Often prospective employers will call us seeking to hire a candidate that has a “solid book of business”, or a list of former and/or current clients in which the candidate has key contacts. As the thinking goes, this will allow the rep to quickly generate considerable sales upon joining the new employer. I like the optimism and I can’t blame any sales manager for trying to get a leg up on the competition in acquiring and developing new accounts….unless the requirement to hire someone with a book of business means putting little or no emphasis on hiring someone with the experience and DNA required to be successful in the new role.
Reasons Why a “Book of Business” is Less Important Than it Might Seem
1. Expiration Date – In many sectors, people change jobs regularly, so having a handful of buying contacts today might be completely value-less in 6 or 12 months. Once a buyer moves to a new role or employer, there may be other existing vendor relationships already in place, or their purchase requirements may have changed.
2. Company Loyalty – Often times, a buyer is equally loyal to the vendor and the salesperson, so the buyer-salesperson relationship is effectively compromised once the sales person switches employers.
3. Difficult to Quantify – When interviewing, candidates will often drop names and tout the value of their “extensive rolodex”, but in a lot of cases, the past business volume has more to do with being in the right place at the right time and filling orders than actively generating business. How much business will come their way this year. In most sectors where demand is unpredictable, forecasting sales based on relationships is virtually impossible.
4. Non-Competes – When a rep departs from one employer, there may be residual obligations in their employment contract which prevent them from being able to pursue opportunities and contacts that they were exposed to in their previous employment, which obviously diminishes the value of these contacts and associated opportunities.
5. Old School – Sales has changed a lot since the Mad Men days when a salesperson could call a customer and lean on their relationship or twist an arm with an old “friend” to close a sale. Nowadays customers perform more research before making each purchase – even repetitive purchases – and they want the best deal each time. They are more inclined than ever to try new vendors to get what they want. This is particularly true with business buyers who may be required by company policy to hold a fair and transparent competition for every purchase. Prior relationships may matter very little in such cases.
You Can Bank on the Abilities and Traits
Perhaps the most risky aspect of hiring someone based primarily on their relationships is that they won’t actually have the right DNA to actually sell in the new role (See the The Pitfalls of Hiring Sales People Based on Experience). Sales people who are perennially successful, have sold at the right volume in an environment similar to yours, and possess all the other requisite abilities will develop the right relationships and locate the opportunities required to meet or exceed sales goals. To exclude these candidates from your sales recruiting efforts would be a risky strategy, but chances are your competitors are doing just this.
The most successful sales managers don’t fall into this trap.
To your success!
Image Courtesy of digitalart | freedigitalphotos.net
Eliot received his B. Comm. from Carleton University and has been honored as a Top 40 Under 40 Award winner.
He co-authored Sales Recruiting 2.0, How to Find Top Performing Sales People, Fast and provides regular insights on sales team management and hiring on the Peak Sales Recruiting Blog.
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