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03 Jul 2014

Recruiting your first sales person

Understandably, business owners are nervous when recruiting their first salesperson.  This is invariably a relatively high cost resource and sourcing investment for the business.  As with most high reward offerings, there’s higher risk too – the risk of staff disruption or wasted investment costs to name a couple.  However, with a bit of planning, the upside ought to be far greater for the business.

Experienced salespeople should be relatively simple to manage (I’m speaking here as a 25 year veteran sales consultant and manager).  Financially driven, given the right targets, such salespeople should be able to get on with the job in hand and start closing the orders your business needs.  So what’s the problem?

At this juncture, I should qualify the type of situation I’m discussing here.  I’m thinking of a B2B company with turnover less than say £2m (can’t imagine larger companies than this not having at least one salesperson), 10 or less staff knowledgeable of their market sector but not professional Sales operations per se , operational capacity and propensity for growth.  This is quite a common scenario in my experience.

OK, so in this situation, here are some key elements to consider before you get the salesperson on board:

  • Are you targeting account management growth, new name business or both? Typically, it will be new name orders and may include some existing client growth revenue target.  If it is both, then you must make sure that the targets and financial incentive are sufficiently weighted towards new name sales.  Otherwise, the salesperson will invariably gravitate towards the easier sales from existing clients (and who can blame them).
  • Are you generating enough sales leads through your Marketing effort?  If not, then you ought to focus on your Marketing analysis first before you make any investment in a salesperson.
  • Use a contact experienced in Sales to work with you on developing the salesperson’s compensation plan (i.e. their financial targets and resultant financial rewards).  Otherwise, you can be caught out.  For example, should you offer a guaranteed commission element when they start?  Or, should you have an accelerator scheme for over-target attainment?
  • Brief your staff on the rationale for recruiting a salesperson.  Salespeople are often a unique breed and can create antagonism from other members of staff that are more established in the business and typically paid less.  Explain why the business will benefit from this sales activity.  Consider offering extra bonuses for staff resulting from sales orders attributable to the salesperson – less margin for the business but more likely to create a supportive regime.  If you don’t do something like this, a “them & us” culture is more likely to prevail.
  • Pay commission on invoice payment and not issued invoice.  That way, you’ll encourage your salesperson to progress the payment, who will probably have the best relationship for this purpose.

Finally, set up a Customer Relationship Management (CRM) system.  You can source one free online (e.g. Capsule, Sugar) and it ensures that you can check and manage the salesperson’s activity.  Also, if it does all go pear-shaped with the salesperson, you then at least have a database of sales prospects you can use and for protecting your no-contact post termination contractual terms.

(Andrew Parker:  Currently a business adviser with Enterprise First, Andrew is providing here his personal top tips from his earlier career of 25 years of Sales & Marketing, mainly in the IT industry.)