When the pandemic hit, were you crushing it, maintaining status quo, or suffering? The answer would likely depend on your industry. But that was then. Looking forward, the economy is projected to be gangbusters at least through 2023. Maybe you are thinking it’s time to double down on your sales growth. Maybe there are some salespeople available who are anxious to be part of a company like yours. Before you dive in and start hiring, here are some key factoids to remember:
- Salespeople are frequently more adept at interviewing than the interviewer.
- Resumes are merely marketing documents and are possibly written by a professional resume writer (read: marketer).
- Many hiring managers are merely looking for a salesperson who most resembles them and that they can hire as quickly as possible.
- One’s gut instinct is wrong nearly 86% of the time – Do not allow anyone to rely on gut when hiring, especially salespeople.
Proceed with Caution.
All these factors should cause you to be vigilant when hiring sales talent. Making a poor sales hire is a double whammy – they don’t produce the revenue AND they suck resources. A poor-performing salesperson will cost your company dearly. Some data suggests the wrong salesperson will set your company back three to five times their annual compensation. That means $300,000 to $500,000 in cost if you are paying them $100,000 a year.
Why so much? It breaks down to these components:
- Time Training and Onboarding
- Management’s Coaching Time
- Total Team Frustration and Lost Productivity
There’s one more component to list and it’s by far the biggest: OPPORTUNITY COST. Think about it. If you hire the wrong salesperson, one who fails to go out and get the customer or can’t close a lead when it is dropped in their lap, then you are unlikely to get that customer back in the future. This is especially problematic in industries where multi-year contracts are signed.
Or how about the cost to the rest of your team if you try to prop up the new hire with quality leads while the veterans who have proven themselves have to fight and claw to get their own. But lead assignment is a whole different animal that we won’t cover here. Bottom line: Do not underestimate the severe cost of hiring wrong.
The Hiring Wrong Trap
All too often we see company leaders settling for the first available “kind-of-okay” candidate. They feel like having a warm body is better than no body.
It’s not true. You would be better off having nobody than having the wrong somebody for all the reasons I stated above. If you want a surefire way to kill your margins, then go ahead and hire the wrong salesperson, and let them waste your leads, frustrate everyone on the team and drive you nuts, while asking for discounts at every opportunity.
And if you have a soft spot and try to help newbies become successful you will more likely just end up granting them the ability to discount. Remember that 60% of all salespeople are not comfortable discussing money, so if you aren’t careful in your hiring all you will do is add to your stable of discounters – and margin busters.
You’ve Weathered the Pandemic Storm
You don’t need to hire a bunch of people who will erode the hard work that you and your team have put in. More bodies are not necessarily the right answer. What you need is salespeople who can:
- Sell the value you deliver without relying on price to win business.
- Follow a process to efficiently qualify or disqualify prospects, thus improving closing ratios and new business activity.
I pick these two items particularly because they have incredible impact on your company’s profitability as you add sales talent. We created the Simple Profitability Plan to help you understand the effect of these two items while helping you plan each quarter for greater success through increased revenue and profit.
Is It Time to Hire?
Yes, it might be, but please hire smart. Let us help.
We can assist you to determine which candidates will be able to sell value and close business in your environment, selling your products or services to your market. If you want to see how it works, let me know and we can set you up with a trial for free.