I hired my first commission-only sales team some thirty-odd years ago with the misguided belief that it would be easy. After all, I had managed several corporate sales teams and in spite of having to deal with a few prima donnas, lazy reps and the occasional very dubious character, I had fared pretty well.
What I didn’t take into consideration was that there is a world of difference between a team of professional salespeople earning decent salaries and bonuses, and the commission-only variety. So, there I was running a company selling greeting cards and in dire need of a sales team, but with no money to pay them. Sound familiar? I asked several of my customers to give me the names of freelance reps that they thought did a good job and ended up with a list of 15 names.
Several weeks and multiple interviews later I had a sales force, numbering 10 good people of sound body and mind. True they weren’t all mine, they carried several other companies’ products, but they would soon realize that my line was superior – wouldn’t they? To cut a long story short, the results were disappointing: some of my team sold a little here and there, a few I never heard from again, and one of them turned out to be a cardboard cut-out (just joking).
A few months after I cut the ties with the last of my mind-numbingly poor sales team, I was at a trade show and wandered onto the booth of a well-established competitor who was known to have a great commission-only sales team. I thought, what the heck, and asked him to share the secret of his success with me. He looked sagely down at me (he was a very tall man) and said, “Sure, it’s really quite simple.”
What I was about to hear, I was sure, would pay for the cost of the show ten-fold. “It’s like this” he said, “You hire 10 sales reps, and after a year you fire nine of them, and hire nine more. After another year you fire eight, keep the best one and hire eight more. You keep doing this and you’ll have a team as good as the one I have; of course, then the rep that’s been with you for 10-years is ready to retire!”
So, what is the most important thing I’ve learned about hiring sales people? It ain’t easy! I can’t guarantee that the following tips will provide you with the perfect sales person, if such a beast exists, but it will increase the odds that you get someone that will help rather than hinder your business.
- Great salespeople are rare. Unfortunately this is all too true. Most salespeople underachieve; the majority just get by, and the shining stars are few and far between.
- If you own your company, you are without doubt its best salesperson. The bottom line is that your passion and belief in your product and service is second to none, so don’t expect anyone to sell as well as you do. Ask yourself why you are hiring a salesperson. Should you be considering hiring someone to help you with your other responsibilities so that they free you up to do the important job of selling?
- Think long and hard about what type of salesperson you are looking for, and what you can afford. Are you looking for someone to cold call, tele-sell, or build customer relations; are you looking for an inside or outside sales person? All this will influence the type of person you are looking for.
- How are you going to pay this person? There are several options: salary only, base salary plus commission, commission only with an advance, or straight commission. What’s best? Well, it all depends. The best and worst salespeople are commission only. I know this sounds contradictory, but the fact is that if you aren’t very good, then someone will always be willing to pay you purely on results, as they have nothing to lose –except all the time they have invested in you! The very best salespeople choose to be on commission as they can earn more that way – if they are taking all the risk, then their commission rate will be higher. Unless you know a star salesperson, it’s probably wise to avoid hiring on a commission-only basis. The biggest problem is that if you aren’t paying them a salary, you aren’t employing them, so you have less control over when and how hard they work. So, try to budget for a base salary with a commission percentage that, with hard work, lets the person earn a good income. Don’t be cheap, but do tie performance to income.
- Don’t be afraid to pay a good salesperson a lot of money. I remember a three-month period in 1979, working on a base, plus commission for a multi-national publishing house, when I earned more than my managing director. He asked me to travel over 300 kilometres so that he could take me for lunch and congratulate me. He was fine with me earning more than him, especially as it was only for a few months! Far more recently, in a similar situation, I had a boss that couldn’t live with the fact that he was paying me so much and let me go. That was a dumb decision – never be concerned about paying salespeople the big bucks if they are meeting and exceeding their targets.
- The only really good salespeople are those that love, not like, to sell. My mother used to say “don’t try to make a silk purse out of a sow’s ear” – this wonderfully bizarre saying pretty much sums up the mistake many business owners make when hiring someone who really isn’t a true sales professional. At the end of the day, you either have to hire a proven salesperson, or someone who actually loves to go out and meet people and sell to them. People in the latter category do exist; they may need some training, but they are out there.
- Just hiring someone and leaving them to it is a recipe for disaster. Unless you find someone who lives for selling then you are going to have to monitor his or her every move. There are 101 things to do that are easier than selling, such as checking email, planning the next sale, cleaning up the sales database, writing letters, designing promotional literature – the list goes on. Create a reporting structure (use customer relationship management (CRM) software) that allows you to see how many calls they have made weekly and what their closing rate is. Meet with them at least once a week and review their progress.
- Provide extensive training in both the products and services you expect them to sell and in the art and science of selling. I once got a new job as a sales rep when I was in my twenties and on my first day at head office (200 miles south of my territory) I asked my sales manager what training I would be given. His reply, pointing his finger was, “North is in that direction” as he handed me the customer files.
- Put all new hires on a 4-6-month probation period. Without question, it will take you several tries to find someone who can actually sell at the level you need them to.
- If, and when, you discover a true star; someone who has your passion and belief in your company, consider giving them a share of the company, or profit-share with them – get them invested in your future by making them part of it.