Hiring a salesperson - need some tips and knowledge
 

Starting to seriously consider hiring a 1099-style salesperson for my property management software company. I've never hired an employee before, so am a bit out of touch. I know I want to go the 1099 route, since the person will work remotely and be in control of their hours, and provide their own computer, phone, etc.

I guess my biggest question involves compensation. I'm willing to pay a small base, say $1,000 per month, and a nice commission package, of course. I think $100 commission per day is doable. So, this would insinuate a monthly range of $3,000 - $5,000. I understand that this won't buy me a hotshot from LA, SF, NY, etc, but do you experienced salespeople think I can find a reliable someone with adequate sales experience for this compensation range?

Also, where would be a good place to find someone. Assuming Craigslist and Indeed.com?

Any help is mucho appreciado :)

Sorry, I don't have time to expand much, but I think you need to structure it as a guarantee (draw against commissions) in at least the $2000-3000 range unless your product is proven in the marketplace.

Even then I don't think you'll get any kind of self-motivated skilled/disciplined salesperson that will work out how you'd hoped in the "maybe-you'll-make" $36,000 to $60,000 total compensation range -- esp when they have to cover all of their costs as a 1099 employee.

Tell us more about your product, how it will be marketed, and what you think they will be doing (or what you're expecting them to do) in their sales process.....

So $12k per month base and a max of $60k in commission? Total compensation potential of $72k.

How many hours are you expecting? Is this outside sales, online sales? Need a little more detail.

FWIW, I am in b2b sales for document shredding, I have another close friend selling for Cleveland Golf and another district sales manager for Polaris.

We are all 24-25, did rotational programs before moving into sales. Maxing out your comp plan would net me less $$ then average performance in my current role. Same with my friends. I'm not sure if the roles are really directly comparable.

If this is more inside, cold call sales, your numbers are more inline with what we are paying.

Key point. As a salesman, I have heard a lot of promises from business owners that didn't materialize as cash in my wallet.

Ian

Thanks for the responses so far. The salesperson would be selling my property management website subscriptions: Pointwide Property Management Website Templates

I've been offering these for 6 1/2 years and have never had a sales effort. I do have a very modest Google Adwords budget, which is my only form of marketing. My client base has grown over the years, so it is a proven product, and the potential market is huge - most property management companies currently have very poor websites.

I would not provide leads, but getting them is very easy. All one has to do is do a few simple google searches, and click on property management websites. 80% of them are junky, home-built sites, so they are prime candidates for a sales approach. The contact info is right there on the website.

It seems like shooting fish in a barrel to me, and honestly, I don't see why someone couldn't sell a couple a day, once the pipeline gets filled up a bit.

Am I missing anything?

I think you meant $1K per month base?

I would expect 35-40 hours a month. 100% inside sales.

Very nice site. I could sell that. Maybe in a couple of years when I finally overload on travel? ;)

$1K + 800 land line + commission.

Ian

This sounds more like a part time job...

I could put in 35-40 a month just while I'm driving to do the job I do now...

Nice site though, and for what you are describing the pay sounds in line if not pretty good...

35-40 hours a week, sorry. Full time job. I'm not a big fan of salespeople repping multiple lines concurrently.

Feedback from people currently in sales is really invaluable! Thanks.

Ok that makes more sense... I was like yikes, whats this person supposed to do with the other 3 weeks a month?

The tough part is: Cold calling sucks. I have done my share over the years but I have to be in the right frame of mind. I would not like a steady diet of it but that IS the nature of your business, obviously. Finding the person that can do it consistently may not be easy.

Ian

we hire many sales people - good ones have one thing in common, all likable.

I must get a dozen of them a week. I normally hear them out unless I'm really busy. What a way to make a living. For myself, I hate selling.
Jim

I employ 1099's in sales posititions and one would think it is easy to find a highly motivated sales type personalities needing work. Wrong! Getting a 1099 to do the job like you would do it might be a tall task. I just interviewed a charasmatic 33 YO who could not complete a SIMPLE math test during our interview. Questions like: What is decimal equivalent of 1/4? What is area of a 4' x 4' square?

Have a list of common sense questions ready or your candidates that pertain to the tasks.

Wow! Two of you?? You should get together for drinks

I would agree except I know too many successful (insert euphemism for: orifice in the posterior) salesmen. But us nice guys have more fun. :D

Ian

You need to find someone who is older. Apparently more desk time than windshield time? Either young, get them cheap, but when they get some time under their belt they are gone. Stay away from middle age married, 2 to 3 young kids, to preoccupied, and you don't pay enough. May want to put an ad on Monster or Flip dog . Been in outside sales since 89.

I've spent my career hiring sales people. Frankly my success rate is about 50%. Sales people are challenging to hire because when you interview, they are selling their favorite product.

The adage "you get what you pay for" is highly correlated with sales people. Good sales folks know their value and can get it. Bad sales folks can get hired anywhere with a good story.

The 1099 route isn't hard if you let them structure their time and have the right kind of agreement. Will you provide leads? How will you structure goals/metrics? I'm nervous about $1K base comp - that's really skinny. "Mom, be quiet, I'm on the telephone selling for PointWide"

Once you do hire, set a clear set of goals for week 1, week 2, etc. and have reviews. Sales is a numbers game, you have to fill the wide part of the funnel and keep it filled. Set a three month trial period where it is up out.

Maybe worth a chat...

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

If you're not able to take that on, you'd better be prepared to pay up and get someone who is self-motivated and self-managing. $46-72K isn't likely to get that done. At least statistically.

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.

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.

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.

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.

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.

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?

$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."

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

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.

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...

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.

+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.

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)...

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.