If I took a poll of small business owners of whom they felt were their most difficult employees in relation to hiring, managing and performance, an over sounding majority would say, salespeople. Having been a salesperson in my earlier career and managed salespeople, I will agree, we are not the easiest group to manage due to personalities and traits that tend to run throughout. On the other hand, we are that necessary evil within your business that can make or break a business. By the end of this article, hopefully, those business owners that feel this way will have a different opinion.
Something else to keep in mind is that a majority of salespeople who have worked for business owners that have this opinion have interesting stories to tell about their tenure in a small business. Many business owners believe that because they hire a sales rep this will solve all the issues in their business and they should hit the ground running. Many are not provided training on the business or given time to get up to speed on the products or services being sold. Many are not managed by someone within the business and given direction. Another thing that is common is that they are not provided with a contract, quotas, and key performance indicators. The ones that are given quotas are provided with unrealistic quotas that were not met before the arrival of the rep by anyone else in the business.
The Importance of Sales Personnel to a Business
Sales personnel are one of the greatest assets to a business as they are responsible for bringing in revenue which keeps the lights on in a business, pays other employees, and funds the business. With that being said, it is important that you hire the best you can find and make sure they are trained, managed and treated with respect within the business, as replacing sales personnel can be expensive.
Hiring Sales Personnel for Your Small Business
Since these individuals are your greatest asset, finding and hiring the right people is going to be key. You need to develop a job description that outlines realistic expectations of skills, objectives, and provide an understanding of salary and commission. Paying a base salary that is peanuts for a salesperson will get you a monkey. If in Ontario, it is now a requirement that they earn minimum wage. If you let them go and they have not earned at least minimum wage, (even if they sold nothing) you will be paying this on their exit.
If you are not experienced in hiring salespeople, hire an outside firm to help you find the appropriate candidates for your business. Use professional sites to list your opening such as LinkedIn, Monster, and Indeed. Do not post a job for a sales professional on Kijiji or a job board.
Once you have found the right candidates, it is well worth the money to invest in someone either inside or a recruitment firm to do a background check, check references and provide them with a sales aptitude test. Having this completed will provide you with the best candidates. Salespeople are good talkers, and most make a great first impression, so it is important that you be prepared to interview them properly to find out if they will fit in your organization and if they have the skills outlined on their resume. If you are not comfortable doing this, enlist outside help. It is important also to look for salespeople that have sold similar products or services. Just because someone sold cars last week does not mean he or she can sell industrial products this week. They may, but there may be more of a requirement on you for additional training. You need to hire someone who is comfortable dealing with your target customer. For example, high tech or industrial salespersons usually have some level of technical knowledge in the industries they have sold. Very different than someone selling retail commodity products.
Once you have found your top candidates (2-3), you will want background and reference checks performed and have sales aptitude tests performed to ensure the best hires. For the individuals that you send an offer, you should have an employment contract that includes points related to the position including quota, salary, commission, bonuses and key performance indicators that are going to be measured. Contracts should be vetted by a corporate lawyer or paralegal who has experience with employment and sales contracts.
On boarding and Managing Sales Personnel
Before hiring a salesperson, it is important that it has been decided who will manage them. Managing salespeople is different from other employees as they are generating the revenue for your business. You need to have someone who can take the time early on to make sure the individual(s) are trained on your products and services as well as how the business functions. You also need to make sure they have the proper tools to track and manage leads and have a defined sales process already in place.
Salespeople should be providing your forecasts and progress reports on a weekly basis and informing the sales manager (usually the owner) of their progress and where leads are in the sales process. Salespeople should be treated and feel a part of your team, as they are one of the essential assets to the success of your business. They should understand the company vision and mission and know what goals and objectives you have set for the business since you are relying on them to meet most of them.
You also want to make sure that if you have multiple sales reps that you ensure equal and protected territories, You do not want to cause conflict between your sales reps fighting over the same business. That will frustrate them and is a waste of their time and hurts your business as well.
As with any employee, you should be performing regular performance reviews. It is important for them to get positive and constructive feedback as well as them having the ability to tell the owner or sales manager what issues they are facing. As with any employee, if there are issues that you are having with the salesperson, they must be documented, and there must be a corrective plan of action. Just getting rid of someone because they are not selling is not good enough. You need to make sure that you did your part as well and provided help. Too many times, we have seen businesses who are not truly ready to hire sales personnel. They do not have the proper processes or training in place or have people with the time to manage.
We have seen too many times where we have been brought in to a business to deal with sales personnel employee issues to find out that due diligence was not performed before hiring. They then were brought in, were given a desk and a phone, ignored, and then there was confusion about why they were not performing.
I am not sure how many times a month I hear a client or prospect tell me they hate sales people, they do not trust them, and they do not want to hire them. This is usually after a discussion on how you plan to get your sales increased and how as the business owner, you cannot be the sales person, the marketing person, and the chief bottle washer in the firm. When investigating why they feel this way there are usually similar answers to the questions asked.
How Did You Find and Hire the Sales Person?In too many cases I hear I found them on Kijiji or this person was the son of a friend of mine and they used to sell something. Ask yourself if you think this is a good standard. A sales person represents your business to your prospects and customers who are key to the success of your business. Does it make sense that you would not hire someone with the necessary skills and experience to represent your business in a professional manner?
Hiring a salesperson is similar to how you should hire all personnel, but with a little extra due diligence. You need to develop a job description that includes the requirements and expectations for the position, the qualifications for the jobs, and the soft skills that you believe are necessary to fit into your business. If you do not understand what this should require, get help in developing a professional job description.
Do not list the job on Kijiji or hire the son of a friend who sold something once. Sales is a profession just as marketing and finance. You cannot make just anyone into a sales person. Use professional job boards such as LinkedIn or hire a recruitment firm that specializes in hiring sales personnel. In many cases, some firms specialize in particular industries. Because someone was a top tier salesperson selling cars does not mean that that individual will be successful selling technical equipment. Sales is not sales – it is industry specific, and the sales process and sales cycle is most likely completely different.
It is also important to understand that the skills differ for direct sales people and those that sell through channels. If you are hiring a direct sales person to run your channels, you may find your salesperson is trying to sell for your channels. If you hire a channel sales rep who is more relationship focused to do direct sales, this could be a skills mismatch. Understand the type of sales person and the skills you need to perform the job.
Once you decide to interview candidates, make sure that you have an understanding of the type of interview questions you need to ask and you do the proper background and reference checking. If you are not sure how to do this, get help from the outside. There is even testing you can have sales people take which can help you for a small fee and is offered by many recruitment firms. They also can help you take care of the interviewing and background and reference checking.
Sales people are good talkers, and we all want them and need to be, but it is important if you feel you are not able to see through the “talk,” be sure to get some help with the interview process.
Before you bring a salesperson on board, you need to have an employment contract reviewed by a lawyer that outlines expectations, probationary periods, confidentiality clauses, quotas, pay & commission structures, and any additional job requirements.
How Did You Train the Sales Person?I do not know how many times that I have heard it said, “They came in and did nothing and didn’t sell anything.” I then ask, what kind of training did you provide. In many cases they say, none, as they were an experienced salesperson when I hired them.
Someone can be good at selling and understand the requirements for sales in general, but they do not know or understand your products, services, and company. The ownership of training of sales personnel or any staff for that matter about your business and products and services is up to you. The sales process for your products and services may be different from the last ones that they sold, so it is important that you explain how this works in your business.
If you are hiring someone that is out of school that has not worked as a sales person, then it is your responsibility to train them in sales skills as well. You cannot expect someone who has never performed in a sales role to hit the ground running.
How Did You Manage the Sales Person?Did you make a mistake before of thinking that once you hired the sales person, they would work on their own and would be ready to go out and do their job? Sales people are employees like any other employee you hire, and they need to be managed, but this management is a lot different than other types of employees.
Sales personnel are goal based reward-driven people. They should not have to apologize for this as this is what sets good salespeople apart from low performers. You need to set KPIs (key performance indicators) which are realistic and obtainable for your business, and you or the manager of the sales personnel need to track and monitor performance.
As a manager of sales personnel, you need to provide them with the tools to track their contacts, prospects, opportunities and other key performance indicators that you are measuring. This can be a CRM (Customer Relationship Management System) or could even be Excel Workbooks. There is no excuse for any business not having a CRM today, as there are several that offer free options for small businesses which include HubSpot, Insightly, and Zoho to name a few.
Meeting with sales personnel on a weekly basis is vital whether this is in person or over the phone to get an understanding of your forecasts, pipelines, and issues that they might be having. As their manager, it is up to you to help them in resolving issues and finding out why the forecasts and pipelines are not as expected. Early on there will most likely be the requirement of four-legged sales calls where you accompany them on a sale.
We had a client that was upset that after they hired a new salesperson that they did not hit the ground running. In talking to the owners, it came to our attention that most of their sales to date had been referrals, and through people they knew, so even they had not done “real sales” for their business, and now they were expecting a salesperson to come in and know their business and sell without any guidance, training, or management.
If you find yourself in this predicament, this is when you need to bring in a coach or consultant to help you understand what needs to be done for your business and possibly guide and train your sales personnel.
What Happened When Your Sales Rep Quit or You Let Them Go?Getting rid of a sales person if it is your choice is harder than other employees, as you have to have shown that you have provided them with goals and set expectations, training, and proper management. If there is an underperforming salesperson that you choose to keep after the regular probationary period of 90 days, it will take you 60-90 days to get rid of them if you do not wish to pay severance and the possibility of them taking a lawyer.
For non-performance of sales personnel, you have to provide in writing a notice of non-performance and provide them with 30 days to improve their performance. This needs to be placed on their file. This is the first violation and is why it is important to do this sooner than later. During this period, you as their manager have to show that you have gone out of your way to help them improve performance. At the end of the 30 days, if nothing has improved then you need to provide them a second written notice of non-performance and that if improvement is not seen this could be grounds for termination. In many cases, sales people will have already started to look for another position and will leave before the 60 days is up. If they are still in your business, you need to provide them a final letter stating that this is the final letter and if performance is not seen at the end of this period, they will be terminated. By going through this process and documenting properly, could most likely mitigate and lessen your exposure to legal action and severance pay.
The last complaint that we hear is that the sales person just up and quit on them and took their customer list and gone to the competition. The question they ask is if there is any recourse? In most cases, we find out that there has not been a formal contract where this type of information was outlined as part of their employment contract. Without a contract that outlines the terms of their employment, there is not really any legal recourse.
SummaryWhen it comes time to hire a sales personnel for your business, this will be one of the most important hires you can make. You want to hire the right personnel to represent you and your brand outside your business, so it is important to take this decision seriously and invest the time and effort in bringing the right person on board, training them on your business, and managing them properly so that you have a productive sales force.
If you need help in this area, this is an area where we have helped many of our clients. We can also help you hire other professionals to work with such as recruitment firms for finding candidates or corporate lawyers for developing the right employment contracts and advising you when you need to terminate employment for performance.
This is a question that has come up quite a bit lately with several of my clients. The business has grown to a point where the business owners need to focus working on the business instead of in the business making sales. They now feel that they should grow their business and hiring feet on the street will get them there.
The real answer to the question of when are you ready to hire is that usually when you have to ask you are not ready. It is primarily because your current infrastructure does not support having a new sales person who is a new employee and even though they may come from your industry, they are not familiar with your particular business and it will take a few months for them to hit the ground running. It is a fallacy that hiring a sales rep will automatically free you up to do the things you want and need to do in the business, in fact for the first few months it will most likely increase your workload until the individual is comfortable with your products and services, business processes, and the culture of your business.
Before you consider hiring your first sales rep be able to have an answer to the questions posed below. There is more to it than just having the funding for a head count.
If you have answers to all of the questions above or have a plan of how you are going to address them, then you are ready to hire your first sales personnel for your business. Hopefully this provides you a list of things to think about which will help you determine if and when you are ready. As you work down the list, it is important to document your answers as this will help you not only for hiring the first sales rep, but for every sales rep you hire as you continue to grow your business.
RK Fischer & Associates