In This Chapter

A strong sales channel is critical to any small business’s success. Developing and sustaining this channel over time remains one of the most difficult challenges for any small business.

In this chapter, we move beyond the best practices necessary to launch a start-up’s sales operation and delve into the best practices that will support your organization’s sales efforts over time.

Choosing the right person for a sales job takes time and patience. One essential step to take before interviewing anyone is to develop a written job description for the positions you want to hire. The job description should include the specific behaviors and skills that you want a salesperson working for your business to have.

It is true that these needs will change over time and that you will need to refine and update job descriptions occasionally as your organization grows, but that is no excuse not to create the document in the first place!

Prior to developing a written job description, consider the most important questions—for instance, at this stage of your organization’s development, do you need hunters, farmers, or a combination of the two? Do you have time to invest in training and guiding less-experienced salespeople, or do you need individuals who can produce significant revenue right from the start? Do you only want salespeople who have sold in your industry before, or will individuals who have worked in other industries who have strong sales backgrounds work?

Make sure your job descriptions specifically reference the responsibilities required to succeed in a particular sales role. Pay particularly close attention to the hunter/ farmer issue. Is the salesperson going to be responsible for seeking out and developing new customers (hunter model) or nurturing income from within an existing account (farmer model)? Don’t expect one salesperson to fulfill both roles at a level of excellence!

Other key responsibilities of salespeople include …

In addition, your job description should specify that salespeople should help to set up events for current and new customers. We’re talking about the kinds of meetings that will help management grow the business: breakfast meetings, lunch-and-learn opportunities, product demonstrations for large groups, and so on. To make sure these events are successful for all concerned, salespeople must also be willing to share the information they have about customers with others in your organization (typically people in marketing and operations).

Your job description should encompass these responsibilities as well as others that are specific to your industry and your business. Complete the job description prior to interviewing candidates so you know exactly what to look for during the interview and the applicant knows exactly what is expected. This is an important hire for your company. You definitely want to get it right.

Some job applicants are very, very good at selling. Specifically, they are good at selling themselves, which means they are good at interviewing. Selling well during the interview, however, does not necessarily mean selling well over time for your company. Your job is to use the interview process to identify a candidate who will shine not only during the interview but also over the long haul as a member of the team.

Start by identifying the basic skills and behaviors you want to see in a salesperson (including telemarketers) during an interview, whether that interview is held in person or virtually. The seven traits you will be looking for during the interview are summarized as follows:

The ideal candidate is a great listener. You need someone who is capable of carefully listening to the customer and understanding his or her needs. The last thing you want in a salesperson is someone who immediately assumes they know what is best for the customer and doesn’t really listen.

The ideal candidate is a self-starter. You should not have to prod the salesperson constantly to perform key activities and make the daily numbers. You need someone who knows what the goals are and how to reach them—without you having to check in regularly to make sure everything’s on track.

The ideal candidate is someone with a great attitude. The salesperson representing your business should have a superior attitude. He or she should be confident, optimistic, and purposeful. This individual does not let the word “no” get them down; they don’t take adversity personally. He or she will be a social butterfly—someone who is outgoing, friendly, and a generally likable person who wants to be around others and whom others want to be around.

The ideal candidate has personal integrity. You want to hire an honest person with high values and personal ethics. The salesperson is, after all, the public face of your business.

The ideal candidate is a strong negotiator. Your salesperson must negotiate with prospects and customers regularly—on pricing, customization of products and services, timelines, and even when and whether the first discussion will take place.

The ideal candidate is someone with strong time-management skills. Especially when hiring salespeople who will be visiting clients in person, you must hire individuals who can manage themselves and their time in a way that does not inconvenience or disrespect prospective buyers. Note: The applicant’s ability to show up on time for your interview(s) is a key indicator here!

The ideal candidate has strong follow-through. Here again, you can use the interview process itself as a skill barometer. Immediately after the face-to-face meeting, does the applicant attempt to clarify what is happening next and when it is happening? Does he or she follow up by phone to determine what is necessary to close the deal and get the job? These are skills that will definitely come into play during the sales cycle. You should see evidence of them during the interview.

If your applicant is missing one or more of the seven critical selling traits—great listener, self-starter, attitude, integrity, negotiating skills, time management, and follow-through—it really doesn’t matter how well the person handles your questions during the interview. The applicant in question is not likely to be happy or successful as a salesperson.

If you are hiring salespeople who will be answering phone calls from clients and responding to web inquiries only, you will want to look for some additional skills. These are summarized as follows:

The ideal candidate should have a great personality you can hear in his or her voice. In many cases, these salespeople will never see a customer face to face; they will need to make a great impression immediately over the telephone.

The ideal candidate should have a strong team player attitude. People with these jobs will need to be able to work closely and harmoniously with your other salespeople and with people in other areas like operations and customer service. Additionally, these salespeople should be comfortable reaching out to people in product development, marketing, and senior management to share what they are hearing from customers.

Best practices for interviewing sales applicants include the use of behavioral interviewing techniques. These will help you to understand how the people you will hire will be likely to interact with your customers and other employees within the company. Chapter 14 gave you some general information on behavioral interviewing techniques; this chapter goes into a little more depth. Consider asking the following behavioral questions during your interviews:

Another classic behavioral query is the “sell me this” question. Hand the candidate whatever is nearby on your desk—book, calendar, tape dispenser, pens, stapler, whatever—and then simply ask him to sell it to you. The best salespeople will ask you questions before they talk about the product they are selling, then they will tell you about the product and how it could meet your needs. You don’t want to hire someone who starts out by telling you how great the product is! The salesperson’s goal should be to understand you, your business, and the problems you need to solve. In this miniature role-play, the salesperson should work with you on how best to solve the problems you face.

With each of these questions, you will want to follow up with additional queries that will help you understand what the candidate did in the situation, how they reacted to it and managed it, and the behaviors they displayed.

Finding the right compensation program for your sales team can be a tricky task. You need to find a balance between base pay and commissions and bonuses. Your ability to identify and maintain that balance can make all the difference in securing and retaining the best salespeople.

There are a variety of combinations to choose from:

There are benefits and disadvantages to each option. For example, if you pay a salesperson only commission with no base salary, you will definitely be getting hunters; these tend to be very proactive salespeople who are eager to take the initiative.

They are likely to close the sale and move on to the next prospect. If you offer a larger portion of compensation as base salary, you may find individuals who are not as aggressive in sales (because they have a high salary to begin with) and are not as motivated to earn commission. These salespeople may, however, be better at maintaining ongoing day-to-day relationships with customers than the hunters.

As a best practice—and to save yourself a lot of headaches later—you will want to develop your compensation system before you hire any salespeople. This way the salespeople you hire know what the salary and commission mix is before they take the job.

For new salespeople who need to get up to speed in the product or service being sold, many companies provide draws. If you decide to provide draws to new salespeople, you’ll need to determine the draw amount, decide on what period of time it will be paid out, and decide whether it is a recoverable or nonrecoverable draw.

Let’s look at an example. You have hired a new salesperson who will likely take six months to get up to speed on your product given her past experience. You have provided her a draw of $5,000 to be paid over a period of six months. The draw will be considered nonrecoverable, meaning that even if the salesperson ends up resigning or being fired after earning only $1,000 in commissions, your company does not get $4,000 back.

You may choose to incorporate some form of incentives as part of your compensation package, either regularly or on an occasional basis. These incentives could include prizes such as gift certificates, cash bonuses, or other perks.

One common approach is to use incentives as part of a team contest to drive the sale of a specific product or service. For the salesperson who wins the contest, you provide an extra reward (such as a luxury cruise).

Incentives can be tricky to get right. For example, you wouldn’t want to use incentives simply to get a salesperson to generate activity (get leads); instead, you want them to do something with those leads—either move to the next step in the sales process (possibly get in for a meeting with key decision makers) or to close the deal. You don’t want to make incentives too easy to achieve, such as getting more business from a current customer that regularly provides new business for your company without effort. Rather, you might provide an incentive to a salesperson who goes out and finds new accounts for the business.

As a best practice, do a bit of research into common incentives for salespeople in your industry and also for salespeople outside of your industry. By looking at what has and hasn’t worked for other businesses, you can find creative ways to encourage your salespeople to make their numbers and bring in revenue.

The right combination of salary, commission, and incentives will be determined by many factors, including what the salesperson is selling, who the customers are, whether the person is expected to contribute as a hunter or a farmer, the size of the average deal, the number of deals the average salesperson closes or is expected to close over the course of a year, and how long it takes to close a deal with customers.

Yes, that’s a lot to take into account. As a best practice, consider following this core principle: the more demonstrated experience a salesperson has in successfully selling a given product or service, the higher the percentage of his or her income should come from commissions. Some senior salespeople may even be comfortable with a commission-only approach, but others with less experience may be intimidated by this idea.

Another best practice—and perhaps the most important of them all in this complex area of sales team compensation—is to be ready to change your approach if you notice that it isn’t working. The whole idea behind your compensation plan is to give people an incentive to sell. If two months go by and the compensation plan you have selected is serving as a distraction and a magnet for complaints, it’s in everyone’s best interest for management to take a step back and reassess.

Let’s look at an example. You have noticed that your current sales team compensation, which is 40 percent salary and 60 percent commission and incentives to drive the sale of new products, seems to be affecting customer service. Part of what you want your salespeople to do is to ensure that they provide high-quality support to customers by checking in with them regularly and following up on their use of products sold. However, since the majority of their income comes from commissions, the salespeople are more focused on closing a deal and moving on to the next customer and the next deal. Your solution is to revise the compensation structure to include more salary and less commission (you change it to 50/50) and offer incentive plans focused on servicing the customer after the deal has been closed.

Your business’s sales process is simply the workflow you follow when it comes to generating and closing sales. You may think you don’t have a sales process yet, but if you’ve closed even one customer, you do. Some process must exist that salespeople use to get leads, follow up on them, and close the deal. You just may not have documented that process!

The following figure shows an example of a documented sales process for selling training classes.

The process begins with the marketing department generating leads through various marketing activities such as e-mail blasts, purchasing lists of potential customers, and website inquiries. Those leads are passed to the sales reps, who qualify the lead, determine the opportunity, do discovery, and submit a proposal for the work. If the proposal is accepted—the customer will select your business to deliver the training class for his employees—the delivery team steps in to do the training.

There are many benefits to having a defined sales process. You can see where sales are being held up in the process and can make adjustments, like additional training on products and services for salespeople or improved marketing messaging to potential customers. Additionally, you can see the value of the leads being generated from a variety of marketing campaigns and make adjustments for effectiveness. By having a sales process in place, you will know how long it should take for a lead to be worked by your salespeople until the deal closes; you can therefore more accurately predict how many leads are needed and how much lead time is required in order to generate revenue for the business. This information has important cash flow implications.

Your sales process may vary from product to product and for each of the services you provide. Therefore, be ready to define multiple processes.

As your business grows and your customer base increases, some things will change; some of those changes may affect how you get leads into the process and how your customer buys from you. All of these changes affect your sales process. As a best practice, be sure to review your sales process on an annual basis to make any small adjustments necessary to ensure that your salespeople can do their job and meet their goals.

Training your salespeople in the relevant sales processes is an essential foundation of their success—and, ultimately, your organization’s success.

Assuming that you’ve made the transition from the entrepreneur-as-lead-salesperson model that we discussed in Chapter 8, you will find this the simplest of the sales management scenarios. No intradepartment competition exists in the one-person-band setting, and you can be solely focused as a manager on supporting that one individual.

Of course, it is important to train your salesperson in your products and services—the features, benefits, and value to the customer of purchasing from your business. Additionally, you will need to provide the salesperson with collateral—marketing brochures, flyers, etc.—about your products and services that they can, in turn, share with potential customers.

Let’s say that your goal is to bring in $500,000 in total sales revenue in a year. Let’s assume, too, that, your salesperson buys into this goal. You will need to break that figure down for the salesperson. Specifically, you’ll need to determine how much of that revenue you expect the salesperson to bring in over the course of the year, and also what the corresponding weekly, monthly, or quarterly targets are. (The decision on how much revenue needs to be brought in each week, month, or quarter will depend on your sales cycle and the degree to which your organization’s sales are likely to be seasonal.)

For example, let’s assume you own a bicycle shop that sells high-quality parts to other bicycle shops, and that you are based in the Northeast. It is highly likely that the majority of your sales to the other shops are in the warmer summer months. Therefore, you will have lower sales in the winter months. After talking about goals with your salesperson, the two of you may decide to distribute your salesperson’s quota as follows, assuming a calendar-based fiscal year:

As can be seen in the preceding table, the salesperson’s quota is higher during those months when more people are using their bicycles most, and shops are buying the most parts to meet their customers’ needs.

As you move from one salesperson to two or more, the competition naturally heats up! As we discussed earlier, the best salespeople are go-getters. Their natural inclination should be to take the initiative and start working their territories, not to sit in your office and get coaching advice from you.

A brief (30- to 60-minute) weekly meeting with each salesperson is a good face-time target (or voice-to-voice target if your salesperson spends most of his or her time on the road); so is periodic professional development in the form of training or seminars. We particularly recommend the Sandler Selling System for sales teams of all sizes. You can learn more about the Sandler company’s training and reinforcement regimen by visiting www.sandler.com or by checking out David Mattson’s books The Sandler Rules and Five Minutes with VITO (co-authored with Anthony Parinello).

For businesses that employ salespeople from various areas who are unlikely to ever be in the office, consider weekly conference calls along with virtual training sessions to provide professional development opportunities.

Weekly one-on-one meetings with salespeople should be focused on the following issues:

This is the time to really get to know your salespeople and understand what motivates them personally to get the job done.

You will, of course, eventually need to work out a system for assigning customer accounts to your sales team. There are a variety of ways to do this:

You need to figure out what works best for your business and your specific customer base. Obviously, if you only sell your widget to manufacturing companies, it doesn’t make sense to assign accounts vertically; you might instead choose geographic territories or assign named accounts for your salespeople.

Each salesperson on your sales team should have personal quotas; each quota should be the result of a private coaching discussion in which the salesperson helps to set the goal. More junior people (who just started with your company or are still learning the ropes about a given product or service) should have a less aggressive target than someone who has been selling the same line with great success for a number of years.

Some businesses find team quotas, along with individual quotas, to be effective in driving business. If you adopt this system, your salespeople should earn rewards for hitting the team quota, for hitting the individual quota, and perhaps a special bonus of some kind for hitting both.

Part of managing your sales team involves going out on sales calls with them. As a best practice, take a little time each week to spend a few hours out of the office with your salespeople visiting customers. This gives you the opportunity to see your salesperson in action. This also provides your salesperson with a learning opportunity. After the customer meeting, spend time debriefing on the following issues:

Continuous learning is important for any role and certainly is no exception for a sales role. There will always be difficult customers who need to be managed, new products and services to sell, and changes in competition that require a change in how you do business. For the members of a sales team to be effective you must continuously invest in their development … and focus relentlessly on opportunity.

The larger the sales team you manage, the more work you have ahead of you. For larger sales teams, you will probably find it worthwhile to hire a sales manager to oversee the team and direct their actions on a day-to-day basis.

A common problem with larger sales teams is that training sometimes falls through the cracks. Even with larger sales teams, ongoing training and professional development must remain a priority. In addition to checking out the excellent Sandler Selling

System program, we recommend the following best practices for ensuring successful training of your sales team: