The Simple System That Manages Your Sales Team for You

A friend of mine who's a brilliant M&A guy for for MSPs—and he does a lot of advising on the ops and and scalability and structure to help MSPs get a higher multiple when they when they sell—sent me a question. And it's a it's a question I've seen variations of in the in the past. So I'm just going to answer it for for you in case it's the same a similar question that you have.

And it was: If you've got a team of five hunters—and and maybe some BDRs or something that are augmenting their their process—but the the hunters are responsible for results. If you've got a team of people, like what's a good hiring and firing process that continues to keep your performing reps? So like, how do you how do you create a system or what do you do to keep your your top performing reps to push your your average reps and weed out the the bottom performers?

So here's my answer. I said, you know, the the best way really to to do this is first of all systematically. Like you you want a system in place with a sales team that kind of runs this on autopilot because when you get the right—and I'll I'll get into very briefly like what what that entails—but when you have a system that's running and it's consistent and it's transparent, what it does is it starts to manage for you. Like people understand that that system is working in the background. And as a rep, I know that I've got to achieve X in order for Y to happen. Or if I do A, then B is going to happen. And so they modify their own behavior without a sales manager having to like stand over their shoulder and crack the activity whip. Like "Hey, do more, call more, sell more." Like all like so, good system will will keep this going.

And really it doesn't have to be complex. Like I think it consists basically of two things. The first is separating your minimum standards from the actual goals. Right? And the minimum standards are what you take disciplinary action on. The minimum standards are what are required to maintain employment. The minimum standards are what are going to trigger any of the hiring and firing that that needs to occur and any of the performance management that needs to occur. And that's what you're going to base it on.

Right? You want to separate that from the actual goal. You want to have a goal that they're attaining, like trying to work towards, and probably has a a commission component to it and, you know, different, you know, different triggers for, you know, how they the incentives and all that stuff. That's their goal. That's their comp. That's what you want them to do. But the minimum standard is: This is minimum standard. Right? Like don't do this. This is trouble. Right? This is the trouble zone. And the minimum standard is a separate measure in any sales team that I've run than the actual goal.

Why? Because I don't want to run a high-churn sales team. Right? If I'm running a high-churn sales team, it's going to drain my resources, my time, fuck up the culture. It's like, I want a steady, consistent, high-performing sales team while also recognizing everybody's not going to be an A-player. Everybody's not going to be number one. Everybody's not going to be above average, otherwise you don't have average. And also recognizing that average is okay. Like average is good. Like your good, steady, average performers... you know when you're working on a team basis, when you're working at at scale... those people, they deliver. Right? Like what you what you really want to ensure is people aren't below average. They aren't poor performers on your team. Right? So you want something that weeds out poor performers and you want something that incentivizes or pushes average performers and is basically non-existent to top performers. Right? So separating the minimum standards.

And I just used like an example when I was sharing this with them that, you know, I had a sales team and it was, I think at the time it was like 25 people or so. And we the goal was 24,000 per month in sales. And then the next step was at 26, then at 28, then 30, 32. And so we had steps beyond that but the the goal that I really wanted everyone to hit was was 24,000. That was attainable. Like it wasn't easy, it was attainable on a consistent basis. An average person could hit that a reasonable number of times to make their their OTE or their on-target earnings. And so that's what the commission incentives were were structured on. Okay?

The minimum standard was 18,000 per month in sales. And that that threshold was something that... Listen, if you don't hit 24,000, listen, like you're gonna pay for it. Literally, you're gonna pay for it. But if you're falling below 18,000, well now the economics of the business, now everything else are at... like we that's just not manageable. Like that's not... we can't have that. Right? So: minimum standard 18,000; goal and where incentives really started was 24,000. Okay?

Now what you need when you have that in place is you need a system that addresses that minimum standard that's that that's operating for you in the background. And the second part of this then is having a clearly documented and enforced escalation policy. Okay? That like that's that's built around that minimum standard. And you want to have something that makes it really clear when the escalation is going to happen, what the escalation is, what the like... what is the sequence? What happens here? And make it transparent. Make it obvious. Make it make it crystal clear to everybody what's going to happen when certain actions happen.

So in this example, if you missed the minimum standard once, it was just a it was a discussion. Right? Like a basically verbal warning-ish but it was like, "Hey listen, like you know it, I know it, we gotta do better." And that would happen on occasion. At that at that level, right? The the 18,000 in this case. It was something that occasionally, you know, somebody would fall below once once here and there. Hey, like so long as it's not a pattern of behavior, like that's what we're trying to address here... All right, basically not much. Verbal discussion about it. Now if you miss it twice, or you miss it twice in three months, it was a written warning. Right? And then we would, you know, we'd put you on, you know, performance plan, air quote, all that stuff. But it was two times or two out of three times is going to be a written warning. And then if you miss it three times or three times in five months, then it was going to be termination. You had to have a written warning before the termination. Right?

And that was just... that was just it. Like that was just the system. And what am I doing? I'm I'm creating a standard that top performers aren't really ever going to notice. They never are going to fall below 18,000. Your average performers... they're aware of it. It's there. It's a number that's low enough in this case that... you know, it's like it it should be there. It should make sure that you maintain some, you know, some level of of activity and productivity and focus and shit like that. But it's not it's not like, "Oh my god, that number is like that that like having to hit that is stressful every single month." Like that wasn't the goal. Like I wasn't trying to stress you out to get fired. I was trying to stress you out if you were well below average. Like if you were a bottom performer.

And then bottom performers struggled to attain that number. And, you know, the the average performers occasionally if they dipped, like there'd be a a discussion and they'd they'd bounce back. Maybe they they find themselves in a written warning situation, you know, every couple of years or something like that. But they are they're they're going to deliver. And, you know, it's the the bottom performers are going to systematically be rooted out.

So, um, this is what we used for for that. Now you want to take into account the sales cycle. Right? Like if you know if it's a transactional sale where it's kind of like a one-call close, you can do it on monthly sales. If it's something that has a two or a three month sales cycle, take that into account. So for a lot of MSPs what we'll do is put in place a an identical system—like different numbers—but identical system and have it be based on a 90-day rolling average. Or something along those lines. Like you can get creative with it.

But you want to make sure that it's systematic. And then within that system there's basically two parts. It's separating: What is the minimum standard that you will you will accept? In other words, if somebody in in this example is consistently doing 21, 22 thousand... they're gonna maintain employment. That's fine. They're not gonna make very much money. Or they're not gonna make nearly as much money as they could. That's kind of on them. But the fundamentals of the business and the economics of the business and the margins and all that said: "Okay. Like if you want to keep doing that, it will will keep making a profit." Um, and then the the second piece is, you know, just making sure that you have a a process that's documented, clarified, transparent, clearly communicated, and consistently enforced to run for you.

If you have those things, what happens is your need to micromanage as a as a sales manager or as a business owner or whoever, um is is diminished. And um you let the system do some of the work for you. And it does the right thing for the right category of people.

So, hope that helps. Adios.