What about hiring a salesperson?

Many of my clients want to hire a salesperson. They figure they are not very good at selling, so why not hire somebody.

In my opinion, this can be a huge mistake. Here’s why:

1. Salespeople take a lot of energy to manage.

2. Salespeople are not “magic bullets” that instantly sell for you. You have to provide them with tools, expectations, a good compensation structure, a good solution set, and marketing collateral.

3. Only about 1 in 5 or 1 in 10 salespeople are any good. The rest are no better, if not worse, than you.

4. It is very hard to find that 1 in 10 who is great, and harder still to keep them happy with you. Most great salespeople are gainfully employed and earning great money.

5. You have to distinguish between salespeople who generate leads and those who manage accounts. The former (getting leads) is the most valuable, because these people don’t mind making calls and visiting strangers. But you have to watch out for the people who love going to networking events and “schmoozing.” They are often worthless.

6. You need to know how to ask good questions about pipeline management and activities to keep the salesperson honest and accountable. Few technical people do.

In my opinion, it is far better for you to master marketing and sales as a professional, develop a system and then — when your firm is big enough, start recruiting a salesperson. In other words, don’t abdicate the sales and marketing function.

If you have had a good experience with a salesperson, please post it here, including what you did to make it work out for you.

(P.S. See my new web site as listed above in my bio if you haven’t already. I’ve taken itprosuccess off and put in its place a new site. Your comments to me via the email on that site are welcome, but need not be posted here at Sitepoint).

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  • J8Cruz

    I found the article useful except I did not fully understand point number six.

    6. You need to know how to ask good questions about pipeline management and activities to keep the salesperson honest and accountable. Few technical people do.

    Mr. Neitlich, can you please explain what you mean? Can any readers provide more explanation and/or examples of what is meant by pipeline management and activities. Thank you all.

  • http://www.netmaking.no Eirik

    Your post caught my eye as I’m currently in the process of hiring a sales person myself. And though I feel that several of your “don’ts” are valid, I thought I’d might share why I’ve decided to to it anyway.

    1. Salespeople take a lot of energy to manage.

    So do any staff you hire, whether its a designer, a programmer or whatever. However, once the sales person learnes the ropes, he/she should be well equiped to work on his/her own.

    2. Salespeople are not “magic bullets” that instantly sell for you. You have to provide them with tools, expectations, a good compensation structure, a good solution set, and marketing collateral.

    True, but these are all elements that should exist in a business, regardless of whether one is planning to hire a sales person or not.

    3. Only about 1 in 5 or 1 in 10 salespeople are any good. The rest are no better, if not worse, than you.

    What I’ve done to try and overcome this obstacle is to team up with a friend of mine who has several years of experience as a sales manager. Through his network, we are able to get in touch with sales people that we now for a fact can outperform most.

    4. It is very hard to find that 1 in 10 who is great, and harder still to keep them happy with you. Most great salespeople are gainfully employed and earning great money.

    This is the hardest one yet. However, most of the people we’ve contacted so far have been very open to our offer, and the ones who have turned us down have had very specific, personal reasons to do so.

    5. and 6.

    I’m planning to use my sales manager friend to help me with these issues once the person has been hired. Also, during the process of getting everything ready for the new sales person, I’ve come to make myself more aware of these issues. I have, among other things, setup a CRM system, which makes these issues very visible.

    This being said, I’m not hiring a sales person because I’m not getting enough projects, but rather because my plate is full, and I can no longer cope with both selling and producing web solutions.

  • Anonymous

    Spelling error in the article title should it not be “what” instead of “wht”?

  • http://www.eleytech.com beley

    I couldn’t agree more. One thing you didn’t hit on that much was that a sales person is really an extension of your company, or you. When they call on peoele or firms, they are representing your company. If they are pushy, annoying, rude or just horrible at what they do it will reflect on your company as a whole.

    I have had a lot of people ask me why I’m trying to find developers when I tell them I spend most of my time meeting with clients and working on proposals. They think I should just stick to development and let a salesperson handle that part. I won’t ever do that primarily because I want to control my potential clients’ first impression of my and my company.

    Another issue is skill… in our industry a sales person must be extremely knowledgeable about what we do, and how we can help our clients. I worked for a web development company several years ago that hired a sales rep. He was okay at getting new business, but he would often promise the impossible not understanding the technical aspects well enough.

    But also, I enjoy it. Most business owners will eventually enjoy the sales process. There’s nothing like controlling your own destiny – being able to land big projects and clients is exhilarating.

    I used to be an introvert. Now, sales is my favorite part of the business. I love meeting with potential clients, learning about their business and finding out how I can help them.

  • http://www.tswinteractive.ca/ Pavel_Nedved

    I have a few points…

    While I do agree with what you’ve said, I still am not convinced that having a staff member completely dedicated to sales is going to be a bad idea.

    As far as I’m concerned, if your work is good, it’s just a matter of getting out there and speaking to the right people. If you hire a “sales person” to do that for you, then you can focus on doing the rest of your work.

    I don’t personally have a sales manager in my company. I really enjoy the sales process, and so I act as our sales person… but then work around the office slows, because I’m our only programmer (and I would guess most people here take an active roll in the web development process in either design or programming also).

    To be able to deligate that distraction to someone (even if they’re less qualified, or not as good) will help your business run more efficiently.

    That’s it… just thought you had missed that point in the article, and I think that’s where most people are coming from.

  • hdsol

    I agree with Eirik. I plan on doing the same thing starting early next year. With my plate full of projects I felt that it is far easier to train somone to sell and manage projects then it is to hire a programer/designer. Both come with added costs and chalanges. By putting a compensation structure that is tied in with productivity ( commision, bonuses, ect..) you give the sales person reason to perform. No work, no pay. Put honest effort in and you shall be rewarded. As my business has grown I have quickly come to relize that I cannot do it all. My talents are in programing and to not have to do client courtship is very apealing.

  • JerryG

    Hi Andrew

    Your new site is down: fastmarketingresults.com

    Jerry

  • Thirteenva

    There have been a couple people on here that seem to discount some of the better points Andrew made. I’m a terrible sales person and I’m so glad we have people on staff here to perform that duty competently and I think many people need to hire sales people to help them out.

    HOWEVER, what scares me though is that so many people here don’t realize the undertaking of doing so, or really understand how to hire/manage a ‘sales team’ they’re not part of.

    Andrew’s first point is valid, if you think managing a sales person will be easy then you’ve either never managed a sales person, or you haven’t managed at all and simply think management in general is easy and mostly just delegation. Hiring someone and delegating sales responsibility to them is not managing. Sales people can be some of the most time intensive people to manage, not because of the people, but because of the job. Much of it has to do with the fact that much of the sales process is not tangible. Some of it has to do with the volatility of the sales cycle. Things like building relationships, and selling big contracts takes time. Sales cycles can be long and time intensive. Other than tracking our sales persons meetings and phone calls there is no other way to measure daily productivity. If you think you can measure a sales person’s performance solely on contracts then you’ll see soon why that won’t work. There will be times when multiple contracts get signed in a month, and there may be month’s where no new contract’s get signed. The key is knowing if your sales person is consistently productive even if new contracts are not being signed. We know if that they’re building new relationships, keeping in touch with existing customers to extend additional offers and generating new leads. This is very time intensive for a manager to track.

    It is not a matter of ‘learning the ropes’ and working ‘on their own’ as someone suggested, but that person will find all this out shortly. Just because someone knows what they’re doing and is capable of working independently does not mean they don’t require guidance and management.

    Keeping sales people motivated is a far cry from simply negotiating a good commission. If you think this is the case then you’ll have a lot of turn over in your sales force. Droughts happen… its just part of the sales cycle, especially in a small company. During this time you need to keep that sales person motivated to avoid extending the drought, in addition you’ll need to review their productivity to see if they’re underperforming (usually not the case), or to see if their chasing bad leads, not finding new ones, spending too much time trying to close a dead lead, etc…

    Compensation and motivation are a tricky thing as well. Many people want to pay sales people solely on commission. They view it as ‘pay for performance’. This is not good, there is a lot more to sales than just closed contracts. You’ll build way more relationships than you’ll close contracts. Additionally, I find that if sales people depend greatly on commission for a salary tend to go for small quick sales that can be closed fast, rather than cultivating good long-term relationships that will result in bigger contracts because these take much longer to close. They’ll go for the low hanging fruit to guarantee a pay check.

    Finding good competent sales people for a salary that a small business can afford will be difficult. This is a fact, it does not matter who you have helping you interview or who you might know. Very few sales people can sell… its just a fact. Some are good at generating leads, some good at establishing a relationship, but very few are really good at going from a cold lead to a relationship to closing a deal.

    Sales are THE most important thing within your company, without sales you are out of business. Someone mentioned ‘delegating the distraction’ to someone else. If you feel sales is a distraction you are in trouble. Hiring a sales person so you don’t have to deal with sales is a bad idea. You need to be on top of sales every day, not my micromanaging, but by helping define the direction of sales, getting feedback from your sales team and giving them the tools they need to succeed.

  • bcm

    What do you think about outsourcing your sales department to a sales firm?

    I’ve recently been speaking with a few companies that specialize in b2b selling. They have experience selling technology solutions, I believe a company like this could be effective.

    The cost for one of the companies is about $3,500 a month for 3 days per week. This includes a sales manager running your campaign, and two sales associates.

    $3,500 a month sounds pretty expensive but if they could land 5 web design projects at 2K a piece it seems pretty profitable to me….what do you think?

    Thanks a lot.

  • http://www.netmaking.no Eirik

    It is not a matter of ‘learning the ropes’ and working ‘on their own’ as someone suggested, but that person will find all this out shortly.

    No one here, myself included, is suggesting that hiring and managing staff is a walk in the park, whether that person is selling, coding, designing or whatever.

    My intention was, however, to give a different perspective to some of the points made by Andrew to show that, if done correctly, and with the right motivation for hiring, it might not be such a bad idea.

    Personally, I’m not hiring a sales person so that I can dump the sales process on someone else, but rather because there are only so many hours in the day, and I personally feel that my company would benefit from me focusing my efforts on development rather than selling.

  • http://www.lowter.com charmedlover

    I think that you need to have a secure profit stream before you even think about hiring someone else.

  • aneitlich

    jerry,

    Site is up when I try it:

    http://www.fastmarketingresults.com

  • http://vervose.com.au/ jmaonline

    Interesting topic as I’m currently scheduled to meet with a sales & marketing services company rep. Has anyone had much experience in outsourcing sales and marketing activities for their web business? If so, can you tell us how it went? was it worth the money?

    Thanks in advance. another great post Andrew!

  • Anonymously

    Has anyone had much experience in outsourcing sales and marketing activities for their web business?

    Yes, it can work short-term, but going in house is better due to the overhead of remote reporting and management… Why do you want to outsource?

  • WebDevGuy

    Thirteenva – how did you find that b2b sales company?

  • WebDevGuy

    I meant BCM – how did you find the b2b sales company?

  • bcm

    WebDevGuy – I found them on Google.

  • mjc

    I agree with Andrew on this.

    Pavel, if you’re good at sales & coding hire another developer – your better qualified to judge a coder so you’re more likely to end up with a good employee.

    The same goes for you hdsol – what makes you think you’ll do a better job of getting a salesman than a programmer? I’ve done sales but I’m a good coder. I have NO idea how to select a salesperson but I can get a good coder 80% of the time (based on past experiences).

    Nightmare story from a friends’ company. He decided to hire a salesman & found a decent person with extra graphic design skills valuable to his web company. They wanted to work from home which was allowed. I don’t know the exact remuneration package but it was base salary plus bonus.

    Long story short, the salesman pretty quickly landed a commission-only job with a competitor (simultaneously) & filtered all the best jobs that way because of the higher commission.

    You could sue but where would it get you?

  • Anonymously

    Long story short, the salesman pretty quickly landed a commission-only job with a competitor (simultaneously) & filtered all the best jobs that way because of the higher commission.

    Hince the end to go in house and have good intellectual property controls in place… As NDA/NC agreements, if there is proof offer a settlement and if they don’t bit take them to court.

  • hdsol

    mjc,
    I guess that I should also state that the sales person I have in mind is somone I personaly know and trust. He has an extensive background in sales and marketing. We are entering into this on a trial basis and If all goes well there is long term stake in the company.

    I would feel skeptical about bringing in a person whom I did not know. What ever person deals the client will establish your business reputation. Once the deal is signed it is the quality of the work that will gain the happy client. As we all know a happy client will often refer.

    I don’t envision removing myself totaly from the client but decreasing my work load per client so we can handle more clients. I feel that this is a needed step in my transition from a small group that can handle a few clients at a time to one that is constantly running. Right now my business runs in cycles. I do a few projects. when they are almost complete I start looking for the next projects. I think that by bringing in a sales/customer managent team member I can run more jobs concurently by not having to stop production to look for work.

    My reason for not hiring another programer is simple. I realy enjoy that aspect of this business. My current life situation makes client contacts difficult at best. I have 4 kids and a wife in school. I can do computer work at home but who wants small children running around a board room. (not me) This is all about the growth and development of a business.

  • mjc

    Hince the end to go in house and have good intellectual property controls in place… As NDA/NC agreements, if there is proof offer a settlement and if they don’t bit take them to court.

    What can you get back? The salesman only got a percentage of the work that he redirected to “Company B” as far as IP’s concerned; as far as I know all he was doing was redirecting hot leads not stealing IP. I doubt (unless you could prove that they incited the action) that company B could be targeted – even though they were the ones that benefited most.

    As far as I’m concerned the moral of the story is be very careful as a nerd when you hire salespeople (I hear & understand you hdsol – what you are doing makes perfect sense given the extra information you provided) We understand the technical side much better than the sales side & understand how to motivate techies better than we know how to motivate salespeople so there’s the double problem of a) how do you find a good one? & b) how do you get the remuneration right? It’s a problem best delayed until you have the resources to “hire five & keep one”. This gives you the added advantage of understanding more about marketing & sales when you do get around to hiring.

  • Anonymously

    What can you get back? The salesman only got a percentage of the work that he redirected to “Company B” as far as IP’s concerned; as far as I know all he was doing was redirecting hot leads not stealing IP.

    All depends on your NDA/NC… Did you have any with them?

  • Anonymous

    It’s great that I have come across this because this is something my business has gone through before and a challenge for the future….

    Basically I run a small web development business and things are going very well. We are very busy and I feel that I am a bottleneck in the company as I do all sales, project management, running the business and still some coding.

    I thought a sales person would be a great addition to our team, not because I didn’t want to sell myself, but to get another sales person to sell along side me to free my time up to run the business.

    We did have a sales person join the company but it quickly became obvious it wasn’t working.

    When I go to see a sales lead their requirements are always unique. They may have an existing system they want to link in to, they may have very specific ideas about what they want, they may have very unrealistic expectations about SEO results. I find that I usually build up a solution in my mind whilst I’m with the client and this leads me to ask appropriate questions based on this technical knowledge.

    I found that the sales person couldn’t do any of this because they were not technical at all. I found that they were constantly trying to pull us in a different direction to where we wanted to go. They wanted to offer cheap websites in large number as they would be easy for them to sell.

    Where they did manage to get a brief from a prospect they would invariably return to the office wanting me to intepret it and do the proposal for them. I was paying someone commission to go and write notes in a meeting on my behalf!

    In the end we parted company and went our seperate ways. The frustrating thing is that if we could find the right person then it would be great. We need someone that is good at selling but has a good understanding of what can be done and what questions to ask.

    Any advice would be much appreciated!

  • mjc

    All depends on your NDA/NC… Did you have any with them?

    Dunno, I’m relating all of this second hand – it happened to an ex-collegue in England, I’m in Australia.

  • Anonymously

    @ mjc

    Dunno, I’m relating all of this second hand—it happened to an ex-collegue in England, I’m in Australia.

    Hmm… Ok, that really doesn’t answer the question.

    NDA/NC agreements
    would be the key barrier for such an attack. As for the value, it would be based on damages not realized value; which could included, but not be limited to, the lifetime value of the client relationship.

  • Anonymous

    I found that the sales person couldn’t do any of this because they were not technical at all. I found that they were constantly trying to pull us in a different direction to where we wanted to go. They wanted to offer cheap websites in large number as they would be easy for them to sell.

    our company has joined a JV with a larger marketing Company. Gun sales people. Sell millions of dollars of product a year. I developed a range of good webpackages as well as a full range of custom highend solutions.

    After a year, they have only sold a few small cheap sites. I am leaving and will be dedicating “x” amount a week on business development a week and “x” amount on production.

    However, i will always be on the lookout for the “right person” to manage the sales side to build the business

  • Anonymously

    @ Everyone

    Anyone had any experience using bulk posting for commission only sales or franchising web services? If so, what was your approach…

  • http://www.custom-toolbars.com milette

    Some people NEED to have a “Face”.

    I know a guy who’s a great programmer and developer, but he couldn’t sell his way out of a wet paper bag. He has the interesting personal characteristic of making some people want to kill him within the first few minutes of meeting him.

    For these kind of ‘geeky’ / ‘unsociable’ people — it’s far better to keep them in the back office where they can deliver the goods. NOT ALL PEOPLE should be selling. Some people hate it, and/or will never be good at it.

    Marty R. Milette — Custom Toolbars

  • febwa

    Jim McLean wrote this post recently:

    Improving the Success Rate of New Hires – Two Logical Assumptions and How to Challenge Them

    He maintains that there are two assumptions that should be challenged when hiring sales people and goes on to describe some helpful management tools for challenging these assumptions.

    Assumption #1: The new person has been successful in the past, therefore he or she will be successful in the future.

    Assumption #2: We won’t have to train the experienced salesperson – they are already trained.”

  • Anonymously

    @ milette

    NOT ALL PEOPLE should be selling. Some people hate it, and/or will never be good at it.

    Why would you say that? Everyone should be selling all the time. If they cannot, they don’t belong anywhere…

    @ febwa

    Assumption #1: The new person has been successful in the past, therefore he or she will be successful in the future.

    Yes & No – it depends on how you define “successful in the past” – If it is by purely being successful, then yes, that is true and is called luck. If you mean that they defined and created success, then no, since this is not something that can be learned and is a very good “bet”…

    Assumption #2: We won’t have to train the experienced salesperson – they are already trained.”

    Everyone is training all the time, this is just silly…

  • febwa

    Anonymously,

    Suggest you go and read the link as posted above as it fully addresses the two assumptions which are relatively complex and goes to your response which is an oversimplification – and one that experienced managers make repeatedly.

  • zbatia

    Let me share my experience and I’m sure it will give you some idea what to do.
    “Compensation and motivation is tricky thing as well” – the correct phrase! It is where I’ve been burned.
    I’ve hired a bright, African-American woman with good personality and knowledge of the industry. I paid her 10% commissions from the gross (!). The first year my contracts doubled and I even increased her base compensation by 7.5%. I tried to keep her happy, placed her in the separate, nice furnished office, with great PC + software, and basically gave her a freedom (just bring me the contracts!). I thought that

    To the end of the second year, I found that there is a big problem.
    First of all, my saleswoman was running the side business right from our office. But the worst thing was the fact that she forged the documents in order to get her commissions when she was not able to get more contracts.
    When she felt that there is no way to hide it from us, with $24K that I paid her in commissions for the contracts (she did show them to me with signatures) she has disappeared claiming additionally the commissions on the sales that never actually happened (as I found later). At this moment I overpaid her about $25K + provided the preliminary work for the clients at about another $70K not knowing that the contracts itself were forged with customer’s signatures and those “paper” customers did not exist! When, after investigation, I refused to pay any commissions to her she send the claim to the Credit Bureau. How do you like this turn?
    Moral?
    • NEVER TRUST 100%
    • Always control the timing
    • Contact/meet your potential clients personally right after the received lead or signed contract.
    • Never pay money in advance, only upon the customer paid for the contract (even if your salesperson is not happy about it)

    Best in your business! I hope this story will help you.

  • http://www.tswinteractive.ca/ Pavel_Nedved

    Personally I’d rather hire web guys to deal with the web site, and leave the sales to me.

    A salesperson isn’t going to care about your business as much as you do. If you can get over nervousness, and realize that you’re doing the prospects a favour just by being there (You’re trying to make them more money afterall), then sales will become easy.

    Nobody is going to be as enthusiastic about making you more money than you.

  • sales guy

    As a sales person that sells online advertising, this article seems a little short-sided to me. There is a very big difference in being able to run your own business, and being able to code websites. The two skill-sets are not necessarily mutually exclusive but they are very distinct from each other.

    Managing a sales person is no different that managing any other employee IF you hire the right people. If you don’t want to grow, don’t hire a sales person or anyone else (and that is a very valid option). If your only skill set is programming, maybe partnering with someone else is a better option for you, and that’s ok too.

    Sales is an art – if you aren’t good at sales partner with someone who is. Chances are the person you are selling your services to IS a sales person and they might just take you to the cleaners. Ask yourself: am I getting the prices for my services that I could/should?

    The funny thing is that I’m in just the opposite situation as most of you. I’ve got some ideas that I want to sell and am teaching myself PHP and MySQL to build it. Hand coding HTML was a piece of cake to learn and XHTML/CSS isn’t much tougher.

    If you think coding skills are the only ones necessary in the world of internet business, you’re misinformed. You may hate sales and sales people, but in each transaction someone gets sold: is it you or them?

  • loquax

    I know this is a very old article but I just ran across it because I’m contemplating hiring a salesperson also (straight commission). I’ve just read a fanatastic book by Chet Holmes “The Ultimate Sales Machine.” He’s extremely well known in the marketing arena and successful. This will clear up a lot of the issues with hiring the right sales person and managing them to make sure they are doing what they should. Even to the point of doing specific personality testing and interviewing techniques that will weed out non-performers but will give you a clear view of someone who can sell but also build relationships and nice combination of both characteristics.

    Unless you personally know the sales person and how they work, and even if you do, you need to have a system in place for you to be able to track their progress and problems they are having selling so that you can tweak it and give them the tools and improve your sales process. Sales is more than just selling and it should be given due respect.

    Bottom line is that you have to work on the sales process too, even if you are not physically out doing all of the sales. It’s very irresponsible to hire a salespersona and let them run ammuck but if you do it correctly you can seriously grow your business.

    I’m learning a lot about sales myself and do expect to do some also, but not all because I’m a one-woman show for now and due to the nature of my business, a lot of the time is spent managing and promoting my client’s busineses. If I’m out all day drumming up business where do I have time to promote their business, which is my business. So yes I will probably hire a sales person but will definetly be involved in the planning, marketing, management of the entire process. Oh and of course you pay the sales person after the funds are secure from the client. I couldn’t even afford to pay them before hand.

  • RobertSeviour

    Hiring a good salesperson is very difficult because unless you have known their work performance for a good long while, you have no reliable indicator of how well they will perform. Interviews aren’t much use because they showcase sales knowledge, but give no reliable indication of the candidate’s motivation to do the job well.

    I’ve been on both sides of the exchange; as a salesperson wanting to be hired and as an employer looking for a capable representative. I know you can fake the apearance of being skilled and keen.

    Drawing from these experiences I wrote a manual on the ways you can minimize the problems of finding a salesperson who doesn’t disappoint, How to Hire a Good Technical Salesman