Skip to content

4 Ways to Make Your Sales Interview Process More Reliable

A thousand ain’ts. This is how a colleague described a recent interview with a sales team hopeful. Sloppy grammar and poor speaking ruined an interview for what appeared a highly educated person. Sometimes a candidate looks good on paper, but the product doesn’t match the brochure. Other times nerves prevent an accomplished and qualified candidate from making a good impression.

Should some bad grammar, tons of ums or sloppy speaking ruin their chances at a sales position with you? While you want them to be able to perform under pressure, even elite athletes have bad games and you don’t want to cast away someone who may in fact be a great fit for your team.

Rather than relying on instincts to dictate which candidates should join your team, use facts and proof to support your decisions. A multi-step interview process will help you determine whether someone is a poor performer or simply had a bad performance. Here are some mechanisms to add to your interview process which will help you evaluate out your candidates and ensure you are always picking the right people for your positions..

1. Run a Call Test. If your interviewee fumbles or appears nervous during an interview, being on the phone might make all the difference. Getting in the zone is important for some sales people. Whether your potential rep is reading from a script or using their own sales skills, if they can’t make it in a live setting, they can’t be an integral part of your sales team.

2. Check References. Super-excited about that interview with a rock star sales rep? If a sales candidate stumbles in an interview, make sure you speak with former managers to see what it was like to employ the person. You can test further or do a second interview if the references check out.

3. Have Another Sales Manager Conduct the Interview. Think it’s just you? If you are known to be a bit intimidating, chances are a new sales rep could be terrified of you – particularly if you’re the final say for new hires. Try bringing in a colleague or another sales manager, and see if the atmosphere changes. A second perspective is always valuable, especially if they are evaluating against the same criteria. Many companies also have an HR interview to test culture fit and this can also provide valuable input about the candidate’s interview skills.

4. Role Play. If a call test isn’t possible, it’s completely fair to ask a potential candidate to pitch your product as part of the one-on-one interview. The candidate may either fall completely apart or pull it together – and either way, you’ll have more data for your decision.

Whether you’re confused about how great an applicant looks on paper versus how they’re interviewing , or you simply want to be sure about picking the right person, add steps and structure to your interviewing process – it will pay dividends to the performance of your sales team.

Related posts

Look for These 10 Traits of Top Performers in Your Next Interview

Identifying Sales Hunter DNA: 5 Interviewing Secrets

Outside Salespeople: Our Quick-Start Guide to Hiring

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

The Most Common Sales Hiring Mistakes

The three most common sales hiring mistakes which result in sub-optimal sales hires, missed targets, and staff turnover.
1. Poor understanding of selling environment
2. Unstructured hiring process
3. Not looking in the right places

To read a transcript of this video click here…

Full transcript of the interview.

Avoiding the Three Most Common Sales Hiring Mistakes – Peak Sales Recruiting

Eliot Burdett: Hi, I’m Eliot Burdett, a partner at Peak Sales Recruiting.

I want to talk to you about the three mistakes that companies typically make in their sales hiring.

The first is, not understanding their own selling environment.

When we’re talking about a selling environment, we mean the different characteristics that make your sales environment, or the environment that your sales reps work in, different from that of any other company.

So we talk about things like your selling process, any sales methodology, the price of your product, the sales cycle and the customer’s buying cycle, the different way you promote your product, the maturity of your market, the maturity of your customer, the market share, your positioning in the market and the amount of support that your team has.

All of these factors, combined with the culture of your company, make your selling environment different from another company and therefore make the type of person that you’re looking for, often, very different in terms of the attributes that they have to have to be successful in your company.

So, that’s the first thing: knowing your own selling environment.

The second thing is having a structured hiring process that allows you to compare apples to apples.

So, unfortunately, a lot of hiring managers hire on gut, and I think there’s a lot of halo effect that, you know, a smile and a sunny disposition, translates into a successful salesperson.

Unfortunately, that’s just not the case.

The more you can; when you’re interviewing salespeople and, what I’ve said before is, it often feels like you’re peeling an onion with a thousand layers, because salespeople are conditioned to tell you the types of things that you want to hear. They’re conditioned to do that in their selling, and they’re going to do it in the interviews.

What you want to know is what they’re really all about; what kind of selling environment they’re uniquely suited to succeed in.

And so our selling process is all about; sorry, our interview process, which involves everything from different types of screening, to behavioral interviewing, to different kinds of background checks and very thorough, structured background checks.

All of that, combined with score sheets and criteria sheets, allows us to make sure that we are comparing apples to apples and comparing different candidates objectively rather than looking at each and hiring based on gut feel or how we feel on a certain day, and being attracted to the wrong things.

So that second thing is really important: having structure in your hiring process.

And then the third way that many companies make mistakes in sales hiring is hiring who’s available rather than the right person.

So, it’s very typical for companies to go out to the job boards and post an ad and then interview the people that come back.

But unfortunately, a lot of the time, the people that come back from job board postings are the people that are looking for jobs. And, unfortunately, they’re often the wrong people.

They’re the people that are either out of work or hoping to get a job. And what you want, when you’re hiring, it’s really critical that you get the right person. In this kind of economy, you’re looking for the person who not only has the right attributes but is also a reliable performer and can show you; give you the proof that they are able to succeed in your selling environment.

And, usually, reliable performers are working somewhere. Which means you’re gonna have to; they’re not gonna see your ad because they’re going to be busy selling and making money.

What you’re going to need to do is go out and find them and get them exposed to your opportunity and make sure that they are aware of it and potentially excited about it so that if your company is a better opportunity for them; better career opportunity for them to work for your company, they’re aware of it and they can make the move.

So, those are the three ways: having a clear understanding of what you’re looking for; your own selling environment; what you’re looking for.

The second thing is having structure in your sales hiring process.

And the third thing is to hire the right person, not who’s available.

I hope those tips are useful to you. Good luck with your sales hiring. I hope we get a chance to work together. Thank you.

(text on screen): For more sales management and hiring tips, visit our blog at: www.peaksalesrecruiting.com/blog.

Evaluating Potential Sales Hires

Related posts

Ten Austin Tech Companies To Watch If You’re In Sales

5 Benefits of Partnering With a Recruiting Agency for Your Hiring Process

Raleigh’s Sales Hiring Landscape

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

What Four Simple Tactics Reduce New Rep Failure?

Want to cut the failure rate of your sales reps? Set yourself apart from the average team where 25-50% of reps fail and exit during the first year? Include these steps in your on-boarding process and, assuming you picked right in the first place, almost every rep you ever hire will stay with you to become consistent and reliable producers.

1. Set them up to Succeed – bringing a new rep in and expecting them to succeed on their own is a recipe for disaster. You need to build a relationship with them to create the loyalty and commitment.Develop and support them by providing the right training and access to mentors. This will build confidence in the rep that you are as serious about them as they are about you.

2. The Right Training – telling a new rep to “read the company website and then let’s talk” is fine, but to accelerate the learning process have a structured training program with checklists of things that the rep needs to learn over the course of their first few weeks with the company. Document all the relevant scripts and knowledge someone must have in order to sell for you. Link them up with a good role model on the existing team who will take them on calls and give them rich insight into how you position the company and develop business.

3. Set Goals Early – New reps are often hired without a quota and the old adage holds true – you can get anywhere if you don’t know where you are going. Assign the quota immediately and don’t stop there. Make sure they have short term learning and sales activity goals and hold them accountable.

4. Be Ready Day One – Many new reps show up to a desk with no computer and no access to the relevant sales support systems so they spend hours twiddling their thumbs and nothing could make a first impression worse. Have cards printed, computer set up with network access and a schedule prepared for their first few weeks so they can get into the right mindset immediately.

Fail to perform these steps when you hire new people and you may be throwing your babies out with the bathwater when you cut failing reps from your team.

Related posts

San Jose’s Sales Hiring Landscape

4 Ways to Ensure Your Compensation Planning is Driving Sales

Soft dB Drives Strategic Expansion Across North America

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

7 Signs Your Sales Candidate is Going to Rock on Your Team!

A surprisingly high number of sales people aren’t well prepared when they attend job interviews, perhaps because they don’t do it that often, but when you see one who makes a great presentation, it should give you some insight into how they will prepare for customer meetings. While this is not always the case – there is an old saying that the best sales job occurs when a sales person is interviewing for a job – there are several indicators that tell you how seriously a sales candidate takes their performance and career.

To continue reading this post, click here >>

1. They Have Done Their Homework – First, if the person has researched your company, articles and exec backgrounds so they speak knowledgeably and make relevant references, you can ensure they not only really want the job, but may use the same techniques to get sales through the door once they’re employed with you.

2. Thorough – If he or she is able to demonstrate their qualifications against your job description line by line, this shows you how thorough the candidate is. You can be assured they’ll leave no stone unturned when pursuing a client.

3. Adding Value – In the interview, if your candidate makes suggestions about how you can succeed in relevant territories and target markets, and any changes you can make to improve things, you can see that this candidate knows how to put his or her work experience to use for a company. The candidate will likely be consistent in pitching new ideas and improving the workforce morale from the rep side.

4. Clarity of Purpose  – If he or she is clear about their own wants and career plan and expectations of an employer they would choose to serve, then you know you’re working with a candidate who will be forthcoming about problems and will work with you to create a positive environment for the team.

5. Qualifying the Opportunity –  Is your candidate organized?  Do they present themselves and their relevant sales accomplishments clearly and compellingly, and ask qualifying questions to see if this is the kind of place they want to work? It’s a good sign that this isn’t someone who is looking for just any job – they are a long-term worker looking for a long term situation.
6. Positive Energy – Does the candidate show energy, intelligence, and enthusiasm? If so, you can bet he or she will bring that energy into sales calls.

7. Follow-Up and Follow Through – Do they follow up with emails to thank you for your time? Are they proactive with relevant references? If so, you can expect the same behavior with potential sales.

It’s often difficult to find sales reps who can become long-term members of your team. By gauging attitude, professionalism, and other factors during the interview process, you can make sure that a good interview turns into a great working relationship for both you and your potential employee. A sales team is only as good as its weakest link, so weeding out potential weak links before even hiring them is the best possible way to keep your team performing at top levels.

relpost-thumb-wrapper

Related posts

A Statistical Look at Toronto’s Sales Hiring Landscape
Business Transformation is Easier; Ask LivingWorks Education
Quick Tips on Hiring Hunters for Your Sales Team

close relpost-thumb-wrapper

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.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.

Connect:

Latest posts by Eliot Burdett (see all)

Signs You May be Creating a Toxic Sales Environment

ToxicConsistently delivering sales targets is the primary mission of any Sales Manager and if you are like the best, you work hard to build a high performance culture, while keeping morale high.

There are times however, when, the drive to succeed unwittingly backfires and create an unproductive environment for sales. If you see your sales reps showing signs of frustration, or falling morale, some of these management tactics may be to blame.

To continue reading this post, click here >>

Fostering Unhealthy Competition

In many cases, competition is good. Allowing sales regions to overlap may seem like a great way to get sales reps engaged in some healthy competition, but, it can also make your company look disorganized.

If your sales reps are calling and pitching to the same businesses, bitterly fighting with one another to close the same leads, you’re going to see your employees’ morale drop within the time frame of a week or less. I have experienced this first hand with multiple reps calling from one company and I can tell you – It is annoying.

It seems like common sense, but it is worth stating the obvious. Assign reps to exclusive territories and then encourage them to compete based on results and quality of business rather than allowing them to fight over the same accounts.

Setting Impossible Goals

Your job as a sales manager is to make impossible goals seem possible and motivate the team to achieve the goals, however, making drastic changes like upping call quota by a large amount overnight or forcing sales reps to work too far outside their comfort zone, could cause resentment which compromises your mission.

Make sure that any changes you think might work, will actually work. People usually don’t take well to major changes. Talk to your reps. Take into account your manpower, your sales reps’ current workload, and overall morale. Implement any big changes slowly, if possible.

Giving Your Top Reps all the Good Leads

This may make sense in principal – your top reps continually prove themselves to be reliable, and their commission checks show it. Unfortunately, you could be preventing some of your middle-level reps from jumping up to the next level. You may also be putting yourself in a situation where you are overly dependent on a small number of high performing reps that may or may not always be with you.

Take time to work on the strengths and weaknesses of your individual reps. Let them pitch in their best areas, and work to help them get to the top. If they’re hungry for it, your assistance will make it happen. Carefully think about who your star players are, and work to cultivate a fully trained, star player team that has a use for even the weakest links.

Attitude is often everything when it comes to playing a management role in any business. As a sales manager, you want to make sure your employees don’t hate coming to work – or working for you – by creative an awesome working environment, where you give them every opportunity to succeed and they are motivated to do so.

Related posts

B2B Sales Team Structure: A Simple Strategy for Creating a Winning Team

Try These 7 Strategies to Increase Your Sales Team Motivation

7 Tips on How to Train Your Sales Team for Success — And Measure Your Results

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

Efficiency vs. Effectiveness – Forget the Difference and Fail

drillNo one would argue that work for work’s sake is a cancer that must be avoided at all cases, but in practice are we conscious of the different between  being busy, and getting the right things done?

Many sales managers get tangled up in “busy work”, particularly if they’re receiving pressure from above to get make their reps do more. “Looking busy” and “doing busy work” are not the goals of any productive sales team. We can spend countless hours preparing for calls, researching customers, and holding meanings, but this means nothing if our numbers aren’t coming in and our sales aren’t closed to meet the required target.

To continue reading this post, click here >>

Being efficient means doing the least amount of work to get something done. Being effective means working on the right thing and getting it done in the right timeframe. Your reps must be both.  A commission comp plan seems like it would be enough to ensure your reps are motivated to be efficient and effective, but this is not often the case. We live in a world where most people are paid by the hour and have no incentive to get things done on time or done at all, and the influence this has on reps is easy to underestimate. When prospects say they “will get to things when they get to things”, your reps need to consciously maintain momentum rather than passively accept a potential stalled deal.

Clear targets and a simple comp plan will help keep your reps focused on a goal and increase likelihood that they will work towards the right goals, but you may need to help them be efficient, particularly if they are less experienced and haven’t yet developed exceptional work habits.

Your number one tool to help them be more efficient is coaching. If your reps are not using their time efficiently, you should be able to roll up your sleeves and coach them on the right actions. Dissect their day and help them analyse what work is not essential so they have more time to focus on what is. Work with them to develop great work habits. The payoff in results will be huge.

Related posts

Selling to Government 101

What I Wish I Knew Before Becoming a Sales Manager: 29 Expert Tips

Using Data to Power Sales Team Productivity

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

Whyhire.Me Blog Interview

Eliot Burdett, CEO of Peak Sales Recruiting, sits down with Whyhire.me for an inclusive interview on how having a diverse web presence impacts sales recruiting.

Related posts

The State of Sales Staffing in 2020:Hiring, Training, and Retention

Remote Company Culture with PEAK’s Chief Spirit Officer

What it Takes to Really Attract Top Sales Talent

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

Sales Management Advice – Managing Under Stress

Managing Under Stress

As a Sales Manager, you’re constantly faced with the challenges of leading a team while answering to your management, keeping fresh ideas circulating through your team, and playing to the strengths of your salesforce. You get pulled in 100 different directions. It is part of the territory so here are some techniques you can employ to help you rise above the noise and drive great sales results.

Be Willing to Change

Some sales managers are so bogged down in day to day priorities that they forget how to make true, extraordinary changes happen in their own leadership and management styles.

Make sure to spend time each day reviewing your leadership style and success. Be open and be willing to make the changes necessary to represent yourself as a true leader to your team. In many cases, you’ll be surprised at how much your team and organization  are willing to change with you.

Look Around

Do you know what your competitors are doing? Are you at the top of your game – not just copying fresh, new ideas you see out there, but inventing them?

The only way you can stay ahead of the curve is to do your research. This is about more than taking a look at blogs and current methodology of selling. Listen to your sales staff, and objectively evaluate what is and isn’t working with your current team. Sometimes even small changes to process and tactics can pay huge dividends.

Manage Dynamic Work Practices

If you’re willing to change, you’re willing to never stop changing. Once you resolve to yourself that you’re going to keep pushing the limits, trying new things, and preparing to excel, you can’t ever stop that process or you’ll lose momentum.

Being a dynamic, motivated leader is a huge part of being the kind of manager that your sales team respects and wants to follow. It isn’t necessarily about bending and breaking the rules – it’s about introducing new rules and strategies that ensure the results of the sale efforts are higher than ever before.

Be Willing to Listen

If your sales reps have great ideas, don’t squash them or take credit for them. Make your sales team an idea box. Your sales reps do work for you, and you can’t let them forget that – but you can allow them to take part in meaningful dialogue that will help you propel your sales team to record-breaking numbers.

If the chaos around you is getting in the way of performance, use the chaos to your advantage. Do this and you will be breaking sales records.

Image by: Nicolai Berntsen

Related posts

B2B Sales: 7 Ways It’s Changing Fast

30 Game-Changing Statistics To Improve Your Cold Calling

10 Ways to Motivate Your Sales Team to Crush Their Numbers-Infographic

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

Sales Managers- Is It Time for a Raise?

If you are a sales manager who has pushed your team to peak performance over the last few years at your company, you have accomplished an impressive feat, given these economic conditions. You might think you deserve a raise for your performance and you likely do, but since so many good people are still out of a job, and things have been slow for many companies over the past few years, you might still feel the timing is just not right.

In many cases, you should be a little cautious.

To continue reading this post, click here >>

Even if you’ve had a great review and your team is killing it this year, there are plenty of factors to consider before asking that you or your team receive an increase in salary from management. Here are some things to consider.

If Yearly Increases are Cut, So are Performance Based Raises.

If your company typically gives out an annual increase to employees, but you’ve seen that cut back over the past few years, your company is likely reducing overhead just to be able to stay in the game. Meaning, if you ask for a salary increase, you may not be likely to receive good news.

In this case, patience is a virtue. Continue to demonstrate your importance to the company over time, work to make the company money and prove your worth, and a salary increase won’t be too much to ask when things are better financially.

Performance Based Raises Can Demoralize Other Team Members.
If you are promised a huge salary increase based on good performance, other team members at your level are likely to catch wind of it. When that happens, it demoralizes other employees in your company and could potentially cause problems between you and other staff members. Executives tend to avoid making decisions that will cause these kinds of results.

One way to handle this is to explain to executives what you have to offer the company, and how rewarding you now will benefit your company in the long run.

Your Bosses Want to Know They’ll Get Their Money’s Worth.

The value of a dollar expands when times are tough. If your bosses need to know that you are going to bring more value to the company if they pay you more money, tell them that – and how you plan to do it.

And when they ask if you won’t bring that value without a raise? Tell them you’ll certainly continue to add value to the company, but that you hope you’ll be considered in the future.

If you’re ready for a raise, and you think a financial incentive will help you manage your team more efficiently and bring in more sales, you don’t have to be concerned about mentioning it to management – but definitely be ready to let them know what’s in it for them, and how it will change your role in the future.

Related posts

New York Sales Salaries: Benchmarks for Sales Reps, Managers, and VPs

4 Things to Prove to Your Boss That Show You’re Ready for a Promotion Negotiation

Salary Negotiation: What You’re Losing When You Sit Back and Let Your Employer Win

close

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)

SaaS Sales are Often Deceivingly Complex – Adjust Your Hiring and Comp Strategy Accordingly

The software as a service (SaaS) model continues to be popular in the tech sector, but many of the companies that adopt this model struggle to get their sales function working properly.  On the surface, the differences between the traditional software model and SaaS appear to be small, so why does is it so hard to get the sales approach right? Because from a sales perspective selling SaaS is fundamentally different than selling traditional licensed software.

To continue reading this post, click here >>

There are three things that make selling SaaS different from selling traditional software.

1. Complex vs. Simple Sales – It is intuitive to assume that the relatively low monthly subscription prices on a SaaS offering, mean the sales function can be staffed by junior reps, but this is not always the case, especially with enterprise software where there might be 100’s of users. Software that might have a $49 per seat monthly subscription across 200 seats will not be viewed as a $10,000 sale, but an infinite commitment and will require senior level buy-in, which in turn lengthens the sales cycle and implies the need for a more senior rep. Furthermore, the SaaS purchase hits company budgets differently than traditional software purchases and for many companies it looks like a very large operational purchase rather than a modest capital expenditure so even beyond price, the buying and justification process is different than what many reps are used to.

2. Hunting vs. Farming – once a new account is closed, the company begins to generate ongoing revenues from the account, but there is not much for the rep to do other than periodically check in. Traditional software reps who are used to closing an account and then working the account for upgrades and renewals are often surprised to find that to be successful in SaaS sales means to be hunting for new accounts 100% of the time (which in turn often requires a different skill set).

3. Commissions and Sales Costs – given the sales effort curve mentioned above, a company cannot afford to incent its sales reps to do anything other than find and close new accounts. Consequently commissions on a SaaS sale trail off considerably after the first year. Conversely,  the high incentive paid to the rep for closing the account throws off the cost of sales in the first year which is tough for many companies to manage.

Many of our clients have achieved success in building sales machines for their software as a service offerings. Here are some of the most common approaches to SaaS sales success:

1. Define Ideal Candidate for the Sales Role Regardless of Compensation –  It may seem counter intuitive to pay someone $150k or more per year to sell a product with a $49 per seat price, but unless you selling “onesies” and “twosies”  you are after large enterprise deals, and you will need to hire someone who can close large sales. Plus they will need to be able to engineer large multi-year operational purchases. This is not typically the domain of a junior rep. Every business is different so don’t make assumptions about what you need but analyze how your sales is different from a traditional software purchase.

2. Build the Team for Complex Sale – Following the example above, remember that your rep is not selling a $49 product even though that is the seat price per month. If you want your rep closing large deals, they should be supported by a team that enables them to focus their time on high level selling activities and closing deals rather than preparing call lists, qualifying leads or doing demos. Best in class SaaS companies often have one, and in some cases, two dedicated  inside sales reps finding and developing leads for the senior rep.

3. Create Incentives for the Reps to Always be Hunting – Best in class SaaS companies don’t stand still. Growth is the key to success, so in spite of how it looks on the books, these companies figure out how to compensate their reps to bring in new accounts. Comp plans need to compensation reps for SaaS contracts over a limited number of years and tail off after the first year. On the other hand there should be bonuses and higher commissions paid for bringing on new clients.

There are many more nuances and we will continue to write about this topic. If you have any specific questions, feel free to leave the in the comments below.

To your success!

relpost-thumb-wrapper

Related posts

2019 is here. Is your salesforce ready?

Salary Negotiation: What You’re Losing When You Sit Back and Let Your Employer Win

Your Best Salespeople to Management Team ?

close relpost-thumb-wrapper

Connect:

Eliot Burdett

CEO at Peak Sales Recruiting
Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.

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.

Connect:

Latest posts by Eliot Burdett (see all)