From: alexhormozi
Organizational structure plays a critical role in the efficiency of the sales process and a company’s overall performance. Problems within the sales organization, including leadership, role definitions, and team expectations, can significantly hinder revenue generation and cash flow [00:00:19]. Addressing these structural issues can lead to substantial improvements in key sales metrics like show rates, close rates, and cash collected upfront [00:22:25].
Initial Organizational Problems Affecting Sales
Before implementing strategic changes, a company’s sales operations faced several challenges rooted in its organizational structure:
CEO as Sales Manager
A common issue for many sales teams is promoting the best closer to a sales manager role, even if they lack management skills [00:12:55]. In one case, the CEO, despite being the best closer, was not an effective sales manager, leading to high churn within the sales team [00:13:02]. This also meant the CEO was preoccupied with sales management rather than core CEO responsibilities [00:15:19].
Multitasking Roles
The sales team struggled with multitasking, particularly between lead setting and nurturing/follow-up [00:06:06]. While seemingly similar, these are distinct activities that require different flows and focus [00:06:15]. This lack of specialization led to:
- Inconsistent double dialing [00:06:28].
- Slow speed to contact for new leads [00:06:38].
- Poor nurturing and reminders for scheduled appointments, reducing show rates [00:07:00].
Unrealistic Sales Team Expectations
Setting low expectations for sales performance can cause individuals to “shrink down” to that level [00:14:41]. For the setting team, their expectation of setting two appointments per day was significantly lower than the benchmark of three, representing a 50% increase in potential sets [00:14:29]. Low team utilization also meant salespersons were too desperate to close deals, affecting their sales approach [00:18:18].
Solutions Through Organizational Restructuring
Strategic changes in the organizational structure were implemented to address these core issues, prioritizing the “who” over the “what” or “how” [00:15:42].
1. Hiring an Experienced Sales Director
The first and most crucial step was to hire an experienced sales director [00:15:11]. This move relieved the CEO from micromanaging sales and brought in professional expertise necessary to implement further changes [00:15:16]. An effective sales director understands that good management involves both building skills in people and tracking relevant metrics to achieve goals [00:17:01].
Identifying the Right Talent
When hiring, especially for leadership roles like a sales director, evaluate candidates based on their ability to articulate what data they would collect and how they would use it to solve problems. This reveals their nuanced thinking and execution capabilities [00:16:43].
2. Optimizing Team Structure and Expectations
To improve sales team scaling strategies, the sales team was reduced, and expectations were reset [00:17:42].
- Reduced Sales Team Size: By assessing sales team utilization, it was determined that too many salespeople were on staff given the actual volume of sales calls they were handling [00:17:49]. Reducing the team size allowed for cutting underperformers and rewarding top talent [00:17:55]. This simultaneously improved the overall closing rate of the remaining team and fostered a culture of high performance [00:18:10].
- Increased Setting Team Expectations: The daily appointment setting expectation for the setting team was increased from two to four [00:18:51].
3. Creating Specialized Roles
To eliminate counterproductive multitasking, one setter was promoted to a dedicated “lead nurture specialist” [00:19:01]. This role acted as a bridge between the setting and closing teams, focusing exclusively on coordinating and reminding prospects of their appointments [00:19:15]. This specialization was supported by a checklist of best practices, including:
- Three-way introductions: Connecting the setter, prospect, and closer via phone to build trust [00:19:30].
- Personalized morning-of reminders: Closers sending personalized voice memos or video texts to prospects on the day of their appointment [00:19:50].
Additional Sales Process Optimizations
Beyond structural changes, crucial adjustments were made to the sales process:
- Improved Ad Targeting: Initial ad targeting was optimized for the lowest cost leads and appointments, leading to many unqualified prospects [00:05:30]. This was corrected by optimizing for “cost per sale,” ensuring traffic quality and reducing the need to cancel appointments [00:05:37]. This also involved replacing a negligent media buyer [00:17:20].
- Optimized Sales Scripts: The effective sales scripting process was revamped to move beyond “surface-level discovery” questions [00:08:01]. Salespeople were trained to ask deeper “why” questions to understand prospect intention and underlying motivations [00:08:37]. This also involved proactively addressing potential objections early in the sales process to “kill zombies” before they become problems in the close [00:20:18].
- Drilled Looping and Asking: Sales teams were trained on “looping” — handling objections and asking again repeatedly [00:21:01]. This ensures concerns are resolved and salespeople are not afraid to make the ask multiple times [00:21:13].
Impact on Sales Metrics
The combined effect of these organizational and process changes significantly boosted sales performance within 60 days [00:00:01]:
- Show Rate: Increased from 49% to 70%, achieving the target benchmark [00:22:25]. This was a 40% improvement [00:22:47].
- Offer Rate: Remained stable at 83% [00:22:58]. While not an increase, it indicates the sales team maintained quality offering despite pressure for commissions, due to improved lead quality from ad targeting fixes [00:23:02].
- Close Rate: Improved from 27% to 41%, exceeding the 40% benchmark [00:23:12]. This represents a 50% improvement [00:23:19].
- Cash Collected Upfront: Soared from 47% to 82%, nearly doubling the cash collected per sale [00:23:44]. This metric highlights the buyer’s conviction in the solution, which is heavily influenced by deep discovery and effective closing [00:23:33].
- Units Sold (Overall Output): Monthly units sold increased from 56 to 93, demonstrating a substantial growth in overall sales volume [00:24:16].
These results underscore the profound importance of prioritizing and optimizing organizational structure to achieve significant improvements in sales efficiency and revenue [00:24:06].