Hunter and Farmer sales model

By Subraya Mallya - January 2010 | Topics - Cloud Computing

A sales model typically used in Software-as-a-Service businesses to structure the sales organizations. In this model, the sales force is divided into two groups,  Hunters, who charter is to find and bring new customers and Farmers, whose responsibility it is to build relationships, nurture them and identify opportunities to upsell into those customers.

This has been one of the big learning curves for sales teams across the world as the technology (most software) world transitions from  a perpetual license model to a subscription based model.

Sales executives in the past have lived on their Rolodex and prided their relationship skills. Keeping close relationships with customers during the sales and off-sales cycle and drumming that into sales has been the prevailing model. Now the sales have predominantly changed to land-and-expand model. So Hunters are expected to close as many deals as possible to increase the number of customers and the Farmers (typically account management) is entrusted with the responsibility of delivering on the initial promise, identifying upsell/cross sell opportunities and grow the business on those accounts.

One of the key drivers for wider adoption of this model is the tenet that in Software-as-a-Service business the Cost of Sales must be kept to a minimum as companies with large capital investment upfront strive for profitability. Also coupled with that is the fact that the subscription licenses size is smaller upfront (typically 1yr or 3yrs) makes it an imperative that the initial sale is done at minimum cost.

Characteristics of Hunters

  • Responsible for killing fresh meat and bringing it back to the tribe – translating to closing lots of new deals
  • Work on prospects already made warm by inbound marketing.
  • Identify the right prospect and pursue them  and not waste time on large prospect where the sales cycle might be long.
  • Once the right prospect is identified, engage with them, determine their appetite for  buying and close the deal fast. Velocity is the key.
  • Once the sale is closed, get them on-boarded onto the service.
  • Move onto the next deal.

Once the hunter has closed the initial business, then farmer takes over. The skills needed for farmers are vastly different from the hunters.

Characteristic of Farmers

  • Understanding the business of the customer better and identify opportunities to broaden the adoption of the solution across the organization.
  • More consultative in nature and have deeper understanding their product capabilities and have the ability to define the customer problem and identify the solutions to them.
  • Identify and define intermediate ROI milestones and continuously demonstrate the value of the solution and the ROI customer has generated.
  • Work with customers to identify adjacent use cases to broaden the solution footprint, identify competition encroaching in the space.
  • Maintain excellent relationship with customers, generate references and be the go-to person while additional needs arise.

Besides the change in charter in the sales organization, the Hunters and Farmers model also introduces challenges around Sales compensation. The Hunters get compensated by not just the initial sales but some component from future business generated out of each account. While there are some standards each company adopts different compensation models.

 

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