For many businesses, finding the right sales staff is one of the most difficult aspects of building a successful sales team, they just don’t know how to hire great salespeople. In my travels as a sales motivational speaker, the refrain, “If only I could find the right people for my business” is common. It seems that even with years of experience and huge business success, many sales directors and business owners feel that locating, assessing and hiring top salespeople is a difficult task. Indeed, it has more than once been described to me as similar to pinning the tail on the proverbial donkey and, with a few notable exceptions, hiring becomes a lottery.
Whilst statistics are hard to come by because of the wide variety of “sales” jobs, the anecdotal evidence suggests that bad hires are rife, average hires are the norm and that the tenure of an average hire is not long enough. Does it have to be this way? Does hiring salespeople have to be akin to a stab in the dark? Do some people break this mold and have strategies that get better results.
One man I know who may have answers to these questions is sales hiring expert Alan Fendrich. Sixteen years ago Alan created a company that required that the hiring of 300 telephone salespeople a year. When he sold the company seven years later those salespeople had generated more than 60,000 individual sales a year worth $84,000,000.
Because he had to hire large number of salespeople to grow the company, he needed to create a sales hiring system… so he and I had a bit of a chat about hiring great sales talent…
Alan, many people struggle with hiring the right salespeople for their businesses, why is this?
People tend to do what everybody else is doing to hire salespeople. Unfortunately the strategy dates back to the 1900’s. Too, people learn by experience. Yet, the average manager has very little experience hiring salespeople. The average sales manager hires 10-20 salespeople in a career. As a result they have very little opportunity to really improve their performance.
I hadn’t thought about the lack of experience of the average sales manager, that’s a great point. They’re certainly nowhere near the 10,000 hours required to be an expert at something. I think we can agree that recruiting great salespeople is not easy! What do you think makes it so difficult?
Two factors make hiring salespeople difficult. Firstly, managers wait until they are down a salesperson to start looking for sales talent.
Florida State is ranked as the top American college football team. They are ranked #3 in their recruitment program. Alabama’s team is ranked #1 and their recruitment program is ranked #7. This statistic is repeated through all the top 20 ranked teams. There is a positive correlation between constant recruitment of talent and performance on the field.
Recruitment is an ongoing 12 month a year process for a sport that is played for 3 months a year. Yet, sales recruitment is done on an as needed, generally under pressure process. That is reason number one.
Second factor, is lack of clarity on how to identify the best applicants. Without question, most managers hire salespeople by sorting resumes (or LinkedIn profiles). They look for previous sales experience or, better yet, previous industry sales experience. Yet, it is a fact of life that only one-third of salespeople are real performers. So experience is a poor predictor, yet it is manager’s primary criteria.
I get that. Experience is not the only factor in hiring. If it were, it would be easy, wouldn’t it? Great CV = great hire! We wouldn’t have to even interview them!! But it doesn’t work that way. In my experience, the only one thing that “experienced” salespeople CAN do consistently is sell themselves! So thinking back to some of the frustrated managers who ask me if I can help, what are the most common mistakes that people make when hiring?
The lack of an ongoing sales recruitment effort to constantly look for new talent is a huge mistake. And then, looking at resumes as an effective sorting mechanism for choosing which candidates to interview are the two biggest mistakes. Both of these can be easily fixed by creating a scientific sales hiring system.
Creating a sales hiring system actually reduces the time it takes to hire. By setting up systems that are automatic you find better salespeople since your company develops a reputation as the kind of place where good salespeople can be respected and rewarded for their talent.
That’s a great point and similar to one I often making about sales prospecting. If you only do it when you have to then you are going to be approaching it from completely the wrong mindset… one of desperation. You are going to feel that you have to accept things that you would not accept if you were not so desperate. Doing things consistently and making it part of your habitual activities not only improves your skills in a specific area but also improves your mindset and your approach.
So, like many things about sales and selling, this all makes sense Alan. I don’t think anyone is going to be screaming at their keyboards about the points you are making so why do you think that these mistakes are so common?
I think it’s just a matter of “this is what everybody does.” My father in law was a great sales guy and had been a successful entrepreneur. When he walked into our offices in 1993 his first question was, “What are all those computers doing on everybody’s desk?” My father in law saw computers as “electronic filing cabinets” and thought it was better to have clerical people typing letters. Of course, the tremendous increase in efficiency we achieved with computerizing the office is now obvious.
Trying to hire salespeople by flipping through resumes and then deciding “how well they handled themselves in the interview” is an old strategy. It probably didn’t work well in the past either, but the economy was less competitive and sales costs were lower.
Agreed. Things change and faster today than ever. If you fail to change and adapt you are not only going to be left behind, you are going to fail. I know what I see but what do you see as the consequences of failing to change and continuing to make these hiring mistakes?
Lower sales revenue, annoyed prospects and missed sales opportunities to start. Then, there’s a sales department environment where a “dying fish” is floating around. Higher unemployment insurance rates). And management wastes time having to hire again.
Sounds like the kind of things people say but do you have any stats to support the cost of making wrong hires for businesses?
Of course, it depends on the industry. One of our new clients is a large broadcasting company that, at this point, is down 21 sales positions. Let’s say the average unfilled sales position costs them $50,000 a month in revenue – not having a sales hiring system in place is costing them $1 million a month.
Take the average revenue per seller, add the cost of maintaining the seller, add the cost of training and that’s your number. In most cases it is never less than $20,000 per bad hire.
We are both in agreement that finding the right people is critical for the success of your business and failing to find them is seriously bad news but what would you say to people who think that hiring is a numbers game? Particularly, when recruiting salespeople…
I think they’re partially right, but perhaps not the way they think. If by a numbers game, they think you’ve just got to be willing to hire and fire until you find the superstar, that’s a very expensive, painful process. Most run out of energy and end up settling for mediocrity using this strategy.
When I think of hiring as a numbers game I think it means carefully recruiting 20 applicants — that means using adverts – both the ad itself and the placement of that ad in a scientific way. Then profiling those applicants for values (what gets them out of bed in the morning.) Those who pass that profile are then profiled for personality style, which will lead to having 3 applicants who are all interviewed using a scripted, psychologically designed script. Finally you hire the one applicant who passes the interview stage after checking references.
So in a way it is a numbers game, but most managers when they say numbers game cause themselves too much pain. Keep the bad sales hires off your team by creating a better system to recruit salespeople.
I agree. You need a haystack if you’re going to find the needle but you don’t want to have to test every straw, so you need a system to focus in on finding the needle. So, how do people avoid making mistakes when hiring?
By developing a Sales Hiring System and really turning the challenge of hiring salespeople into a manageable process.
And I know that you have one Alan and I know everybody has questions for you, so here is one from me, “What are your top tips for hiring sales superstars?”
- Create a sales hiring system within your organization.
- Stop selecting by resumes.
- Marketing your position correctly…
a. Write ads that talk to top performing salespeople,
b. Put your ads in the place where the best applicants can be found.
- Profiling your applicants…
a. For what they are motivated by.
b. For their personality style.
- Interviewing applicants who pass the profiles with a psychologically-designed, scripted interview.
- Conducting a reference checking strategy that gets more than just surface information.
Fabulous. So, let’s assume, that people put the right processes in place and hire the right salespeople. Many also have an issue with losing great salespeople. How can you keep them happy once they’re on board?
That is where you come in, Gavin. Companies need to create an appropriate, congruent compensation strategy, together with creating a sales environment within the organization.
I wasn’t fishing for that Alan but you are, of course, right! Creating the right environment is critical. Salespeople today want training and personal development and to retain them and keep them happy, you have to deliver on this or you will lose them to a company who does.
Finally, thank you for taking the time to share these strategies with us.
If you’ve enjoyed what Alan has to say and you want a free trial of the only sales hiring system that I recommend then you can get a free trial here. There is no cost, no risk and no obligation so take 10 minutes and actually answer the same questions that you will provide to your candidates and applicants to see how accurately his system pinpoints someone’s ability to sell. I did it and found it very useful.
If you like it and think it will save you time and money, then use it. If not, then you may well have learnt something about how to hire more effectively in just 10 minutes. And, once you’ve done that, do share your thoughts and opinions below.