A reseller’s salesforce should act as its war chest, armed with excellent sales techniques and product knowledge. But when often faced with limited time and resources, it’s not easy for businesses to get the right people on board.
The answers and information in this article are based on a research study into reseller hiring practices, carried out from 13 January to 8 February this year. 260 office products reseller owners, presidents, C-level executives, VPs of sales, directors of sales, sales managers and HR managers took part. 80% of the respondents were from independent OP resellers, and 60% of the respondents represented reseller companies with sales of less than $10 million per year. The study compared the recruitment of sales reps for roles outside a company’s headquarters with recruiting for positions based inside the business.
1. Where do I find the best sales candidates?
Of all the recruiting sources, referrals are by far the leading source of providing qualified sales candidates for OP resellers, which was no surprise. However, it was a bit of an eye opener that referrals were rated at three to four times more effective than the next highest rated recruiting source.
In addition, the methods used most (with the exception of Craig’s List) all have a component that relies on knowledge of the candidate by a third party – demonstrating acceptance of the candidate. This is the case for referrals, staffing agencies and LinkedIn.
2. What types of candidates provide the best results for your company?
According to results, the best candidates providing desirable sales performance for outside sales have previous sales experience with an independent dealer, followed by those with sales experience but not in the OP industry. However, for inside sales candidates the top choice is those with sales experience but not in the OP industry. The overall theme here is that there is a relationship between the provision of desirable sales performance results and having a candidate with previous sales experience.
A word of caution: experience does not mean expertise. Just because a salesperson has worked in the OP industry for a long time doesn’t necessarily mean he or she can perform the sales role you are looking to fill. Also watch out for ‘job jumpers’, people with a short length of employment at many companies. You may end up hiring someone else’s problems.
3. How long does it take to determine if a new sales hire is not a good match?
On average, OP resellers are able to determine if an inside hire is not a good match for the company more quickly than for outside sales hires. Why is that? Is it because resellers have more invested in the outside sales hire so they give them more time to succeed or fail? There is an adverse impact financially as well, since there is typically a larger investment in compensation with outside sales hires.
It’s difficult to ‘de-hire’ someone, especially if they are a nice person. However, in most situations as the manager you will have an impression very early on if the sales hire is going to be successful or not. Hanging on and hoping for the best is not the right thing for you or the person you hired. Ask yourself: “If I knew then what I now know about this salesperson, would I have hired them in the first place?” If the answer is no, you may want to take action sooner rather than later.
4. How long does it take for a sales candidate to become profitable and productive?
This question is asked more than any other when it comes to hiring salespeople; when will they ‘pay for themselves’? Based on the research, inside sales hires reach a profitable level 68.3% of the time in 12 months or less. Outside sales hires only reach a profitable level 40% of the time in 12 months or less, perhaps because they typically receive a higher level of compensation to begin with. Therefore it takes longer for them to generate sales to offset that initial higher compensation.
In most circumstances, it is necessary to start a new sales hire on a significant salary for a period of time, and to get a quality salesperson it is necessary to pay them a competitive compensation package. There is quite a wide range with factors such as marketplace, cost of living and experience that impacts the income range of salespeople.
5. How many sales candidates hired actually make it to a level of profitability?
We defined success at hiring at a benchmark where seven out of ten reach a profitable production level. Once again there is a significant disparity between outside and inside results. 33.6% of respondents report that only one out of five of their outside sales hires successfully reach a profitable level of production, while only 12% of respondents report the same poor success rate with inside sales reps. Inside sales outperformed by over ten points with a 36.6% success rate and outside sales reporting only a 26.2% success rate.
There are several reasons why there’s such a difference. As mentioned, outside sales hires are usually higher paid requiring a higher level of sales production, which is more difficult to attain. They have more freedom and less management oversight than inside salespeople, which may contribute to less productivity and focus. Inside sales hires typically receive more day-to-day supervision as they are physically onsite and often receive more coaching and accountability control.
Interestingly, 25 respondents reported none (0%) of the outside salespeople they’ve hired reached a profitable level of production for their company.
6. Input from resellers regarding best practices for identifying successful sales candidates
When asked ‘What efforts have you found helpful in identifying successful sales candidates?’, by far the most common comment had to do with resellers stating that they’ve had success using pre-hire personality profile or behavioural assessments.
The following are a representative selection of other written answers:
- “We require potential candidates to call into a voicemail and leave a two-minute message as to why they should be considered”
- “We do a phone interview and ask the candidate ten questions, and say thank you. If they stop us at the end and ask us what else they can do in order to be considered for the position, then we know they are not a quitter and will fight for an order”
- “It’s all about personality, personality, personality. Knowledge of the products is a minor advantage. Often it’s good to hire someone who is not influenced by a background in office products to benefit from a fresh perspective”
- “Good listener with evidence of coachability, and of working for results such as in sports, music, or an Eagle Scout”
- “Referrals from friends have been our best source for successful hiring”
- “Nepotism works”
- “The top three characteristics we attempt to evaluate are a candidate’s energy level (action orientation), organisation (time management skills) and drive (indicators of the candidate’s motivation to succeed)”
- “Using critical behaviour interview techniques, listening to how the candidate talks about previous work experience”
- “Referrals and LinkedIn”
- “It’s a crap-shoot”
- “We’ve explored all avenues from job fairs, campus recruiting, social media and traditional recruitment, and found that typically word of mouth and reputation usually provide the best opportunities”
- “Indeed.com has been an excellent source for us, mainly because it’s cheap and it screens all enquiries through resumés”
- “Someone that has been involved in athletics (successfully) in high school or college”
- “I try to be as upfront as possible in the hiring process about the amount of cold calling required for a rep in the OP industry and put together a pay plan that rewards performance rather than a flat salary for a lengthy time period”
- “I like to hire men and women right out of college. I show them a career path and training programme. We work more on developing a sales professional through salary and incentive goals more than just gross profit and flipping them to 100% commission.”
7. Input from resellers on effective interview questions
When asked ‘What has been one of the most effective interview questions you have used to determine if a sales candidate will be a good match for your company?’, the most prevalent comment had to do with asking the sales candidate to ‘sell’ something such as a pen to demonstrate their selling skills to the interviewer.
The following are a representative selection of other written answers to the question:
- “What do they know about us? Because if they can’t take the time to do company research for a job interview, then they will not research a potential customer either. This usually translates into not being prepared”
- “What is the one question I have not asked you that you were ready to give me a good answer to?”
- “What are your long-term career objectives?”
- “May I approach one of your key wins for a reference?”
- “Give me an example of a sales challenge and how you handled it.”
- “Walk me through your typical sales week; what is involved day-by-day?”
- “How did you specifically achieve the goals and successes achieved on your resumé?”
- “Why did you choose sales as your career?”
- “Tell me five things that make you a good salesperson and how you have applied those in the past”
- “What are your three weaknesses and three best strengths?”
- “How do you respond to objections when making a sales presentation?”
- “Describe how you prepare for a sales presentation”
- “How do you currently convert a lead into a prospect?”
- “Why are you here? Right at the beginning of the interview, their answer tells you much about the person, their research, their desire to work for your company or if they are just looking for a job”
- “I tell them that I don’t think they can cope with rejection from prospecting and see their reaction”
- “I ask them a question about their Facebook or LinkedIn account that I have reviewed before the interview”
- “Give me one of your recent sales experiences and how you gained new business from someone not buying from you”
- “Provide me with an in-depth selling process used when selling for your previous employer”
- “What do you find attractive about this job?”
- “Selling pencils is a tough business. Why in the world would you want to do that for a living?”
Hiring new salespeople is not a simple task. If you get it wrong, it can be very costly. Just think about the expenses associated with a bad sales hire:
- Salary, commission and benefits
- Lost sales opportunities
- Lost customers
- Lost management time
- Lost training costs.
And those are just for starters. Questions four and five above are important measures to benchmark within your own organisation, so the starting point is to make sure you know the answer to both questions.
Once you know where you stand, the challenge is to ask yourself: “How can we reduce the time it takes for a sales hire to reach a profitable level, and at the same time increase the percentage of our sales hires who reach a profitable production level overall?”
There are two major components that will significantly impact the success rate of new hires. Firstly, hire the right person in the first place. Here are some ideas how:
- Begin by clearly defining the role of the sales position you are looking to fill; different sales roles require different skill sets
- Check references of your sales candidates. You would be surprised at the number of applicants who misrepresent their work history or have inaccuracies about their education on their resumé and job application. If you find significant inaccuracies you should probably pass on the person
- Take your time. Interview sales candidates at least three times before making a decision. Use behavioural interview questions to gain a better understanding of the candidate’s skills and abilities and how they match up to the sales position.
Secondly, once you hire a new salesperson invest in their success by providing resources such as:
- Marketing and technology tools
- Continuous training to make sure they have the skills necessary to compete
- Spending time reviewing your expectations and guiding them with coaching and support to help them to succeed.
Lastly, when you do have a situation where a new sales hire doesn’t work out, ask yourself the question: “What could we have done as an organisation (or individual) to have increased the success rate of that sales hire?”
Improving your hiring practices will make a significant difference in your success as a company!
Jeff Gardner of the Maximum Performance Group and Dr Shawn Green PhD, The Dunham School of Business, Aurora University, would like to personally thank all the people who took time to respond and answer the survey questions. It illustrates something very special about the people in our business: a strong desire to contribute to the betterment of or industry as a whole.