Questions to Help You Mind Your Business… Question #4
Question #4: Should I hire a salesperson?
This is the fourth in a series of thoughts and opinions by Graham Edwards and Renée Cormier — click here to read the backstory and inspiration (if only for the entertainment). It should be noted that neither of us have seen or discussed our answers before they are posted, which in our mind makes this all the more interesting.
In this blog series we will attempt to answer ten different questions business owners may need answered, using our individual and unique perspectives and approaches. It is our hope that this series will inspire both action and interaction. Please feel free to comment and ask more questions.
Graham — Why at any level would you want to hire a sales person, let alone a team of them? They are costly, high maintenance, hard to keep track of, and depending on who you ask come with a questionable ROI — spend your money on marketing people! Wait… did I actually say that? I need to use my inside voice more.
To get to the heart of this question it should be made clear that everyone is a salesperson — we are always selling ourselves in that job interview, selling that great idea to investors, selling friends on the art gallery instead of the concert, selling the idea of a new house to your spouse, or even sometimes selling a product or service for a commission cheque. Title or no title, we are all sales people; it is simply a matter of how much formal training you have received.
You simply should hire a salesperson anytime you hire someone —
- Someone who effectively communicates
- Someone who listens effectively
- Someone who is able to ask good questions to understand a situation
- Someone who is able to bring solutions to problems
- Someone who is analytical and a critical thinker
- Someone who is customer centric
- Someone who is trustworthy
This is where Renée would push me off my “philosophical hobby horse” and suggest I actually answer the question — so with her in mind, here goes.
I think it is important to mention right away that there is a “less than professional” image that still clings to the word “sales” (echoes of the questionable door to door salesman I suppose). So much so, even true sales professionals refer to themselves as advisors, consultants, account managers, influencers — almost anything so they do not have to use the word sales in their title. Although, I do appreciate that there may be a customer perception that necessitates the avoidance of the word, it should be made clear that if your role has a financial expectation (that impacts part or all of your compensation) you are in “sales”. And quite frankly, if you are able to satisfy a customer’s need (or solve a problem) they really don’t care what your title is.
To the question of whether you should hire a sales person or not, it is really dependent on a number of factors and considerations:
- How complicated is your product or service?
- The price and value proposition of your product?
- What is your business model and who is your customer (an end user, a business, a government)?
- What is your marketing budget (because the sales channel is part of the marketing mix)
- Can you get at least a 15x return (on gross profit) if you hire a sales person? *
- Et cetera…
A sales person can do four things that are holistically unique to the function, and part of the consideration when thinking of your needs for the business:
1. They can deliver a complex product and value proposition message.
2. They can build deep customer relationships.
3. They can offer real time customer, competitive and market information.
4. They bring “forecastable” revenue commitments.
Some will argue that other functions can also do this, and I agree there are a number of groups that actively do the first two, and maybe even some who can do the third, but only sales can do all four (as well as scale).
Truly the biggest consideration to the question is, “Are you prepared to take on the leadership and management to ensure the person (the team and sales channel) is successful?” The cost of not doing it right is high — not only in hard cost, but also regarding reputation, customer perception, and competitive advantage. You need to be prepared to build a structure, the leadership, and operating mechanisms to satisfy the following eight sales competencies (and the behaviours that demonstrate them) within the organization.
Territory and customer management
Selling skills and knowledge
It is with these eight competencies that you increase the probability of creating a successful sales channel and the people within it — and as I mentioned, you will develop transferable skills that can used to support the growth of the broader business.
I think the better question to ask is, “Are you ready to hire a sales person?"
* People may not agree with this ROI for a sales person, and I would like to get other people’s perspectives but the spirit of this point is that a salesperson is a profit center and there is an expectation for incremental increases on the top and bottom line.
Renée — I often come across small business people who hate being their own sales person. That always seems ludicrous to me, but on another level, I do understand it. Sales can seem tedious when all you really want to do is deliver your product or service, but you can’t have one without the other. Selling needs a product and a product needs to be sold.
There's no lotion or potion that will make sales faster and easier for you - unless your potion is hard work.
So how do you gauge when it is time to hire someone to help you out?
- You have more leads than your current sales team (or you, personally) can manage.
- There is a large segment of the market you are not able to reach due to the lack of manpower.
- You are currently generating enough revenue to pay a reasonable base salary to a qualified sales person.
Now the last point is really important. 100 % commission jobs are not realistic for most sales people, because most people have an immediate need to eat and pay the bills. This type of compensation system becomes especially ridiculous if you can’t even provide qualified leads to the salesperson. If your business model is such that you expect people to work this way, then you will have a problem keeping sales people. Also, bear in mind that a company that does not respect the time and basic survival needs of their employees puts itself in jeopardy. Nothing is worse for your business than desperate, resentful employees. Consider the value of investing in the well-being of your staff by actually paying them fairly and setting them up for success. That’s an investment that pays dividends.
Speaking of setting your sales people up for success, make sure you don’t put the cart before the horse and just hire people without giving them the resources they need to be successful. You will need to have both a marketing plan and a system in place to generate leads and help you manage the pipeline. Your systems are important. Having said that, leads are only part of the equation. Sales people need tools like sales decks, and samples to help them guide conversations and close deals. They may also need some training. You don’t want your leads to walk over to your competitor’s business because your team didn’t have the wherewithal to service their needs.
These days, it seems everyone in business wants more for less. Your business is nothing without an effective marketing strategy and strong sales people to maximize your results. A lot of small business people think it is okay to hire their 18 year old niece to manage their social media because “kids are all on social media these days”. Here’s a news flash for you. Knowing how to use a social media platform and knowing how to maximize your content for business purposes are two very different things. Getting a kid to do your social media marketing because he knows how to use Instagram is as logical as getting a kid to write your financial plan because he took math in high school. Give your head a shake. Do you want to make money or waste money?
So let’s go back to the original question of whether or not you should hire a salesperson. The answer is simple. Don’t hire anyone unless and until you are in a position to effectively support their efforts and ride out the natural length of your sales cycle.
Thanks to the social media platform beBee, Renée Cormier & Graham Edwards developed a business relationship and friendship that typically involves regular meetings, goal setting sessions, etc. Our meetings often provide the fuel for plans around business strategy, blog ideas and more.
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