Hiring a salesperson - need some tips and knowledge

[Rick Lee]

I've been in sales since '98 and at my current job since '01. I've done it all - cold calling, pounding the pavement, inside, outside, warm leads and now strictly account mgt. I could make at my current job what you're paying by pretending to work even more than I already pretend.

Your job sounds like it'd be a great part time gig for someone in my position, who already works from home, has health insurance and can structure his day however he wants. But no one who's any good is going to work for that kind of money, especially for such a tiny guarantee, when they have to also pay quarterly self-employment taxes, buy health insurance, supply all their own comms gear, transportation AND generate leads. The economy is bad, but it ain't that bad.

I was interested in Pelican's work-from-home sales gig a few years ago, but it was also considered full time, while only paying part time money. Can't do it. My dad, retired chem. engineer and salesman, could do something like that for extra money. But people who don't really need the money value their time a lot more than money. People who value money more than time need more of the former.

That said, I am in two HOAs between my two houses and their websites SUCK. Unfortunately, they are also run by idiots, so your good idea may end up being lost on stupid people in positions to buy.

[Rick Lee]

Originally Posted by kaisen

Manage the inputs more than the output

If he/she successfully performs the activities that will result in sales, then sales will come

This means more work for you

Funny you mention that. My company spent over $1 million on a two year deal for the macdaddy of sales methodology training for about 100 of us account managers. We're now at the end of the two years and they're trying to decided whether to re-up for the licensing and training of future employees. They have been militant in enforcing the sales methodology actvities - entering EVERYTHING into Salesforce, doing meetings prep sheets, using the correct jargon, even using the term "evangelizes about it" as a metric for our performance reviews. They track everything so religiously and we hear about it from sen. mgt. every week. They divided us all into "compliant" and "non-compliant" based on our documented activities per number of client meetings. The result? Wait for it.

The compliant AMs averaged 96% of goal and the non-compliant averaged 93%. So for a $1 million "investment" and countless hours of indoctrination and enforcement, the difference in performance between the compliant and non-compliant is within the margin of error.

Don't get hung up on sales process and methodology. A seasoned pro knows what he's doing and the right money will make sure he does it.

[kaisen]

Originally Posted by Rick Lee

Funny you mention that. My company spent over $1 million on a two year deal for the macdaddy of sales methodology training for about 100 of us account managers. We're now at the end of the two years and they're trying to decided whether to re-up for the licensing and training of future employees. They have been militant in enforcing the sales methodology actvities - entering EVERYTHING into Salesforce, doing meetings prep sheets, using the correct jargon, even using the term "evangelizes about it" as a metric for our performance reviews. They track everything so religiously and we hear about it from sen. mgt. every week. They divided us all into "compliant" and "non-compliant" based on our documented activities per number of client meetings. The result? Wait for it.

The compliant AMs averaged 96% of goal and the non-compliant averaged 93%. So for a $1 million "investment" and countless hours of indoctrination and enforcement, the difference in performance between the compliant and non-compliant is within the margin of error.

Don't get hung up on sales process and methodology. A seasoned pro knows what he's doing and the right money will make sure he does it.

You and I said the same things.

If you've got a natural (or seasoned) salesperson who can self-manage, they will keep their eye on the prize and realize that they need to sell some websites to make some money. And those guys like money.

But if you're not lucky enough (or pay well enough) to get "that guy", then be prepared to watch them closely.

Part of identifying a salesperson's disconnect is to see what part of the process they stumble on. So if you know that they're calling 100 businesses a day but only getting the decision-maker on the phone three times, you need to coach them through that.

You also need to know that!

If you only see that, "wow, they sold a website today!"..... but neglect to see that they contacted 100 potential clients to do so, then they may be saying all the wrong things to the other 99 potential clients, and making your company look bad.

You've got to know what a good job looks like, step-by-step.

Rick, micromanagement isn't what I'm advocating. Often, particularly with newer salespeople, they get frustrated by the rejection. If they can see, from you, that you know they need to make 100 calls, to talk to 40 decision-makers, to set 10 appointments, to have 7 keep them to make 7 pitches, that two will close that week and two more will close within a month's follow-up....then they won't get discouraged as easily when they make 59 calls without setting an appointment. If they can make the connection that (in this made-up stat) making 100 calls with good follow-up will lead to four sales within the month, they focus on making 100 calls today. And 100 tomorrow.

[Rick Lee]

100 calls a day when you're digging for your own leads is sure gonna be tough. It was no prob. when I was selling Yellow Pages ads and Verizon was supplying the business line phone numbers of non-advertisers. We called it "calling nons" and did it for the first two hours of every morning.

I would think there has to be a national association of HOAs and prop. mgt. cos. and plenty of state affiliates. Obviously, getting their membership lists would be the first step. Then you'd have to check out their sites and hunt down the decision maker (aka economic buyer). The irony is that the HOAs with the worst websites wouldn't have that info there or it'd be out of date. Which means you have to call to find the guy's name.

When I was doing new business, I just about never cold called out of the blue. I did my homework first and then sent a very well-crafted email. Sometimes I got them closed all on email. But the ones who didn't respond then gave me a hook to call and say I wanted to follow up on a note I had sent them a week ago.

My boss keeps asking me if I'd like to go back to doing new business, but they really churn and burn them at my company. I think only one out of thirty has really become a star and only a handful last more than a year.

[kaisen]

Originally Posted by Rick Lee

100 calls a day when you're digging for your own leads is sure gonna be tough.

I agree with the rest of your post.

I quoted this because Richard needs to know how many initial contacts it takes to result in a sale. Is it 10? 20? 50? 100?
Without this knowledge, managing a non-superstar salesperson will be frustrating.
Or, Richard will just keep burning through guys and the turnover will be frustrating.

[Rick Lee]

I just rode my bike home today from San Diego and was in LA last week, meeting with clients (and Ginger Lynn, Lemmy and Chris Squire). I had 10 meetings between last Wed. and today and it took me probably 50 emails and phone calls to set them up. Mind you, everyone I called were existing clients with considerable spend or contracts coming up for renewal and it was pretty tough getting 10 out of 50 to see me in person. Only one cancelled and I always bring a reserve list of folks I know I can drop in on with short notice if I need to fill down time, which wasn't necessary on this trip.

Obviously, doing new business is a different ballgame. One problem I run into a lot is that current clients have annual contracts with competitors for services we also offer, but they never knew about it when they became a client of my company. It happens all the time that they just renewed for a year with another provider, when I had no idea they used that service and they had no idea we offer it. So I'm locked out for another year. Now my calendar is full of notes several months in advance to call and try to discuss this service before they renew with someone else.

I would think a lot of website mgt. companies work on annual contracts, so even if someone were interested in switching to Motion's, they'd not be able to do so for several months.

[motion]

You guys have given me a lot to chew on and I really appreciate it. I am a bit confused as to why $48K-$60K a year is considered to be inadequate. Are people really making that much out there?

[Rick Lee]

$48-60k would be a great starting salary for a college grad in their first W2 job, who also gets health insurance, paid vacation, a 401k and a fully set up office. But those folks won't sell anything. People who go into sales are usually the A-type personalities who got tired of working for a capped salary and wanted to see some performance-based income.

Actually, I get called by Amex all the time for jobs that pay around that amount. I always tell them I would never have sent them my resume if they listed the pay range. And BTW, why do they think someone at mid-career level with my experience would work for that kind of money, when I work far less for far more, sitting at home in my shorts and riding my motorcycle to visit clients when I feel like it? They ask me why I am looking for a job and I reply, "Because I don't need to and that's the best time to be looking."

[imcarthur]

The other possible (as mentioned above) is an older rep who had been shuffled out or just looking to slow the pace of their life. I know the feeling well. I have been traveling since 1977 so a passive job has some appeal. But cold call burn out would slay me in a month or two.

And bear in mind that the guy will have expenses. Computer. High speed internet. Cell & charges. Fax/scanner. Phone & charges if you don't do an 800 for him. All tax deductible but not 100%.

Ian

[Don Plumley]

Originally Posted by motion

You guys have given me a lot to chew on and I really appreciate it. I am a bit confused as to why $48K-$60K a year is considered to be inadequate. Are people really making that much out there?

I don't think $48K is the issue - it's the amount of leverage. First sales person so you don't have a history of saying, "the last two guys were easily making $4K a month commissions with the $1K base." If it takes more than a few weeks to build a pipeline and then start closing, then someone is trying to live on $1K. On the flip-side, if you are that confident on the ability to sell, then pay a moderate base ($4K), and big upsides once you get over a baseline.

[Por_sha911]

I was in B2B telemarketing sales for 21 years (3 different companies and 10 years in the last one).
When I was looking for a company, I wanted one that had a vested interest in my success. Otherwise, I may end up with no support, change in the rules that hurt my sales, and let me drown in my own expenses. A new company is a bigger red flag since they want me to develope a system and client base for them at my expense.
I avoided 1099 jobs for the above reasons and looked for something that was salary plus. When a company says I can make $50-75k then surely they can pay $25k in non-refundable draw against commission. I have the proven track record that says I will do well if you don't stack the odds against me. If I do well, great. If not, dump me. If they can't pay a draw then they don't have much faith in the numbers they claim I can make...

[Rick Lee]

BTW, when I've had jobs with non-recoverable draws, I still got to earn commissions on top of the non-recoverable. After that ramp-up period, it was strictly draw against commission.

[Cajundaddy]

Originally Posted by Por_sha911

I was in B2B telemarketing sales for 21 years (3 different companies and 10 years in the last one).
When I was looking for a company, I wanted one that had a vested interest in my success. Otherwise, I may end up with no support, change in the rules that hurt my sales, and let me drown in my own expenses. A new company is a bigger red flag since they want me to develope a system and client base for them at my expense.
I avoided 1099 jobs for the above reasons and looked for something that was salary plus. When a company says I can make $50-75k then surely they can pay $25k in non-refundable draw against commission. I have the proven track record that says I will do well if you don't stack the odds against me. If I do well, great. If not, dump me. If they can't pay a draw then they don't have much faith in the numbers they claim I can make...

+1
The first guy is going to be writing his own sales manual as he goes in addition to selling the product and it will take some time to nail down a system that works well. $1k base means he doesn't eat until he gets good at it. This looks like 100% cold calls at first with possible referrals down the road. Limited repeat business so no long term relationships or reorders.

I managed a sales force for 20 years and they gotta know that it's a team and you will do what it takes to help them be successful. A salesperson has got to want it. It's all about selecting good people and keeping them focused and motivated to succeed. The inner warmth that comes from knowing they are making lots of money for you won't make it happen.

[9dreizig]

you've got some good advice here.. I'll give you some more..
whatever deal you make ,, make sure you pay your salesperson on an open ended deal.. So the more they sell the more they make.. no limit,, you don't have one as you make more money the more they sell.
I've seen more good salespeople leave because of corp greed and envy.. Salespeople earn what they make and what makes them successful is a mystery to a lot of people (hence the envy)...

[Rick Lee]

Truth be told, I'd work a LOT harder if I knew I'd get paid more for it. When I had sales jobs where I knew exactly what I was getting out of each sale, I was seriously driven. In my current job, since I manage about 350 accounts, I have no idea what they spend on each job they send in unless they prepay for an annual contract in a given month. I have no way of tracking what my clients have been invoiced each day or week of the month. I know I'm responsible for $100-150k per month, but no idea what has come in or billed in which month. When I get my commission file, it's like a scratch off lottery ticket. And since we get paid according to percentage of goal and the goals only ever go up each year, it's actually better financially to finish just barely under 100% for the year. Because whatever my 2012 revenue is will be used to determine my 2013 goal. When you blow out one year, you have no chance of coming close the next year. When your incentive plan is an incentive to fudge numbers and play the system, that's bad.