A good sales team is an excellent asset to any business. However, due to the nature of many sales team, they are often associated with high turn over, high pressure and typically lower than average levels of integrity. building a sales team.
For any start getting a sales team right, and making sure they productive can be an unweildly beast especially getting the right fit. This article will :
- Help you identify the function of a sales team
- What you need to do before you build a sales team
- What you should provide for a sales team
- How to hire a hire performance sales team
- How to reward and incentivise a sales team which is goal focused
- How to build a great culture
- What to do when things don’t work out
What does a sales team do?
A sales team role can be varied, but it will typically be either:
- Outbound sales focused
- Inbound sales focused
Outbound sales focused: These types of teams will focus on hunting for new business. This is where business is unlikely to come through with lots of enquiries or potential customer walking through the door. Example of this would be new start ups (who need to search out opportunity), or large software sales where decisions are made through relationships rather than making enquiries online.
Inbound sales focused: this is from companies where there is a large volume of inbound traffic. This may be in the scenario of an online comparison site, or an insurance company who would be advertising, and seeing online enquiries be coming through.
Should I build an outbound or an inbound sales team?
There are costs associated with both outbound and inbound sales teams, and what one saves in marketing costs, often is paid for in labour or time. Outbound is often required when marketing is either ineffective or a product niche is quite small that it would be unnecessary to market the product through traditional marketing channels.
Does my company need a sales team?
Sales teams can be costly to establish and time consuming from a management perspective. There are few sales people which require no management, however Lone Wolfs can be a thing in the sales sector.
IF you are deciding whether a salesperson is for you you need to ensure you do the maths before hand as typically there is an adjustment period before a sales person would actually begin to produce or perform.
If you have a low price product, then it is probably best to look at finding ways to sell your product online.
There are ways to sales of your product, but it is unlikely this will be done on a commission only basis.
What to do before you build a sales team?
To get the most out of a sales team you need to ensure the right foundations are in place to make sure that you do not end up with a situation where you have lots of people costing you money, and not making you money.
From a business perspective, sales can be a tricky role to fill especially if you are a founder who has been handling the sales process from the start. This is because if you are unskilled in sales, Founders Charm / Advantage may not be replicable in a sales person.
Therefore, it is important to be clear on the type of customer you are looking to target, and ideally have tested the sales process to a point that you can produce repeatable results (e.g for every 10 people we present to, we end up with 1 sale).
With the ability to NOT produce consistent results may demonstrate that you have not found product market fit. Without that, there is a danger you could spend time recruiting and hiring a good sales person but with the wrong skill set or experience for the target market you are looking to secure.
Similarly, you may find that you simply do not have the skills you need to be able to actually make sales. In this scenario it is important to make sure that you look to hire a competent sales person with a proven track record. For more information on hiring sales people, see the HOW TO HIRE A SALES PERSON section below.
How much do sales people get paid?
There is a huge variety of skill and type of sales people.
Often order takers – people who have worked in large organsiations face a very different sale environment from someone who is door knocking in suburban areas, or may be selling into the C-Suite in organisations.
As such, Sales People often earn around $50,000 AUD for low level sales (call centre basis) through to $150 – $200k for average sales delivery.
Typically the best in industry representatives will earn upwards of $1m + for best in class performance.
Sales people are often paid in two key ways with a base salary component and a performance based metric (or commission). This is done to encourage the performance of a sales person in their role.
In some cases sales people will work on a commission only basis. This can work very well in a high volume sales environment. For longer term sales (with sales cycles in a B2B environment sometimes lasting between 6 – 24 months at a time) a commission only structure may not work , dependant on the financial situation of the sales person.
What are sales people like?
Sales people are typically an interesting and quite diverse group of people. Good sales people are typically powerful communicators, and will have the ability to portray a high level of confidence. Because of this, through due diligence is important with sales people.
Sales people who have stayed in the indstry for a long time, can vary in quality and ability. There are typically three architypes:
New, keen: often unskilled, highly enthusiastic and motived by financial reward. They can be easy to mold, and if trained well can produce excellent results.
They will come with no bad habits, and so are often very coachable
Longer serving, know it alls: the ability to earn good money, and a low barrier for entry can make an industry like sales very compelling for a lot of people. For people who stay in the indsustry for a long time, a level of average capability can be common. Also, due to “experience” they believe that they know the right approach, and result in dealing with large ego’s which can be cumbersome at times.
High skilled, highly driven, sales gurus: The best sales people in the industry are a highly saught after resources. Over time they build up a large network, and provide company with the ability to reach market segments very quickly and in a way which would otherwise be inaccessible.
What you should you provide for a sales team?
In a start up environment it is common for a company to not provide any equipment to a sales person, and simply have them use their own computer and mobile. It is encouraged to provide a mobile phone plan with a seperate number which stays with the business.
This will help the sales person differentiate the calls he received but most importantly assists the company to ensure if a salesperson leaves clients atill have an operational number which will continue to go to you.
I have found that clients will call me many months after I have left a company, and state they are now ready to proceed with the order. If you sales person has moved on to a competitor this results in lost revenue from marketing or work you paid for.
Similarly providing your sales people with a team email to use especially in the initial weeks of employment can make sense. For example, give them access to: email@example.com or firstname.lastname@example.org as if a sales person leaves early on it prevents you from having to go back and filter through their personal email, or agin the client emailing your old salesperson, by name.
In short – until your sales hire has demonstrated buy in, you should be wary of them leaving or you needing to remove them early on in their engagement.
Protecet your business, and even though it can be tempting to save money on the small things (like providing a SIM card or company number) it will almost always provide a handsome return.
How to Hire & Build a sales team:
Once you have established a strong base of leads and consistency through your sales funnel it is now time for you to move forward and hire your sales team.
First of you need to ensure that plan the approach you will take.
Step 1: A key hire will be your first sales person. You need to ensure you know whether you need a Outbound Sales Person ( a hunter type of personality) who will chase down deals, and find new contacts, leads and opportunities for your company.
If you need this type of personality you must be very careful you do not hire a successful inbound sales person. Whilst they may be a good sales person, you will find they will be most likely ineffective because they simply do not understand the different type of sales approach.
I once was consulting for a airbnb rental company and they needed a hunter personality, to go and build relationships with key referral contacts. They however had hired a competent (or so he claimed) internal sales person who was far more comfortable converting leads which had come through from his previous companies website. Worse still, the company had given him the title Sales Director and he was being asked to “lead” the other new sales team members.
Regardless to say this approach had not resulted in producing the results the company wanted, and left them bemused thinking salespeople were useless. This also left the employee feeling useless because he did not realise the difference between outbound and inbound sales.
Step 2: Once you are clear on the type of sales person you need, have a look at other job adverts advertising for sales people. This is the simplest way to create an effective job add, and simply personalise the requirements you have for the role.
It is best to replicate job adverts of companies within your industry, and ideally of your competitors.
Som unconventional approaches is to actually apply for a few sales roles, and then if they call you ask them to send through the full role description. This can prove valuable for when you come to interview the candidate, and will ensure that everyone (especially you) are clear on what it takes to hire people.
Step 3: Calculate the base income you can afford, and then find a way to ensure the commissions are big enough that you can attract talent.
Commissions should be uncapped (as explained below) however structured in the right way to help ensure the sales person is bought into the longer term vision and is equallty rewarded to stay with your organisation.
Step 4: Place advert on the main recruitment channels and I encourage you to add it to the bracket which attracts the highest income applicants. (obviously – if you only need a low skilled sales person, this wouldnt eb suitable).
Request that they specify some of the sales results they produced for businesses in other industries. Also state, that reference checks will be carried out on all nominated candidates.
Step 5: when reviewing applicants CV and resumes look for relevant experience. Be careful not to be too sucked into the “success” metrics they claim, as there can be multiple factors how and why an increase of sales can occur. Sales people will instinctively think and often claim it was them, which in some cases it can be.
Step 6: Hold a short conversation with your shortlisted candidates who have relevant experience in your sector or industry. Call them out of the blue, and hold a short 5 – 10 min conversation to hear how they sound over the phone. Ask them questions like: From what you know of the role, how do you think your experience is relevant?; What interests you about the role?
Given that job applications these days are much easier, it is common for people to apply for lots of roles all at the same time. Be ready to recap your job, and outline the job advert you had to remind them.
At this stage you are checking to hear HOW they sound over the phone. Do they come across as professional. Do they sound like the kind of person you want to represent your company? You can usually tell within the first 30 seconds, and see how they make your feel.
You also want to look out for people who turn the conversation around and ask you questions about the role, or ask you which part of their experience caught your eye.
Step 7: Tell them you are currently conducting phone interviews and successful candidates will be contacted for an in person interview.
Step 8: Because the hiring environment can be very competitive these days, focus on inviting around 5 – 10 people to interview.
If you are recruiting a sales team you may want to hold group interviews, to cut down on hiring time. I find that only 50% of turn up who you invite to interview because they will often apply to different jobs and or go cold on the idea.
If you recruiting 1 special person over many – you should focus on interviewing 5 people for a one one one. Inform them they should dress like they were meeting a big client. This is a test to understand how they dress for formal clients and how they present in person.
Step 9: Print their CV and cover letter if you have it. The best interviewees will come with a thorough understanding of the issues and challenge you will face as a business. They should come prepared to discuss why they think they would be a good fit for your role, and how they envisage they would be able to
Step 10: Ask questions regarding to their experience and ask about the measurable results they were able to produce for clients. They should know their numbers well, and be able to talk about the strategy they took. Ask them whether their previous company would be able to validate these results.
Ask also for about their biggest failures, and how they overcame these challenges.
Let them know that you will be using a mix of activity metrics, and billed revenue to reward and this will be measured through the CRM.
Red flags to Look out for people who look to make excuses, or blame external circumstances for why things didn’t work out. A key focus for sales people is to be introspective and to focus on the things they can control rather than to blame outside circumstances.
Step 11: Contact their previous employers or the clients they have worked with to validate the results they have made. Whilst the company may not wish to discuss numbers, you can ask whether they think the sales person contributed to the success of the company or not.
Step 12: Once validated, pick the person who scores the most on proven track record, likeability, and ability to sell themselves to you.
Step 13: IT Skills in the modern world can be highly variable with people. I have found that senior people
Step 14: If funding allows – hiring multiple sales people for a trial can be a great straegy, and let them know that the best will be selected for the role.
Advice: move quickly, and be decisive. Good sales people will be direct so be ready to be transparent about where your company is at and the resources it has available. People will apply for lots of roles, so do not be surprised if your best candidates drop off towards the end. Like with sales you must have a pipeline of candidates available to you – otherwise you will be impacted by people who change their mind or take a better offer.
Do I have to pay commissions?
With software sales and finance sectors paying big bucks for the best sales people in the industry, attracting great talent to a startup or new business can feel like a impossible task.
However, an overlooked tool for persons trying to access a massive market
A common concern with small business owners is paying commissions. IF you want to grow your business, you need to learn to love commissions.
What is a commission: a commission is a portion of the sale price which is paid on the completion of a sale. Some commissions are bulk amounts (one-off payments) others are trailing, so they are paid over a series of months or years.
Business owners often get uncomfortable with sales people earning commissions, especially when that sales person may end up earning more than the business owner. Whilst most business owners will say this does not affect them, when the money is sat in the bank, the urge not to pay can often be too tempting to resist.
I once worked with a client who I proposed an arrangement where I would help bring in $6.76m revenue into the business. In return for this I would have been paid $500k or 7% of the revenue figure. This would have been approximately 20- 25% of the profit they would have made.
At the point of negotiation the actually results were hypothetical and were based on a best case scenario.
However even conceptually, the owner felt that amount was too high to be paid to a “sales person”. He missed the point where he would have made $2m gross profit from the new business, and helped him grow his business exponentially, for little to no extra effort on his part.
Whilst this is an extreme example, it highlights a common problem with inexperienced new business owners.
This is often heightened if they have been bootstrapping and are living off the scraps which are left after trying to keep their start up alive at any cost.
There are lots of incredible sales people out there who are dissatisfied with their high paying software sales role, but stay put due to the comfortable pay pack which keeps flowing into the account.
If you have the right product, and want to launch your product into the next stratosphere – then a good sales person can do exactly that.
If you are running a startup company the right salesperson can dramatically shift your business, and you can do it with a shared risk and reward model with the sales person.
Remember commissions are paid when you have actually made the sale! So when you get paid – you share the love.
If you hire well, they can find a sales person with a proven track record, an existing client base, and great connections within the industry you are trying to break into. And you can offer a sales person a life income which would be otherwise impossible.
“Oh but marketing can achieve the same result!” the digital marketers cry.
But what’s the #1 priority for small business. Cashflow.
So I ask, would you rather:
- a) pay upfront for unknown results? (that’s marketing)
- b) pay only for confirmed deals, when you have the extra money in the bank (that’s commissions)
Most people see commissions as a cost.
This is completely wrong.
Commissions are an investment with a protected and calculated low downside. You pay a fixed amount (that’s the base wage component) with the chance of a high upside (that’s the commissions which you only pay when YOU get paid).
Its like the most basic Joint Venture structure, where the sales person and you share the “risk” and “rewards” as they can’t make big money without you, and vica-versa.
I have seen crap companies beat great ones, simply because they sell better. And in sales, its all about quality of people not quantity as the 80:20 rule strongly applies in this sector. 80% business will be delivered from just 20% of the sales team. It’s often even 90:10 with top producers propping up of the others.
So focus on the money YOU will make.
Not the money you may have to PAY OUT.
And unleash your startup.
How to hire a hire performance sales team?
Creating a high performance team, comes with setting the right expectations from the start
Like with hiring any role, getting the right fit is critical.
How to reward and incentivise a sales team which is goal focused?
How to build a great culture?
What to do when things don’t work out?
How many people do I need?
What skills do they need?
How to structure a sales team?
How do I motivate them?
Things to look out for:
Hiring strategies & approaches
Metrics and KPIs
What to do when some one screw up?
The importance of sales leadership