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For most entrepreneurs, the first sales representative is their most risky hiring, especially if it is bad. According to SalesPeak Recruiting, the cost of a bad rental can exceed $ 500,000.
Related: Hiring Checklist: The Best Qualities To Make A Winning Sales Team
It came back to me recently during a meeting I had with a business owner from my Vistage group. Her name is Marla, and she knew she had to hire a sales representative to grow her business.
His decision to hire his first sales representative was a good one. However, the hiring process that Marla was following was clearly flawed. She had interviewed a candidate known to a few people she knew and she was ready to make him an offer. This was his process, if you can call it one!
I started having flashbacks when I was running my own business and I had my own lack of process to hire my first sales representative. My process had been as flawed as Marla’s and had in fact led to several bad hires, costing the company time and a lot of money.
So, to keep Marla from repeating my mistakes, I started asking her questions, many of which have yet to arise; and, as I expected, she didn’t have the answers. At the end of our conversation, she said that she realized that before she went ahead, she still had a lot of work to do.
Here are the seven steps that I recommended and that I recommend to you to reduce the risks of hiring your first sales representative.
1. Define what you want your first salesperson to do.
Develop a job description. To do this, analyze what you are currently doing in sales and what you need or want to offload. In Marla’s case, she needed a “hunter”, that is, someone who could go out and find new customers, not develop existing customers. She and her team had already managed to increase the existing accounts; they needed more customers. She also identified certain tasks that she would be willing to keep for herself, such as writing proposals.
2. Decide how quickly you need this sales representative to become productive.
I know the answer seems obvious: quickly! But this question will make you think about what the new recruit should bring to your business from day one. What qualities of “first day” will accelerate the productivity of the representative? Once Marla began to think about this question, she was able to list several criteria, including the current “potential buyer” relationships for her company’s advisory services.
Related: 5 Hiring Tips for Growing Companies
3. Define what “productivity” means to you.
“This [the definition of productivity] is your recipe for successful sales. It takes into account the mix and amount of behaviors, “said Mark McGraw, president of Sales Engine in Atlanta. So develop advanced indicators, such as networking meetings, requests for referrals, first conversations, and first meetings. Next, determine the quantity and time required for each of these activities.
4. Develop a list of behaviors to avoid.
This should be a list of behavioral questions that will uncover the behaviors that generally lead to failure. They can include lack of urgency and lack of organization. The negatives on your list can also describe a representative who is not motivated by money and who is someone with a negative attitude and a bad work ethic.
5. Ask your best candidates for a presentation.
Once you have narrowed your candidates down to two or three, they should have enough information to prepare a 30/60/90 day plan on how, if hired, they will approach the new position. I recommend doing this for all sales representative positions, even if these candidates are new to sales. Find out how their presentations match the productivity recipe you’ve already developed and understand the differences. These presentations may present some good ideas that have not crossed your mind.
6. Evaluate your best candidates with a tool specific to the commercial function.
There are a number of these tools, but the one I have often seen is the CPQ sales assessment. This tool is ideal for evaluating not only direct sales representatives, but also candidates for indirect sales and customer support.
7. Make sure you have the right compensation plan and don’t complicate the plan.
McGraw also recommends that business owners determine the total compensation for the sales representative. Then, depending on the length of the sales cycle, the owner must determine the distribution between base salary and variable compensation (commissions and bonuses). The general rule is that the shorter the sales cycle, the lower the percentage of base salary compared to total compensation. As the sales cycle lengthens, the percentage of base salary increases.
Related: it works for sales. How to configure a funnel for hiring.
Have you already passed the stage of hiring your “first” sales representative? Try to apply these steps to each new sales representative you decide to integrate into your business.