Category Archives: blog

SaaS Field Sales to Inside Sales Migration Trend

We see the sales structure at many companies in the Cloud Application space growing the % of Inside Sales reps much faster than field reps..

Read how sales team structure is evolving from a survey done by Velocify.com and published in an article by Steve Martin in the Harvard Business Review:

“In a typical sales organization, salespeople generally fall into three distinct functional roles: channel sales, inside sales, and field sales.

Depending on many factors, an organization can potentially have its entire sales force in only one of these functional roles or in some combination of these three roles. Each company’s chosen sales strategy helps determine the composition of its sales force, but there seem to be some notable differences according to industry. The average overall sales force composition was 65 percent field sales, 25 percent inside sales, and 10 percent channel sales.”

Click for the full report.

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Discounting to Move Orders In

When you offer a discount to get the order in the current period, the result is that the order closes when the buyer completes the purchase process (often after the sales rep deadline ends ) but the discount stays. This is supported by many research reports, as well as my experience of 30+ years in Sales & Sales Management.

What are the reasons a prospect may not accept your offer to buy now?

  • The budget is not yet approved
  • The gate keepers have not yet indicated acceptance of the product
  • The prospect is still seeking info on competitive solutions
  • Your price is not justified yet in terms of value perceived by the prospect
  • There is no acute pain regarding the problem your solution solves for this prospect
  • The purchase process is in the early stages
  • The switching costs to change to your solution are perceived to be unacceptable

If your sales team is discounting on a regular basis to get the order moved up, it could be an indication of several issues from weak value propositions to inadequate or inconsistent sales process to sales management coaching.

Contact Growth Process Group to learn how our Sales Assessment service can quickly identify the root causes and put you on a path to rapid improvement.

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On the Wisdom (or not) of Sales Commission Caps

I recently read and agreed with several comments on LinkedIn that you should not cap a sales rep’s variable earnings. As companies grow and Finance gains power, this tends to happen. That is one of the key reasons that your stars leave.
That said, there is one type of cap that makes sense.

That is a maximum on the variable compensation paid for any single deal. I call this the “Save the VP of Sales’ Job” clause. I would make that maximum large, on the order of the rep’s annual variable target income. If you do not have this in the sales comp plan and a rep blows it out such that commission for a single order is significantly greater than their annual target variable, ugly things happen. It is likely that several department resources were involved in the sales process of very large deals. Soon, the CEO and CFO are questioning why this happened. Department VPs express their staff’s unhappiness. The pressure builds and the Sales VP gets fired.

Contact Growth Process Group for answers to your Sales Compensation questions.

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