This article was inspired by a couple of small business owners that have approached me recently with concerns about employing their first salesperson. I thought it would be useful to share with others some of the things you need to do before you employ them, and also what to watch out for!
The Challenge……You’re thinking of taking on a salesperson, but you’re not sure how much to pay them, whether it would work, whether you’ll just end up paying for no results, and you’re just not quite sure what to do………..
There could be a number of reasons that you’re considering employing a salesperson. It could be that your business has expanded to a point where it would make sense to employ a salesperson. It could be that you’re involved in a business that requires you to “deliver” the product or service (like consultancy, web design, training etc) and you don’t have enough time to deliver and sell at the same time. It could also be that your sales skills aren’t as good as you would like and that you think someone else would be better at selling than you are.
Whichever it is, and whether you’re thinking of taking on someone part time or full time, the tips below will work for you. Even if you’re thinking of outsourcing your sales to a telemarketing company or similar, some of the tips below will still work for you, although I do have a number of thoughts on what you need to do if you’re considering outsourcing, but that’s a separate article!
If you run your business from home, some business aren’t comfortable with others working from their home, and some employees aren’t comfortable working from someone else’s house! In addition, the environment doesn’t always feel like “work” and it’s too easy for the salesperson to relax, especially if the business owner isn’t around! If they are going to work from your house, have you arranged a separate telephone line, computer and access to your CRM system or database (you do have one of those, don’t you?). Very often CRM or database software carries a “per user” license fee, so you need to think about this beforehand. Also if the salesperson turns up for work and they don’t have a separate phone to use, this can make things very difficult.
If they are going to work from your office then at least it is a more “formal” environment, but if the salesperson is going to be there on their own some of the time, then you can adopt most of the things mentioned above. Also from a security point of view, what safeguards have you put in place to stop them stealing data or customers?
The second thing to consider is are you going to take on a new salesperson, or someone more experienced? If you’re taking on someone fairly new to sales, you will carry some responsibility for training them. Unlike the environment of a larger company, where you have the luxury of putting them next to more senior salespeople to help them “learn the ropes”, in a smaller business where they’re going to be the only salesperson, that obviously isn’t possible. A training plan should be put in place to help the new salesperson gain the skills needed as quickly as possible. The exact skills needed are going to be dependent on their role (telesales or field sales for example) but at the very least consider telephone skills or cold call training as one of the first things to being an immediate return-on-investment.
If you’re planning to take on an experienced salesperson, be careful you don’t make the biggest mistake most small business owners make in this area. That is, thinking “oh, they’ll know what to do” and leaving them to it! Whatever you do, don’t make this mistake. The absolute last thing you should do is leave them to do it on their own! I’ll expand on this more as we cover the other points below….
The third thing to consider is, what is their exact role and what do you want them to achieve? Are you employing them in a “telesales” position, where you’re looking for them to make appointments for you or someone else? Or are you looking for them to make the appointments, then attend themselves, taking the process all the way through to closing the deal? The two roles are different and require different skill-sets, so that will affect the type of person you hire! Also, don’t expect the newer salesperson to be able to go out and close deals face-to-face as well as an experienced salesperson would. Are they going to be predominantly new business focused, or will they have an element of account management to their role? Again, this will effect the sort of person you hire.
You also need to define exactly what you’re looking for them to achieve. An all-too-common complaint that I hear from salespeople is that they’re doing what their manager wants them to do, but the manager is still complaining! This is usually because the manager has not clearly communicated to the salesperson exactly what is required. The biggest thing to cover here is, how are you targeting the salesperson? In order for there to be fewer misunderstandings, you should agree between you (because the salesperson has to “buy in” to any targets set) both financial targets, and activity targets. Now these will differ from company to company, industry to industry and person to person, but generally speaking, you need to set a financial target in terms of how much money you want them to bring in (usually a per month figure) and then activity in terms of numbers of phone calls, appointments generated, appointments attended (if they’re field sales as well) quotes given, and deals won. Only when these have been set can you then compare actual performance against them. Which brings me on to my next point…..
If you agree the targets mentioned above and then they don’t hit them, what happens? If it happens 3 months in a row, what happens? What points below these targets do you consider “underperformance”, and what is unacceptable? How are you going to support the salesperson in achieving these targets (or not!) As soon as you take on a salesperson, to get the best out of them you need to take some responsibility for their motivation as well. No matter what you may have heard about salespeople being self-motivated, in my experience even the best aren’t completely motivated all of the time! If they aren’t working next to you all of the time, consider putting some time in the diary for weekly sales meetings, face-to-face if possible, over the phone as a minimum. In these sales meetings you want to be discussing how the salesperson is performing against the targets you have set, and what pipeline they have – how much business will be converting in the next few months for example.
For most companies, the days of picking up good salespeople on a commission-only basis are over. Or certainly the ones that will stay for any length of time. The majority of salespeople expect a basic wage and uncapped commission as a minimum these days. You can sometimes get salespeople on a self-employed basis, where you pay their company for their services rather than the person themselves. More likely you will be paying the person directly as an employee, which has tax and national insurance considerations, never mind employment law and associated HR issues. The best commission schemes work on a tiered structure, where the level of commission increases the more the salesperson goes above their financial targets. As an example, 125% of target may carry a higher percentage commission, 150% a higher percentage again. If you would like any help with setting commission schemes or anything else contained in this article, contact me through the website http://www.Andy-Preston.com, using the “contact us” page and I’ll be happy to give you some ideas.
In other words, where are they going to get their prospects from? Do you have a list of prospects on your CRM system or database that you want them to contact? Are you going to purchase some data to give them some leads to work on? Or are you expecting them to generate their own? If they are a newer salesperson or they haven’t worked in your industry before, then just leaving them to generate their own might not bring the best results, at least not for a period of time. If you are giving them data, if it’s more than 3 months old, it may need cleansing first in order to make sure it’s up to date. This may also be part of the role you want them to be doing. If you’re buying the data, then make sure it’s been cleansed in the last 3 months, otherwise you’re reducing their chances of success.
The seventh thing to consider is, how long do you want them to work for? This is an important point, especially if you’re looking for them to get more appointments for you personally. If you can only cope with a certain number of additional appointments per week, it might not make sense to employ someone on a full time basis. Perhaps someone in that role one day a week, or one day per fortnight might be sufficient? If they’re starting to make more appointments for you than you can cope with (and the quality is good) then perhaps it’s time to get them attending some as well, and bringing in a new salesperson to make appointments for both of you? Either way it’s a nice problem to have.
I know in some cases business owners like to employ people that they know fairly well – perhaps a friend, family member of partner? Although it can sound like a good idea in the beginning, it can also cause it’s own problems!
The more “personal” the relationship between you and the salesperson is, sometimes the more difficult it can be. Managing their underperformance can be particularly difficult, especially if they’ve been working for someone else, seen how well you’ve done, and think it will be “easier” and “less hassle” to work for you! You can virtually guarantee anyone who thinks in this fashion is going to struggle to meet your expectations and succeed in the role. So what do you do if they consistently underperform for you? If they’re costing you more money to employ than they’re bringing in? Can you see how this might be a different scenario than if it was a “normal” employee.
Consider the implications of having to “sack” a friend, family member or partner. Or if they’re your partner and the relationship comes to an end? Or if the role puts a strain on your personal relationship?
The best way to deal with the majority of these is to set the expectations in the beginning of what will lead to the business relationship ending – lack of performance against the agreed criteria. Try and separate the business relationship from the personal one as much as possible, by getting them to agree on what criteria they will be judged, and the consequences of not hitting that criteria. That makes things a whole lot easier if you’re faced with the situation of underperformance.
Remember, you’re not employing the salesperson out of “charity”, they’re supposed to be fulfilling a role for you. If the role didn’t really exist and you’ve “invented” it so that they can have a job, that’s fine, as long as you’re aware of the implications and consequences of hiring them on that basis (you paying their wage, them not necessarily doing much in return).
Follow the tips above and you’ll avoid most of the problems involved with hiring salespeople. If you’d like further help on this topic, or anything else sales-related, you can contact Andy on 0845 130 6779 or contact us here