Ready to Hire Sales Winners?
Apply a Drop of Science
Okay. We understand. You’re downright tired of new sales hires’ failure to launch.
You trained, coached, motivated. Nothing worked.
But did you hire the right person in the first place?
CSO Insights’ studies show the average sales team’s annual turnover hits around 25 percent with half quitting and half fired. Out of 100 salespeople, 25 are lost every year. Imagine what that does to a business.
If you accept conventional wisdom that the loss of one salesperson costs a company one-and-a-half to twice their salary, and assume an average annual comp at $125,000, a company with a 100-person sales forces loses $3.125 million a year in productivity. How long can that go on?
For this reason alone, you must hire right.
More than one-half of all companies in a recent CSO Insights’ study plan to increase the size of their sales force this year. The race for talent is on.
What do you think is their biggest concern? How to make these new hires successful.
Thirty-four percent of sales managers in the study believe their firm’s ability to hire successful representatives needs improvement. Surprisingly, slightly more than 40 percent of firms do not apply aptitude or competency testing to hire the right talent for the job.
Unscientific hiring practices can be a barrier to rapid ramp-up and a bottleneck to a robust team structure. As it is, more than one-quarter of new hires take up to nine months to begin producing in sales.
In a recent client assignment, the CEO of a mid-size financial services company asked me to assist in the selection process for four key consultants for his organization, and handed me the resumes of six people under consideration, all from his two largest competitors.
Even though I did not agree with his approach, we looked at the possibilities of hiring experienced salespeople from the competition. As Lee Salz says in his article “Beware of Hiring Your Competitor’s Sales People,
“Life would be grand if we could sprinkle a few seeds in the ground, fertilize, add water . . . and a great sales person would sprout.”
No Poaching the Competitor
Trying to poach the competitor is truly a pipedream, and often pursued by C-Level executives, business owners and sales management executives in their quest to find great sales talent.
Rather than grow their own, they attempt to steal the crops from their competitors. And why not? They reason their competitors are far better at growing sales organizations. So they will grab some magic seeds from their competitors’ acreage and they, too, can enjoy a great harvest.
Even when hiring experienced salespeople, it takes time for them to acclimate to your culture and to ramp up to speed. In my experience, it takes nine months to one year, depending on the product or service sold, before they begin to produce at expected levels.
Weak Hires: Is it You, Your System or Them?
If stealing from the competition is your strategy, you better make these changes immediately:
- Develop an effective selection process
- Create a comprehensive onboarding process
- Understand what makes your current top performers successful
In the 2015 MHI Sales Best Practice Study, 96 percent of world-class sales organizations said, “We know why our top performers are successful,” versus 46 percent of all respondents.
Understanding what distinguishes average performers from top performers is somewhat of a challenge. First, it is hard to measure. Instead, top performance must be understood holistically.
Auto-analytics on direct sales activities and behaviors, as well as profiling on attributes, skills, and competencies help provide a complete picture of why your top performers deliver outstanding results.
DNA Behind DiSC
Salespeople need the right DNA to succeed at the top performance level. I have hired many top performing salespeople over my career, using the DiSC profile as my starting point.
Everything DiSC® identifies four primary dimensions of behavior – Dominance – influence – Steadiness – Consciousness. Everyone is a blend of these four styles. DiSC styles do not identify abilities or strengths, only priorities or behavioral styles.
Within three minutes of scanning the results of a DiSC profile,
I can tell you if a person will be successful in sales.
In my thirty-plus years of hiring, I made three exceptions to this process.
They were all highly qualified on paper, coming from a competitor, and they all failed.
For a $125 investment in the profile, I became well-skilled in the selection process.
Using DiSC, I looked at the six candidates in my client’s recruiting pipeline─none of them had the right DNA. They all looked great on paper but the right DNA was missing. I told him, he could hire them, but we would be having discussions 12 months out on why they weren’t closing business.
What’s the right DNA? Based on DiSC profiling, top performers exhibit high behaviors in Dominance, high in Influence, and low in Steadiness and Consciousness. Of course, it is not quite this simple. Negatives to some may be positives to us. We’ll look at a candidate attitude toward paperwork, selling new clients compared to servicing existing clients. Learn more.
Increase in Involuntary Turnover
Sales managers in poor sales cultures face challenges in hiring for top performers because the best people don’t stay long in a flawed culture. What’s left are poor performers. It doesn’t take long for involuntary turnover rates to rise.
CSO Insights’ data shows an increase in involuntary turnover occurs when a sales representative needs to be counseled off the team and out the door. Competency testing could counteract losses by catching poor performers before they’re hired.
Two other issues compound the problem of hiring sales talent:
- How fast managers need to hire sales representatives to meet resource growth goals
- How long it takes for new talent to become proficient in selling
Nearly one-half (47.5 percent) of sales representatives take ten months or longer to become adept enough to contribute to company goals. This delay is most likely due to a lack of consistent sales methodologies and failure to spend enough time on selling activities [see Chart 2 below].
Hire/Train Practices Not Effective
Probing deeper into the analysis by CSO Insights, we learn that although sales managers have increased the annual training spend considerably since 2012, possibly due to the need to ramp-up cross-industry hires, sales effectiveness remains sub-optimal.
Nearly 45 percent now spend between $2,501-$5,000/year on each sales representative. However, training spends are insufficient. Organizations need to reinforce the training and incorporate it into daily sales activities to yield higher payoffs.
Despite the uptick in training spending, more than one-third of sales managers are surprisingly unclear what measurable improvements result from their training investment.
One-Third of Sales Managers Unsure What Measurable Improvements Result from Training Investments
So, where are we?
We know there’s a high turnover in salespeople that cost companies untold millions.
We believe hiring and training practices are not working effectively.
We accept that new hires need the right mix of characteristics to succeed.
And, we need to do a far better job of recruiting and retaining those salespeople with the inherent behaviors that lead to success.
Actions to Improve Sales Effectiveness
The actions I am about to suggest are neither simple nor easy.
- Build talent strategies, competencies, learning models, and analytics capabilities to create agility, speed and stronger integration inside and outside the organization.
- Know the DNA of high-performing sales representatives and then revise recruiting, retention, and training around that DNA, then maintain your standards.
- Reduce the time for a sales representative to reach proficiency by conducting more targeted recruiting and more effective
- Increase sales representative productivity through more effective coaching, learning and motivation solutions.
- Improve sales representative retention through more targeted practices.
And I’ll add a last bullet here, although it should be the first in your hiring priorities.
Make the effort to learn and the investment to use Everything DiSC® to profile upfront the right behaviors in new sales hires. Then let the downstream benefits take you to the open waters of sales opportunity.
See you on the upside,Bill
For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 858.759.8637 or 213.598.4700