If you have ever hired a salesperson that did not work out, you know how painful and expensive it can be. Over the past six years, we have helped many SMBs (small and medium sized businesses) hire new sales talent either due to turnover or adding new positions to build on untapped growth opportunities. Many of these organizations do not have a good baseline for what should be expected from a new hire. Before working with us, below is a typical hiring cadence (that may or may not work) and happens more than it should.
- The owner or manager of an organization decides they need a new salesperson or team to grow the business. They hire from referrals, use recruiters, Indeed or LinkedIn.
- During the hiring process, they build a lucrative compensation plan that will get them to their goal and would provide ample incentive for the new salesperson(s).
- After they go through the hiring process (subject for another BLOG topic) they hire salespeople they are typically excited about.
- The honeymoon. The salesperson starts the job with elevated expectations, excited about the income opportunity.
- For obvious reasons and rightly so, their comp plans that will get them to their income goals are heavily dependent on sales commissions for future sales. They can get by on their base salary, but really took the job based on the OTE (on target earnings) potential.
- Salesperson gets some initial training on the product or service is being sold and is turned loose after about a week or two. On their own. GO! The race is on.
Given this seemingly logical process, the odds are typically 50%/50% that the candidate will be successful. Not because the candidate was a bad choice, but because realistic expectations were not put in place for all stakeholders to use as a roadmap.
If we add a few best practices to the process above, we can make a huge difference in the outcomes and change those 50/50 odds.
- Define the sales cycle. How long from first contact with a prospect to close a deal?
- Have a pre-defined prospect profile, and LIST – who are the 100 prospects (or whatever number that looks like in your world) that you would like the salesperson to attempt to contact?
- To get a discovery conversation to qualify a prospect, how many calls, emails, visits, etc. will it take for them to make contact?
- Once the prospect has been contacted, how many would qualify? What are the attributes of a qualified lead?
- Based on the time spent on prospecting, how many leads do we believe they could generate, realistically?
- What is the ramp-up and training time for the salesperson before they are at 100% on prospecting activity? 1 week? 1 month? 2 months?
- What is the average deal size? What is the typical revenue steam for each client – one time invoice, repeatable revenue based on a contract? Is there upsell potential and what might be the lifetime value of a client?
- When are sale counted as “sold”? Upon contact signature, delivery of a product or service?
- Based on the actual sale, when will commissions be paid? When can the salesperson expect their first commission or bonus?
After defining al the items above, build the realistic timeline of what the first 90 – 120 days should look like. This will give you a baseline as a business owner, company CEO or president, or sales leader to answer performance questions regarding new salespeople. All stakeholders should have a clear expectation of results and timing associated.