How To Sell In An Upturn by Tom Kosnik

Posted on 23. Jun, 2010 in Newsletter

Sales reps, frankly, are a pain in the rear to hire.  In all the years I have been in the staffing industry I can honestly say that I have never met anyone that was super excited about the task of hiring sales professionals.  And for a sales driven industry, we actually do a pathetic job of hiring sales people.  One survey I read indicated that the average sales person last only eighteen months in a staffing company.  That is horrible. 

 As the economy heats up staffing firms again are hiring sales reps to bring in the business.  Regarding the specific task of hiring sales personnel, staffing firms have the exact same challenges of their clients.  They hire sales people they like.  Not a prudent practice.  There are many practices a staffing company can do to increase the success of hiring sales reps.  The results are worth thousands of dollars…, in your favor.

 When to hire a Sales Personnel

Astute business owners typically use an economic model to assist them in deciding when to retract staff or add on staff.  An economic model is not a budget or a particular profit and loss format.  Rather, an economic model is a financial model that one uses to stand one’s business up against to help make hiring decisions from a financial perspective. 

 In an economic mode, a business would have financial line item goals, and would be managing the business to or within these specific goals.  For example, the business may not want the general and administrative expenses to exceed a certain percentage of revenue or they may not want the sales expense to drop below a certain percentage of revenue.  Below are two economic models: one for a low margin staffing business unit and one for a fair margin staffing business unit. 

 In example 1, the “sales” expense is listed as 3% of revenue.  If the actual “sales” expense is 5% of revenue, then under this model, one will not be adding on sales executives.  Why, because the existing sales team has not reached full production levels and has additional capacity to generate revenue.  If the actual “sales” expense is 3% of revenue, then under this model, one will be adding sales personnel.  Why, because the existing sales reps are running at full production levels.  (One word of warning is, if the business’ compensation plan is too rich, than this dynamic will throw off the economic model.)

 In example 2, we are shooting for the 25% gross margin levels.  This is a staffing firm offering niche services.  We have more raw dollars to allocate toward the “sales” expense.  Great!  And because it is a staffing firm offering special niche staffing services, we generally end up paying healthy salaries plus a commission structure to sales reps.  All that said, the same guidelines will be in play.  In example 2, if the actual “sales” expense is 7% of revenue, than the business will not be adding on sales staff.  Why, they are under producing.  If the actual “sales” expense is 4% of revenue, the sales team is producing at above average levels.   It is time to add on the sales staff. 

 Another time to hire sales reps, beyond the economic models, is when the company has built out a strategic plan and has the plan, intent and money to open up in new markets.  Yes, we develop performa’s to assist us in making good decisions and managing how we are spending money in a new venture or new market.  But we are adding sales personnel based on strategic intent and our desire to grow the business. 

 Another time to hire sales reps is when our intuition over rides our logic.  Business people working in markets have a “feel” for the market.  They know when business is retracting or when business is picking up not based on the stock market but based on living and moving and operating in that particular business market.  We cannot shun this intuitive messages.  Therefore, a good time to hire a sales rep is when one has that certain feeling that buyers or the local market is beginning to move and shake in a good way. 

 Hiring Process

Process makes perfect.  The main benefit of having a hiring process is that the company ensures that no critical hiring steps are missed when the company is hiring personnel.  Many hiring mistakes are made when an owner or VP of Sales meets a prospect, likes this individual and hires them outside of standard operating procedures.  This is not unique to the staffing industry.  In general, small business struggle with establishing and remaining committed to a standard hiring process. 

Another main benefit of having a hiring process is that one person within the organization can in fact drive the process and be totally responsible for the execution of the hiring process.  If no one person is responsible for the execution of the hiring process then it is a simple case of too many cooks in the kitchen.  Typically, the human resources department assumes responsibility of facilitating the hiring process and making sure that all steps in the process have been fulfilled.  But this does not mean the human resources department would not work hand-in-hand with a Vice President or Regional Manager or Branch Manager. 

 A brief but adequate hiring process might flow as follows:

 Step 1 – Develop a hiring profile: a hiring profile includes particular job experiences and/or characteristic traits.  For example, we hire no candidates right out of college, candidates must have three plus years of selling experience, candidates must have experience selling services not products, candidates must have a college degree, etc.  The hiring profile will also include certain competencies the company is seeking in a suitable candidate such as computer skills, researching skills, phone prospecting skills, face-to-face selling skills, account management skills, etc.  Start with the end in mind and work your way to that outcome in a candidate. 

 Step 2 – Develop a job description: a job description includes specific job task duties that a sales representative has to perform in order to be awarded the job.  Some of these tasks in the staffing industry include researching, phone prospecting, face-to-face meeting with clients, making reference checks, problem solving, attending daily huddle meetings, working with the fulfillment team, etc.  What is going to increase your hiring matches?  Clearly articulating job task duties prior to hiring personnel. 

 Step 3 – Develop a job posting: A good job posting will include all vital information such as industry, job title, salary range, a couple of “must have’s” to apply, and a hook (what’s in it for them) to lure in candidates.  Some staffing firms do not put an email address in the posting, only the mobile number of the Branch Manager or Sales Manager.  Why?  Good sales candidate will weed out companies before the company has the opportunity to sell the candidate on the job.  It is best to have the first point of contact be the sales manager who can (a) hear how the candidate sounds on the phone and (b) close the candidate on a face-to-face interview .

 Step 4 – Posting the position: One can go the route of posting an open job on the well known job boards.  Keep in mind that there are 100’s of job boards that allow for free postings for specific job positions.  Don’t just post on a couple of job boards.  The company has to advertise the job via several job board mediums.  The lesson, cast the net wide. 

 Step 5 – Sort and prioritize candidates: As candidates come in, stand these candidates up against the “hiring profile”.  Now, the established hiring profile will act as the key criteria that will assist the hiring manager or the human resources department in prioritizing top candidates.  Smart sales reps don’t wait around.  If your response is too slow, then you are communicating to candidates that your organization is sluggish and not well managed.  Companies that have their act together make decisions, move on these decisions and make things happen.  And good candidates know it and will act accordingly. 

 Step 6 – Conduct phone interviews: phone interviews are very brief.  The company simply wants to make sure that the candidate has a good phone voice and good phone presence.  The company wants to validate a few items that are in the hiring profile to ensure that the candidate does in fact have these competencies and qualities.  Then the company will want to set up a face-to-face interview.  The key goal of the phone interview is to quickly reach out to the top candidates and get them in the office for a face-to-face. 

 Step 7 – Conduct face-to-face interviews: Face-to-face interviews can last anywhere from an hour to three hours.  The traditional “walk through the resume” technique is an easy way to get started but it wastes a lot of time forgoing more critical interviewing techniques.  What is important in a face-to-face interview is to get a really good feel about the candidate’s in-depth experience in particular competencies.  For example, “Tell me about your problem solving skills?”  “Give me an example where you faced a problem or conflict with another team member.  What did you do?  How did you resolve the conflict?  Where were the outcomes?”  The interviewer wants to dig deep and find out the details of how a candidate performed a certain competency.  Any candidate can say, “Yes, I have sold services.”  You want to have the candidate talk through several examples of how they in fact sold services…and a lot more of course.

 Step 8 – Utilize personality profiles: Industrial psychologists have been developing and validating “sales aptitude” surveys for years.  An acquiring company can purchase such tools for a relatively low price point.  $100 for a personality survey can save a company thousands of dollars on the back end by avoiding bad hires.  In any case, have the candidate take a personality profile.  Process the results with the candidate either in a second face-to-face interview or phone interview after the initial face-to-face interview.   Some EEOC laws do apply with these profiles, but nothing any staffing firm cannot handle.  The organizations selling the tools will guide any customer through these issues. 

 Step 9 – Make a verbal offer: Once the company locks in on a couple of candidates, a verbal offer is made.  A verbal offer is just that, verbal, not in writing.  The company doing the hiring will get a better feel of the candidate in this step.  It is not uncommon for candidates to put their best selling foot forward while interviewing.  When a verbal offer is made, many candidates will put down their guard and show more true colors.  Take note here.  It is critical to not ignore any intuitive hints that may emerge at this point in the hiring process. 

 Step 10 – Negotiate details: If things are positive and move forward, then negotiate all the details verbally on the front end.  First, this gives the candidate ownership in the employment relationship right from the start.  Secondly, the hiring company will also experience firsthand how the candidate performs negotiating skills.  Don’t be put back by a hard negotiator.  If a candidate is negotiating hard for a good deal, chances are that this candidate will negotiate just as hard for your company.

 Step 11 – Run back ground checks: Standard background checks include drug tests and background verification checks which include past employment compensation verification.  Again, many organizations provide this service and in today’s day and age. 

 Step 12 – Make a written offer: The written offer is the last piece.  It is a formality more than anything else.  All the negotiating should be completed prior to a written offer being sent.  There should be no surprises on either side of the equation.  If your firm does not have a standard offer letter, a simple internet search will offer plenty of reliable examples. 

 All said and done, hiring sales reps is not an easy task.  There is an art to the job of hiring sales reps.  Even if one has years of experience, mistakes are still had.  Nobody bats a thousand in this category.  However, a strong economic model and a solid hiring process can really help in minimizing mistakes and truly save the company thousands of dollars on the back end…, in your favor of course.

 Tom Kosnik assists staffing companies improve employee performance, corporate revenues and net income profits.  More can be learned at www.visusgroup.com.  Tom can be reached at 312-527-2950 or tkosnik@visusgroup.com

Tags: sales advice