Scale Up Academy: Six tips for hiring ‘revenue leaders’
By: Harry Thomas, Beringea UK Portfolio Director
Quickly growing companies must carefully consider the role of the “Revenue Leader” when building a scale-up leadership team. CEOs across our global portfolio of SaaS and B2B companies joined for a roundtable discussion led by Tom Glason, a highly experienced revenue leader and founder of Scalewise, to examine how to recruit, retain, and empower Revenue Leaders to deliver accelerated sales growth across your business.
Glason recommends six tips to hiring the right Revenue Leader:
- Define the role and determine the correct title based on the need you are hiring for:
- Sales Manager: this is a role responsible for leading and supervising a team of sales representatives, providing coaching and guidance, setting sales targets, and ensuring the team meets or exceeds sales goals.
- Vice President Of Sales: a senior executive who leads the sales department, develops sales strategies, builds customer relationships, and collaborates with other departments to drive revenue growth.
- Chief Revenue Officer (CRO): this is a C-Level executive who focuses on maximizing sales across all revenue-generating functions, including sales, marketing, and customer success, by aligning strategies.
2. Identify your challenges. Determine the specific challenges your company is currently facing in terms of revenue generation and look for revenue leaders who have actual experience dealing with these challenges successfully in previous roles. Hire for today’s challenges, not necessarily tomorrow’s.
3. Provide support. Consider providing a GTM (Go-to-Market) coach or c-suite support to assist new Revenue Leaders in their roles.
4. Establish a competitive compensation structure for sales leadership roles. For a Head of Sales, offer a base salary between $110,000–135,000 (£90,000-£110,000) with an On-Target Earnings (OTE) range of $196,000-$245,000 (£160,000-£200,000). A Vice President Of Sales might expect a base salary ranging from $147,000-$196,000 (£120,000-£160,000) with an OTE range of $294,000-$245,000 (£240,000- £300,000).
5. Behavioral interviewing. When interviewing potential revenue leaders, focus on behavioral questions rather than theoretical ones. Request real-life examples and ask for specific instances where they have demonstrated key traits and skills.
6. Run role plays. Conduct role plays, such as cold call simulations, to evaluate their questioning skills and listening abilities. Key traits to look out for include:
- Curiosity: Assess their curiosity to understand their drive for continuous learning and improvement.
- Coachability: Determine their willingness and ability to accept coaching and feedback.
Building out the team below the Revenue Leader
Once a Revenue Leader has been hired, Glason advises building out the sales team by determining how many revenue representatives your leaders can hire in a fixed period. Realistically, without providing any additional layer of support, a revenue leader can hire two to three representatives per month. They should plan for an appropriate ratio of Sales Development Representatives (SDRs) to Account Executives (AEs) (2:1 is a good starting point) based on factors such as:
- Average order value (AOV)
- Pipeline generation by the marketing team
- Unit economics
The compensation structure for SDRs and AEs can of course vary widely depending on industry, but Glason recommends keeping the commission structure simple, with motivating but achievable target levels and a simple prompt payouts to the sales team. Paying commissions based on billings rather than bookings encourage the sales team to stay on top of invoices and assist with Accounts Receivable (AR).
Revenue Leaders should also plan adequate time for AE onboarding, considering the length of the sales cycle and buffer periods for performance optimization. Typically, AE ramp times range from two to four weeks for onboarding, plus the sales cycle duration and an additional three-month buffer period.
