Is your team in that 10%?  Are you modeling ethical behavior?  Allowing for extensions on sales quotas, backdating contracts, or permitting a sleazy rep to thrive, demonstrate the philosophy that “cheating” is acceptable.  Make sure the behavior you exhibit is the behavior you want modeled by your reps.

To ensure that the principles of your sales team jibes with the company philosophy, set formal ethical standards.  Include an ethics clause on job descriptions, and discuss sales morality
during team meetings.

Countless reps have come into our offices for interviews and quickly demonstrated that they have fabricated many of the achievements they touted. It follows that the best reps admit their failures and are honest about their experiences.

Where does it start? Sure it starts with each and every one of us, but individual responsibility goes hand in hand with company standards. If we want our reps to be ethical, then we as sales
managers have to lead by example. Be honest and open with customers, partners, and team members.  You’ll be rewarded with a happy team and repeat sales.

Image(s): FreeDigitalPhotos.net

One of the biggest questions from managers is where to start in creating effective compensation plans for salespeople.   Pay them too little and they will leave. Pay them too much and they’ll get lazy.  Straight commission is good, no wait, straight commission is bad.   You know there is a for need some kind of incentive plan to motivate your team.  The problem is that you don’t know what it looks like.

Your sales compensation plan has a huge effect on the bottom line.  Set up correctly it can yield great results for all.  The best salaries and incentives create a positive buzz and your ability to attract talent will increase.  Top performers will hang around too.  No worries about poaching when the money is rolling in.

Base salary, commissions, and sales prizes make up the bulk of a typical salesperson’s compensation package.  A well designed program focuses salespeople on activities that support the company’s business objectives, and in turn, reward those salespeople for their contributions.  New account development is important and so is growing the current client base. What’s the formula?  What’s the right balance between salary and commission? How do you measure success for special incentives?  What are you willing to pay to acquire sales growth?

Write the Plan

Connect sales with business goals.  Make sure the sales plan is in alignment with the business plan.  Are you looking to increase new accounts or sell-in a new product? Design incentive and rewards that drive sales to support your mission.

Simplicity = Success.  Keep the plan simple so reps can work effectively and know where to push.  A complicated plan that pays out later rather than sooner, or one that is difficult to understand can backfire and de-motivate your team.

Create the perfect recipe.   The best plans have the following ingredients- base salary, variable for performance (commission) and incentives tied to specific targets.

Structure.  What’s the best mix? Evaluate the sales person and what is being sold.  The role of the salesperson, the sales cycle, and the kind of selling, all factor into the equation of salary vs. commission.

Performance Measures.  Guide salespeople in their focus by clearly defining benchmarks and goals.  Make sure the target is attainable and results are easily measured.

You want your reps to be big earners.  We have always had the joke that if your reps can afford Porsche’s, that’s a good thing. If they’re making a lot of money, you’re making more.  Feed them, support them, and offer opportunity.  Encourage them to work harder and reward them generously.

It’s time to add to the team so you create a detailed job description, and the word out.   The only problem is that you’re inundated with resumes from less than stellar applicants, and some of them are down right strange.

Your new desired superstar is not a door knocker.  She is someone who utilizes proven sales techniques and can measure everything in the selling life cycle. She is efficient and is able to bring in more business at a lower cost. This superstar is a different breed of hunter.  She’s not checking the help wanted section.  It’s time to evolve.

A few years ago posting positions on your website and job boards resulted in a stream of viable applicants.  The best 2.0 sales reps don’t bother checking those sites.  They will never see your ad. It’s time to move from Sales Hiring 101, to Sales Recruiting 2.0.

Start by actively targeting specific companies and networks. Profile your ideal sales person.  You don’t want to cast a big net and see what you dredge up.  You want to fish for a specific breed. Determine where that is, and drop in the line.

Once you reel some in, determine the ones you will keep.   Evaluate the haul and interview only a select few of the highly qualified candidates.  In addition to the interview, determine the quality of your catch with behavioral and competency tests, role-playing and assignments.

Grade your prospects.  Create a scoring system and rank the candidates.   The prize winner should be a proven performer that meets quota and grows the business.

Sales 2.0 is more of a scientific way of selling than ever before and Sales Recruiting 2.0 practices targets the applicant you seek, instead of targeting applicants in general.  Reduce your turnover rate and lower your hiring costs.   Search out, select and hire the best.

The detail behind the answer involves looking at supply and demand. The model of supply and demand is the backbone of price determination in a free market. Demand refers to the amount of product or service that is desired from buyers. Supply represents the amount of products or services provided.  The ensuing philosophy dictates that price is a reflection of supply and demand.   With high unemployment creating a large amount of candidates and low supply of jobs, it would make sense to believe that the price (salary) would be reduced as well.

In the world of retail the example might look like this.   Your favorite band is having a special concert.  Because there is a surplus of concerts, the supply and demand market has determined the acceptable ticket price among buyers is forty dollars.  So you plan on paying forty dollars.

In the job market overall, the same theory looks like this.  With employers hurting financially and receiving hundreds of applicants for a single open position, hiring managers can offer lower salaries for available jobs.   You believe you can offer a lower salary too.  It’s a buyer’s market for talent, right?  Let’s take a closer look.

You go to buy a forty-dollar ticket to the concert and you can’t find one.  While forty is the standard price for most shows, this is an exclusive performance with limited seats, so these tickets are one hundred fifty dollars.  With only a limited supply available, and demand high, the longer you wait for tickets the more expensive they will get, if you can get one at all.  Demand has increased for the tickets and so has the price.  Your choice is to pay less for a lesser show, or pay more and invest in the top performance you desire.

Hiring the best sales talent is like buying a ticket for the concert. Overall, there are plenty of salespeople to employ, just like there are many concert tickets available to purchase.  However, you don’t want “any ticket” or “any salesperson,” you want the special one, the best.

Twenty percent of all salespeople make eighty percent of all sales. Want cheap?  Bargain hunt low performers, and get yourself a down-market deal. Want gold? Dig for the top twenty percent and pay what it takes.

Don’t be fooled by the economy.  The market may be dropping, but the desire to hire talented sales performers is increasing.   Demand is high and supply is low. If you think you can offer a drop in salary, be prepared for a drop in sales.

Research shows that a high percentage of hires are made based on looks.  Fortunately the halo effect becomes less problematic with awareness.   Even an experienced interviewer might see beyond looks, but fall for someone previously employed by a marquee brand. This doesn’t correlate to capability and successful sales manager must work against this bias to evaluate the candidate’s actual ability to perform.

Forget about your “gut” feeling and “hunches” in regard to hiring a sales rep. The validity and success of the interviewing process increases when you use a formalized, standardized, objective way of evaluation.

Know what you are looking for

Drill down and define the skill set you need on your team. Hire based on the selling role and work environment.

Look in the right places

Top performing sales reps are usually employed. Don’t hire the friend of your neighbor because she’s a real “people person.” Target specific companies and networks.

Have an Objective Way to Measure Candidates

Determine the hard and soft skills that are important to evaluate, and stick to the plan. Interview, role-play and use behavioral and competency tests.

Measure All Candidates Equally

Use the same standards of assessment for all candidates. Using a base question and answer format prevents the haloing of applicants. Develop scoring criteria to evaluate applicants.

Don’t Settle!

Dump the philosophy that a warm body is better than nothing. It’s much easier to expand your sales base with the right team than it is to clean the mess up after a poor rep.

We have applied these rules to achieve superior hiring success rates and sales results for both our own teams and for our customers.

The process of promoting from within is common, and easy.   You fill the position, keep your salesperson happy and move on.  You think that placing your rainmaker in a leadership position will result in the creation of more rainmakers.  Unfortunately this plan can do more harm than good.  Just because Babe Ruth can hit it out of the park, doesn’t mean he’d make a great coach.

Hiring for a sales manager takes due diligence.  The roles of salesperson vs. sales manager require a different skill set and DNA. Yes, there are some sales people who are promoted to a managerial position and excel.  However when you randomly take your best player, give him a pep talk and send him off to create new and better results, you risk jeopardizing your whole sales function.

Sales Manager Traits vs. Top Producer Traits

Top sales performers are independent and singularly driven.  Often they like to work outside the boundaries of the organization.   Great sales managers are the opposite.  They think of the team before the individual.  They are managers and leaders and have the skills  to think about what is best for company.

Lastly, top performers are frequently driven by money.  As managers they often believe that others have the same motivation and can’t understand why their team can’t deliver the business like they can.  Good sales managers have patience and the ability to train poor performers.  Just because they have “it”, doesn’t mean they can teach “it”.

Responsibilities of a sales manager include recruiting and training, budgeting, forecasting, developing compensation, coaching and ensuring the success of the team.  The responsibility of a salesperson is direct selling.

When you promote from within, you may think you are getting a sales manager.  Actually you may be getting a salesperson that wants to be a sales manager.  Your new sales manager now has to transition from closing deals to running a small business.  A leap that may be impossible to make.

Industry averages suggest that incoming reps deliver below 50% of their quota after 12 months.  Less than 50% continue on for at least 24 months after being hired.  What does that mean to you?  Well, only half of newly hired reps meet their goals and then leave the company within two years.  With those odds, you might have better luck blindfolding yourself, randomly grabbing a resume and then hire that person.  It would be a lot cheaper too!

People are important to VP’s, but few have had hiring training.  Rigorous hiring practices can increase those odds, but first you need to understand how to find and choose suitable individuals.   It may be easier for an untrained manager to hire in other categories, say accounting or engineering.  Those careers lend themselves to measurable data that can be used in determining the past performance and future success of a candidate.  Unfortunately, it’s a little trickier when hiring a salesperson.  Characteristics such as drive can easily be faked by someone in sales.  Let’s face it; even poor performing sales people can be charming and persuasive in an interview.  An experienced recruiter can peel away the outer layer of “charming” and see beneath to the real skill set and traits.

CEO’s and VP’s have escalated in position because of their business acumen and excellence.  High performing sales people are recruited and retained by trained professionals that measure worth based on performance, not on superficial “gut” feelings acquired at the interview. Every organization has experts that are trained to handle certain responsibilities.  You wouldn’t have your marketing manager handle payroll, so why would a CEO be in charge of hiring?

Your business employs an accountant, a lawyer, and a number of specialists that are paid regularly to do things that others are not qualified to do. A good sales recruiter has a hiring strategy, time to conduct a thorough process, knows how to assess skills and how to define performance criteria.  It takes talent, organization, determination, patience and training to be a productive sales recruiter. Not everyone can do it (even those at the top), so choose your recruiter wisely!

Full Time Sales

Control.  That’s what you get with a full time employee.  You recruit, train and manage the staff.  You can supervise their work environment, hours and production.

Unfortunately control comes with a hefty price tag.  Recruiting and training is a significant investment.  Managing a full time team also means the expense of benefits and HR management.  It may be costly to hold on to exceptional talent, and legalities may make it impossible to dump the underachiever.

Sounds expensive and challenging to manage your own staff, so why do it?  A seasoned full-timer is deeply rooted with the company.  Long-term relationships with customers are developed and revenue is strong and steady.  Company employees know your value story and can easily solve problems.  A full time employee is vested with your organization, and is loyal to the cause.

Sales Agents

Sales outsourcing is the strategy of using an outside agency to staff your sales department.  You have an abundance of talent to choose from without the typical recruiting time and expense. With a contracted sales staff, significant overhead is transferred outside of the company and you have the option of a short-term commitment when the long term is uncertain. Outsourcing allows companies to cut back spending without cutting back on productivity. Love your company but hate selling? Lack sales skills?  Are you a start-up or entering a new market? Free up time to focus on mission-critical core business functions while your experienced sales agents increase revenue.

Downside?  Well, sales agents work for themselves or an agency. Since sales professionals tend to concentrate on those sales with the highest commission structure, the sales agent may choose to invest more time to the client with higher compensation, not your business. It’s much easier to ensure that your own sales team is trained properly, consistently pursuing every opportunity and closing deals, than it is with an outsourced firm.  In order to be successful, resources are needed to find the right outsourcing vendor and you’ll need to manage expectations around results. If not administered properly, contracting your sales department could end up costing more than what you’d spend on an in-house team.

Which Strategy is Right

The decision to in-source or outsource sales really depends on your sales strategy, goals, what your customers want and ultimately, the availability of the right sales resources. Either way, make the choice carefully as it will have an enormous impact on your results.

So why is it so difficult to find and hire good salespeople?

According to the U.S. Bureau of Labor statistics (BLS), in May 2010 there were over 13 million wage and salary sales workers in the United States. The BLS also stated the number of sales jobs will grow at a rate of 7% to 13% over the next nine years, while the number of sales candidates ages 25 to 40 entering the work force will grow at less than 1%.  Finding, hiring and retaining good salespeople will become increasing difficult as time progresses.

As the economy grows and companies increase sales positions, recruiting will be one of the toughest challenges for business leaders.   No longer can you post a help wanted ad and have talented reps show up at your door.   In fact, no one may show up at your door. College-educated sales professionals with several years experience are in high demand, and most of those reps are already working.   Businesses of all sizes will be fighting for those that are available.  What has changed?  Why is it so difficult to find and hire good sales people?

Underlying Causes:

1. Fresh graduates are less likely to join the sales profession.  Lackluster classes in sales and marketing, combined with negative stereotypes of salespeople are turning new graduates away from this profession.
2. Unhealthy sales environment.  With the high expectations and stresses of many sales jobs, junior salespeople drop out and change careers.
3. Not investing in sales teams.  Poor training, and a lack of career advancement, sales culture and salary, has created less than desirable sales professionals in the market.
4. Good salespeople are employed and difficult to headhunt.  Managers take care of top performers and top performers are hesitant to leave their client portfolio (and income).

How to Find Talent:

1. Review the recruiting budget and be prepared to pay more to find top sales performers.
2. Consider utilizing recruiting sources to reach as many qualified candidates as possible.
3. Protect what you already have!  When resources are tight competitors will offer your staff more money, better benefits and opportunity.  Don’t get poached!
4. Design a recruiting and retention plan.  Protect yourself from the high cost of sales attrition.

The economy is improving and in order to maximize opportunities you need a top-notch team ready to sell.   Soon the marketplace will be flooded with available sales jobs and less than ideal candidates to fill the positions.   Build your pipeline now in order to maximize growth