I had a conversation with the CEO of an enterprise software company yesterday.  He was lamenting the fact that his sales team had missed their number for the third consecutive quarter and he was preparing to bring on incremental sales staff to rectify the problem.

All too often I hear the “hire more sales people!” battle cry when sales are flat or declining, especially from CEOs who’ve come up through the sales ranks.   Before you go off and hire more sales people, ask yourself these three questions:

1)   Are your sales people really your primary lead source?

Every CEO likes to think his/her sales team is pounding the pavement every day, networking, cold-calling, prospecting when pipelines are soft.  In certain industries, this is, in fact, the case.  In most hi-ticket item sales environments, however, it’s not.  In these environments, sales reps are usually best at navigating the complex sales process and closing deals; most are not prospecting animals, as much as you’d like them to be.

2)   Are you winning a high percentage of the few deals that do get into your pipeline?

If you’re winning a high percentage of the at-bats you do get, all indications are you already have a competent sales team.  Adding more competent sales people, and carving up territories, is only going to create discord and turnover among your existing, competent, sales team.

3)   What is the volume of and what are the response rates associated with the pipeline development programs you are running?

If you’re happy with the sheer volume of targeted marketing programs being run each month, but your response rates to these programs are low, chances are you’re either missing the mark with your messaging or the marketing programs themselves are not compelling enough.  You had better be nailing your buyer’s urgent need AND serving up a compelling offer.

The bottom line?  Hiring more sales people when sales are flat or declining can be the right answer in certain cases.  In more cases than not, however, marketing is the area that needs scrutiny and additional investment.  Ironically, marketing is the area that gets cut when declining sales put a squeeze on the budget.

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