still, more than 60% of large middle market businesses say these relationships are solid, which is interesting given the classic tension that exists between sales and marketing at many companies.
If big companies do in fact have more effective sales staffs, as they claim they do, then adopting some of their sales practices may help your business drive better sales performance. To learn more about the sales practices of middle market companies, see the Center’s full research report: The Force is With You: Building a Highly Effective Sales Organization.