How I Would Build a CPG Sales Team After 5 Years in SaaS.

Last week I posted on LinkedIn some thoughts on how CPG brands should approach sales hires and the importance of looking for people who can convert instead of those promising to create.

The post sparked some good conversation and got me thinking…

As someone who spent several years as a CPG sales leader and then transitioned to SaaS (software as a service), how would I apply what I have learned over the past five years to a CPG sales strategy now?

The difference between the two industries is drastic, and transparently, now going into year five, I feel like I am just now starting to understand how to truly build out a SaaS sales strategy. With that said, I do think if I were to step back into CPG sales, that there are several key things I would apply from what I have learned.

The biggest difference that I have seen between CPG sales and software sales is that software sales is about one thing; processes.

If you have a process in place to convert a sale. You can then understand for every input into that process what the relative output of new revenue will be. There are very few surprises in a well-run SaaS sales process and you’re building your team based on the specialization of a singular piece of that sales process, not for general knowledge about the whole sales process.

As I stepped back to look at the difference between the processes, CPG is structured around region and account type while SaaS is structured around stages.

This would end up being a very long post if I went into full processes, proposed tech stack, etc.

So, I am going to focus on the team and how I would structure it since my original post centered around hiring.

In a traditional software sales process you might have 3-4 people touching a deal before it converts and then 1-2 people who weren’t even a part of the sales process then managing that customer once they do convert.

First of all, in SaaS, we are dividing the team between inbound and outbound leads. A BDR (Business Development Representative) might prospect clients and handle all outbound efforts while a separate SDR (Sales Development Representative) will qualify and manage the initial outreach to all inbound leads.

This is a key part that I want brands to hear and understand, leads are coming from both inbound and outbound, meaning that marketing is in charge of generating some percentage of leads. They have KPIs (Key Performance Indicators) rooted in sales and revenue growth. Even for CPG, if your retail marketing team is not beholden to KPIs that are revenue-based, you’re not holding them accountable. They can’t just point to engagement and audience growth, they have to point to velocity and new retailer opportunities.

This goes back to my original LinkedIn post, you should not make a sales hire unless you have marketing support. I have had thousands of brand conversations over the past five years and one constant is that most of the biggest accounts that brands get, reach out to them, not vice versa. This is a function of marketing and it has to be in place before you scale sales.

Once these leads are qualified and are interested in learning more, they are then handed off to the Account Executive who executes the demo and all the follow-up needed to convert the client. This group is then managed by a Sales Director or VP of Sales.

This was all so foreign to me when I started WeStock. As the Sales Director for three separate CPG companies, I managed the entire process. I would prospect the accounts, call and email the buyer, handle the pitch, follow up constantly, fill out the onboarding paperwork, and then manage the account once it was up and running. Outside of broker support, which added another thing for me to manage, I had very little support. This is how I have seen most CPG brands under $10M operate.

Now, once you get big, this one-person show continues, it is just broken down into regions or retail verticals. You might have a VP of Sales who is managing the team, but that Regional Sales Manager is managing the whole process for Foxtrot, and that Club Sales Manager is doing the same for Costco.

Let’s force ourselves to rethink this process through a SaaS sales mindset. Do you have your SaaS hat on? Good! Now, this is how I might structure a CPG sales team with that mindset in place.

BDRs - These would be entry-level salespeople who are reaching out to potential new accounts. That distributor list your local DSD provides you, that’s their hit list, and they call on it daily. Their sole job is to generate new business, but they also field all inbound. Ensuring that prospect is a fit and that they can service the account before handing it off to anyone else.

SDRs - I don’t think you can justify breaking up inbound and outbound for CPG, it just isn’t a big enough job. Instead, I would have SDRs just focus on account management. Their job is to maximize current accounts and ensure your distributors have sales support. In this model, an SDR would essentially be a CSR (Customer Success Representative). They are helping manage the account once it converts, but doing it in tandem with the AE.

Account Executive - I would then have an AE that handles trade shows, presentations, and closing accounts. This is the person who traditionally you would have managing everything because they know the industry, but in this model, we are going to have them do what they are best at, and that converts new accounts and increases business in current accounts.

If I were running this program for a brand under $10M/annually then I would stop here. There is no need to add a Sales Director on top of this, the sales process ends at the AE and maybe you give someone a Senior AE title and they set the revenue goals with the founder.

This might seem daunting and more expensive than just hiring one person, but a few things to think about here…

• You are going to open yourself up to a much larger pool of candidates when you aren’t just looking for one do-it-all industry veteran to run your sales process.

• You are going to be able to scale much easier because the process isn’t dependent on the Sales Director. As you experience growth, it's going to be easy for you to see which part of the sales pipeline you need to add to.

• You are going to reduce your exposure to a bad sales hire ruining your business. Spreading your team out across two to three people and giving them very focused roles instead of one broad role, is going to set up everyone for success and reduce the failure rate.

You’re also not tying up a 120K+ salary here for someone who has been at 2-3 stops at other brands in your category. Instead, you can find amazing, junior hires that are highly incentivized by commission but that can still get to $120K+ OTE (On-Target Earnings) with heavy commission and bonuses. You want a team that is motivated by results!

I think the difficult part of this strategy is the AE and SDR relationship. CPG is much more relationship-based than SaaS. The Sales Director that opens up Target, is tasked with maintaining that business and increasing that business for the lifetime that the brand is on the shelf. I don’t know if you want to mess with that structure because it might be too jarring for the buyer.

I do though want every minute of output from my AEs to be focused on closing new business or expanding current business. You want your sales team to mirror the Toyota Production System. Meaning that every unit of time and effort they put in must be focused on generating value (revenue) and it’s your job to eliminate waste from their day.

That is why as mentioned before we have the SDRs or CSRs managing the day-to-day of current accounts. They are working with the marketing team to fully support accounts. They are introduced by the AE who closed the account, but the buyer doesn’t feel like it’s a full handoff, instead, they are getting more support.

The AE is then only focused on revenue-driving events for that retailer, meaning they are handling category reviews, line extension meetings, and pretty much any buyer check-ins. Putting them in a place to focus on revenue creation.

So, to recap, we are breaking our sales strategy from one stakeholder into three, to maximize everyone's revenue-generating output and to create a structure that doesn’t call for you to hire another Sales Director for each region and account type.

I can imagine that this might seem abstract to some CPG readers, but I do think that this approach could potentially work for a well-organized brand. I also think that it could significantly reduce the pain of making the wrong sales hires.

It’s important to remember that salespeople are inherently good interviewers and that many of them know how to position themselves for your open role. Structuring your sales strategy around a process instead of a person, I think mitigates this risk.

I do want to spend time at some point also diving into the CPG sales tech stack because I think it's very behind other industries, but for this issue, I will stop and open up the conversation around this proposed new sales structure for CPG.

I welcome everyone to poke holes in this and add to it! Hopefully, this helps us all think about borrowing processes that work in other industries and applying them to ours.