Of course, hiring is one of the main tasks of a company builder, and everyone can make mistakes in this regard, especially when recruiting salespeople. I estimate I’ve hired over three hundred salespeople in my career and made all the mistakes in the book. What I’ve learned, for myself at least, is that there are no shortcuts. It takes time to hire the right people, time to train, time for them to adapt to the culture of the company. Yes, I used to think I could speed this up. All I had to do was hire a marksman who could start as soon as he joined the company. But every time I do that, I regret it. I learned that effective selling takes a team effort, and – to build a great team – you need good players. I mean players who know their position and can work together to achieve the best results. I discovered that such salespeople are rarely the ones who can bring in the most sales in a short amount of time.
Finally, I established four rules for selecting new salespeople. The first rule is related to the candidate’s aspirations. I believe there are two types of salespeople. A kind of business-oriented themselves. The other type will always work for someone else. I like both, but I want to hire the second type of salesperson for the company.
Do not misunderstand me. I am not prejudiced against employees who leave the company to build their own careers. I don’t even care much if they compete with us. Still than they stay around me without fun. What I don’t like is the turnover rate in my sales force. I want the salespeople to stay with us forever. Other department employees are not like that. If they don’t get promoted in the organization, sooner or later they will leave to get better pay. This creates trouble for both you and them. You don’t have these problems with the salesperson. They are paid based on what they create. What’s more, good people can be productive year after year. They are invaluable employees to a business. Once I found them and trained them, I never wanted to lose them. So I try to eliminate candidates who dream of having their own business. They may be excellent salespeople, but I know they won’t stay long. I just hope they succeed – somewhere else.
That’s rule number one: hire salespeople, not entrepreneurs. The second rule comes from a few bad experiences I had in my first startup. Like many young entrepreneurs, I was in a hurry, and I thought I could save time and money by hiring a competitor’s salesperson. Since they are familiar with the market and the business, I won’t have to train them. They can work right away. They may even bring in a few customers. At the time, they were like a shortcut to growth. But then, I discovered it was just a shortcut to trouble.
First, most of them have bad habits that I can never get them to change. They learn common tricks in the industry and are constantly on the lookout for flash deals. I wanted them to take a closer look, but they didn’t listen. They think they know more than I do. Furthermore, they are not great salespeople. I always get better results with salespeople from other businesses and from my training. So I started to think, maybe the competition has a good reason to let these salespeople go. Maybe I shouldn’t be so quick to believe them when they tell me about their stellar track record at other companies.
Don’t I plan to take market share from my competitors? Yes, but it’s not worth it. Buying market share by hiring a competitor’s salesperson does not benefit your reputation in the industry. You probably won’t care much about it when you’re young and hot, but eventually you’ll learn that reputation is an important business asset, worth many times over in the long run. So we created a new company policy: don’t hire industry salespeople.
My third rule will touch a few narrow-minded people, but it is drawn from years of experience. That is, if you want to apply for our sales position, you must have held at least two positions in different companies, and one of them must be sales. In other words, we don’t hire fresh graduates. Why? Because almost no one is satisfied with his or her first job. While there are always exceptions, most people find something wrong in their first real job, no matter how good it is and how well they are treated. That is human nature. You simply cannot appreciate the present if nothing to compare. Then what do you do? You find greener grass. In fact, the new grads I recruit will change jobs within two years.
There’s no reason for me to hire salespeople that I know will leave after training. And there’s no point in training salespeople only to find out later that they don’t like selling or are uncomfortable with our work environment. That’s why we focus on candidates who have experience in sales and have worked in at least two different corporate cultures. In your first job, you assumed every company was the same. In your second job, you learn that different companies have different styles, benefits, processes, and rules. In the third job, you know you will choose the company as you choose your career.
My fourth rule is undoubtedly the most controversial. I have a very strong policy that we will never hire a marksman. I mean a sales superstar. Also known as a vending machine. If a good salesman can visit 100 customers and sign 10 contracts, and a great salesman can sign 20 contracts, then a marksman will sign 35 contracts. I’m talking about superstars at work. They have talent. They have a desire. They are motivated. They can sell anything to anyone. They are the best salespeople in the world. And I don’t want them in my company – because they only have one thing in mind: closing the deal. They will say everything, do everything, promise anything to get the customer.
Let me tell you the story of Bert, a marksman salesman I recruited in the early days of the mail company. He talks fast and thinks fast. He made a huge amount of revenue, which made me very happy. I don’t have time to check on him and I don’t think I have to. All I care about is sales, and he’s bringing them in.
Then trouble arose. First, we started having trouble collecting debts from his customers. Some say that the price we charge is different from what we promise. Some complain that they do not receive the quality of service we promise to provide. Then came the customers who brought in small revenue, but Bert gave them the big customer discount and assured us that they would increase sales later on. Upon inspection, we discovered his future sales were completely fabricated. In most cases, it is unlikely that the customer will increase sales.
Unfortunately, Bert was only the first of several marksmen I hired. They all got me into trouble. I cannot train or control them. They were dozens of steps ahead of me. They all have a way of defeating the system I put in place. I consoled myself that the marksmen would bring in new clients, and I would sort things out later. That never happened. Clients feel they’ve been cheated and hold me accountable – that’s exactly what they should do.
So I learned an important lesson: the salesperson represents you in the market, and I decided that I could not accept marksmen to represent me. They work on a different principle than I do. They want to get revenue at all costs. But I’m not. I want the revenue to provide enough gross profit to grow the business and repeat, year after year. I want to build long-term relationships with customers, and I want salespeople to help me do this.
That’s really what I want to emphasize here. I’m not claiming that every company should follow the same rules as me. It’s important that you establish a few rules – to think through the problems that arise as your company grows and to develop your own way of doing things. Because, when hiring a sales person, you not only choose the employees, but you also choose the customers. Like it or not, salespeople will play an important role in determining the type of customer and the type of relationship between you and the customer. You should take the time to make sure you have good relationships.
I know that you pay your salespeople with a monthly salary, instead of a commission. My question is, how do you determine the salary increase? I assume you use subjective evaluation criteria. If he raises his salary based on objective sales results, then he seems to have ruined the idea of teamwork he was working so hard to build.
You are right. Part of it is subjective assessment. I will look at company-wide results and individual performance, but most important to me is their performance as a team member. I want to see people helping each other, not competing with each other. I will give you an example. One of our salespersons, Patti, had to go out of town, and got another salesperson, David, to attend a meeting with a large client she had been trying to sign for a while. many months. When David showed up, there were six people waiting, who said they would make the final decision that day. He closed the deal, and I give him full credit for it, but I also give Patti three stars because she can say, “Yes, I count on my co-workers to support me.”
TROUBLE WITH REVENUE COMMISSION
Finding good salespeople is just the first step. You also need a compensation system so that you can pay them properly without causing problems for the company. I developed my own system of compensation for salespeople. In the process, I believe the method most businesses are adopting is a recipe for trouble. I am referring, of course, to the way in which revenue commissions are paid. If not careful, they can sabotage a company’s sense of cohesion and shared goals. How? By placing the sales people in a separate group, by making them separate and distant. However, commissions are not the only culprit. Most companies always place salespeople in isolated offices, hold private meetings outside the company, and treat them especially carefully when evaluating employee performance. ; This is not good for business.
But commissions play an important role in distinguishing salespeople from other employees. The result is hatred and resentment, which leads to inevitable conflict. The accountant complained that the sales staff had too many special agreements with customers and did not notify the biller. The operator complained that the sales staff made many unreasonable demands. As a business owner, you often have to negotiate between departments and resolve disputes among salespeople about who is in charge of which areas and who works with which customers. , who leads clients to the office, etc. It’s a nightmare and a nightmare that is extremely detrimental.
I realized that my role in compensation was the exact opposite. I also know that sometimes you don’t have a choice – at least at first. Almost every salesperson is a cult of commissions. They believe it is the only and fair way to deal with compensation, and they like the idea of paying based on the revenue they bring in. As a result, many business owners agree with that view and believe they will get more sales and better salespeople if salespeople take a portion of what they bring in. I used to believe this too.
But I realized it was just an illusion. After a lot of traumatic experience, I decided to abandon the commission system, and switch to a monthly sales staff salary plus an annual bonus, the increase in salary will be decided in part based on individual expression and is partly based on the performance of the company as a whole. The result: Our company’s three-person sales team and one support staff consistently outperform all competitors, each closing five or six times more sales than sales staff of other companies in the same industry. In addition, our employees do this together, because they really work as members of the same team. While none of them are sales superstars, each has a unique set of strengths that build on shared strengths – and help offset the others’ weaknesses.
For example, we had a salesperson who was very good at getting a prospect’s attention, but had a hard time closing the deal. But it doesn’t matter because he has the support he needs to close the deal. There is no territory of its own and must not have its own territory. Sales staff are willing to help each other when needed. They also work closely with the operators, they and the operators visit customers so that customers have the opportunity to learn about the people who are providing services for them. The staff themselves
Sales know all about operations. As part of the training, salespeople take the time to work with the rest of the departments and form bonds with other employees and appreciate their contribution to the success of the business. Karma. Based on these relationships, salespeople can bring in revenue that puts sales superstars to shame.
It took years to implement the system, and in the process I had to close my eyes a few times. I had a hard time getting rid of the sharpshooters because I’m a marksman myself in a way. I even had a hard time deciding to switch from paying commissions to paying all sales staff. To be honest, if I were a salesperson in another company, I would be hungry for a commission, because I think I’m an excellent salesperson, and I want to be well paid. I don’t care about the rest of the company. I would go crazy if other employees didn’t do what I wanted them to do for “my” customers. In other words, I’m the type of salesperson I don’t want to hire.
Besides, when I did the conversion, I got another benefit. Relieve the anxiety of all business owners, more or less – the fear that salespeople will leave with customers. Although no salesperson has left our company for a long time, it certainly won’t impact the company’s revenue if I lose one of them. On a personal level, we regret seeing an employee go, but the thought of losing customers or revenue never crossed my mind.
In fact, I think you’d feel better if the employee was paid by commission, rather than by salary and the bonus of leaving with the client. For salespeople who receive commissions, customers represent safety. As long as they keep the connection, they think he’s not the only one making a living. Therefore, they are very concerned with making sure the customer belongs to them, rather than to the company. So they prevent other people in the company from having relationships with customers. They think it would be better if the customer only knew them.
To protect themselves, business owners set up all kinds of mechanisms to prevent sales staff from harassing customers too much. One method is to move every new customer from a salesperson to a customer service rep, who will manage the relationship with the customer. Another method is to gradually reduce the commission level over time. Accordingly, when a salesperson closes a sale, he or she will receive, say, 10% commission on sales the first year, 5% the next year, and 2% after two years. In theory, salespeople won’t spend much time with customers, they only get 2%. These systems can reduce salespeople holding on to customers, but they don’t solve the core problem. Salespeople are still not part of the team. Their goal is not to help the company succeed, but to find a way to be number one.
I want everyone in my company to be on a team, including the salesperson. This cannot happen unless everyone is paid the same way. Please note that I am not saying pay the same salary. Because of the role and difficulty of the job, salespeople always make more money than most others. This is natural. A surgeon makes more than a lab technician. But I want all employees to be part of the same pay system. That is, I want them to receive a salary that is reviewed and adjusted annually, based on company performance and individual contributions.
If you’re like most business owners, you’re sure to shake your head and think, “Yeah, that’s great, but I could never have implemented that kind of compensation system even if I wanted to.” You believe you have no choice but to pay a commission. That’s the way it is in the industry, or even that’s what the salespeople want, or it’s the only way to motivate them. I agree that paying commissions is the rule in most businesses, and salespeople are comfortable with them. I also agree that commissions are the only way to motivate some people. But they are marksmen and would become entrepreneurs that I don’t want in my company. I want sales people to do sales just to make a living because they love their work and they are good at it. They have no secret plans. They are motivated by the same things that motivate other employees. They only focus on selling.
Such salespeople do not need to pay commissions. Yes, they want to be paid well – like everyone else. But they also want what most other people look for in the workplace. They want to be part of something. They want to belong to somewhere. They want to spend their lives working with a business that treats them like valuable members of a team.
But, in principle you won’t be part of the team if you sell for a commission. Unfortunately, most salespeople don’t realize it. They are used to being paid a commission. It has become a habit of them. When interviewing for a sales position, the first question they ask is: “What are the commissions and what are the rewards?” If you ask for a salary, they will look at you strangely. You can’t fight that, and I don’t. I wouldn’t risk losing good salespeople by trying to squeeze them into my system before they were ready. My job is to introduce them to the program, and this takes time. So we started with new salespeople the way they were used to: salary and commissions. After two years, when I wanted to keep someone, I would go to that person and say, “Listen, you’ve been here for two years. We want you here forever. We’ll eliminate your commission, and give you a raise, so you won’t lose any income. On the contrary, you will get stability. Do you think you will have a good year? I am happy to guarantee that you will have a good year. And if you really have a year like that. I will guarantee that the years to come you will be even better. Conversely, if the economy is in a recession and you have a few bad years, you won’t have to worry about losing a large portion of your income. You will still receive your salary. We want to give you that reassurance because we want you to be here for the long term.”
I also explain our annual raise review process because most people don’t understand it well. We start by assessing how well the company did in the previous year and how we hope to grow next year. We then create a range of raises based on that assessment. Everyone’s salary increase will be in that range, but at the beginning or the end depends on their individual performance.
Thus, salespeople, like everyone else, are rewarded for the overall success of the company and for their own contributions. The argument is simple: we want to change their minds. We want them to focus on doing what’s best for the company whether it’s selling, collaborating with other employees to solve customer problems, helping with debt collection, or spending time with other employees. important projects without necessarily having an immediate revenue impact.
By doing all that work, by becoming a multi-tasker in the company’s lineup, in the future salespeople will earn as much as they would get if they were still on commission, And so do I tell them. I also point out that they can take longer leave in the future, because they don’t have to worry about being away from clients; another person on the team will be available to assist in solving the problem. Above all, they will be content to be part of a thriving company and have the peace of mind knowing they won’t be left to fend for themselves when things get tough.
While all of this is true, some people are harder to convince than others. I have a great salesperson, Patti Kanner Post, who has been delaying the transition to salaried for years. But in the end, she accepted and switched from commission to salary.
After nearly twenty years with a strong team of paid salespeople, I can assure you that the system we created really works. Besides, it’s good for everyone, even though I’m the one who benefits the most. I’ve got a mounted company. I have people who work together and share the same vision. Although I had to try not to waste time worrying about the salesperson leaving and taking the customer with me, now that thought doesn’t even exist in my mind. It’s almost impossible for me to figure it out. And that is perhaps the greatest benefit: peace of mind.
I once heard him say that, if you run the company properly, employees will not be able to take customers with them when they leave. So what did I do wrong? I have created a lot of conditions for project managers and salespeople to serve customers. After one or two years, the employee leaves again with the customer. Every time I feel like I just received a letter from the IRS.
Let’s start by looking at your hiring practices. You can choose salespeople who want to stick around for a long time. You also need to be proactive. To avoid trouble, you and your operations staff should be in regular contact with customers. It’s the only way to make sure the customer belongs to the company and not to the salesperson. I am always careful not to encroach on the sales staff, and they are happy that I am always available to receive customers. My presence gives them a competitive advantage. They have only one reason to object: when they don’t really care about the company’s interests.
EVERYONE IS SELLING
From my point of view, selling should be a collective effort, and when I talk about a team, I’m not just referring to the sales team. I believe that in all companies, every employee makes a sale. I mean everyone plays a role in the sales process. Whether they’re in operations, customer service, or even accounting, they still have an impact on customers, and that impact for better or worse, affects their ability to close deals and keep them company. customer foot of the sales force. However, for a long time I would argue that the impact is only indirect. I can’t imagine how non-sales people could be directly responsible for finding new customers. But then one day, the staff changed my view of sales.
It was my wife, Elaine, who opened the door. We’ve heard a few complaints from customers about the way the company responds to calls, and Elaine – in addition to her other roles as head of human resources – decided something needed to be done about it. this problem. She found a company that trained employees to answer the phone and arranged for a teacher to teach employees during a three-day workshop. That company claimed everyone benefited from the training, so Elain decided to involve all of our sixty full-time employees, about half of the company’s on-site workforce.
It’s not a small investment – $10,000 for the teacher, plus the paid time of all enrolled staff – and I doubt we’ll get much benefit from it. I know that changing a habit is extremely difficult. I think the effect only lasts about three weeks. But I don’t like to discourage people from trying out new ideas, and Elaine is adamant, so we proceed.
Admittedly I’m curious about the staff’s reaction to the training program as we’ve never done this before. Most of our employees come from neighborhoods that are impoverished and have few educational opportunities. However, they attended the seminar enthusiastically. Obviously they enjoy the opportunity to learn new job skills. As teachers guide them through each lesson by topic – answering the phone, for example – they listen as intently as they can.
Then Elaine found a way to stay motivated. She sets up surveys to see what they learn, what they like best, and what additional support they need. In addition, she purchased a series of sixteen short videotapes from the training company to spark further discussions. The question is how? Despite being a teacher, Elaine has no experience in training staff. So she has to accumulate over time. She plans to hold meetings twice a week, each five hours long, with twelve people each. At that time, she would show them a video and ask the attendees to speak about the issue in question. She also set a condition that later became an important rule: each meeting had to have staff from every department, and the coordination between the groups would be constantly changing. The purpose is for attendees to interact with other employees they would never have met in their day-to-day business. Elaine thinks something interesting will come out of this.
Although I did not attend the meetings in person, Elaine and I discussed how things were going in the evening. She always talks about the excitement employees bring to the program or the bond it builds. She says participants love to have questions answered and love to tell stories – about their own experiences as clients, about how to apply skills learned outside of work, or about things that have happened. happens in the company. For example, during a meeting, a customer service agent named Denise praised
Christ, a warehouse worker. Denise said that last week Chris came up with a way to ensure timely delivery. Customers are happy to receive them and compliment the company’s performance. Denise wanted to pass on the compliment, otherwise Chris and the rest of the group would never have known about it.
Creating a bridge between members of different departments is the biggest benefit of the program. Despite their best efforts to build team spirit, every employee doesn’t really get it until they sit down in one room, chatting with people from other departments in the company. Suddenly, they could know each other’s names and faces. They get a sense of the problems others have to solve and they realize how work flows within the company. They understand well how dependent the driver is on the customer service staff, how the service worker depends on the warehouse worker. That’s when people started thinking about the company as a whole, rather than focusing on their own little piece.
As for Elaine, she uses meetings to reinforce her customer service message. “I don’t pay you guys,” she said, “but the customers. They just go through me.” She reminds people of the rewards they get for reaching a higher box count level and our policy of paying 110% of employee contributions into a 401(k) ( their retirement plans). “It is the customer who makes it all happen,” she says. “When Norman or someone else takes clients on a tour, it’s usually prospective customers. We want them to feel welcome. That means we’ll smile and say hello.”
We don’t need to take too long to see results. The number of complaints dropped almost immediately. The customer called me and asked if I had hired a new operator. Meanwhile, compliments about the service appear more and more. Elaine will give $25 to anyone who receives compliments, compliments so much that we can’t afford cash rewards anymore, so we switched to gift certificates and soccer tickets. This has no effect. The compliments are still coming. In the six months since the program began, we have received more compliments, phone calls and letters of praise than in the past fourteen years.
I was very surprised. I told Elaine that I couldn’t believe the staff change. Not only are they more attentive to their customers, but they are kinder to each other. She said they discussed the difference between internal and external customers and the importance of serving both. Apparently, the discussion worked. I can see a difference in my ability to handle special requests. Let’s say a customer needs to get a large amount of records in a short time. In the past, me or another executive had to be directly involved, messing with the usual system all the time, and messing things up. With the new level of teamwork in the company, employees can coordinate themselves with each other, ensuring that such requests are handled smoothly, without causing unnecessary trouble.
But the most convincing evidence comes from those who decide whether to work with us or not. For many years, we have always told our customers about our working environment. As part of the tour, we’ll take them to the warehouse area, where we’ll put up charts and graphs showing how we’ve organized the box game and how employees will be rewarded for summarizing money. the number of storage boxes increased. Visitors often ask, “Oh, can I apply for a job here?” One new client even sent in a letter saying he was sending five thousand boxes in the hope that we would take the next level and the staff would get a bonus. So I realized that employees play an important role in some of the decisions our clients make when signing with us, but I didn’t realize how big that role was until I saw the effectiveness of our training program. Elaine.
This discovery came about one afternoon when Louis, the company’s president, returned to our executive office with a potential client who had just toured our facility. We arranged a meeting at the end of the tour. As I sat in the office, I asked the customer if he was considering another supplier. “Yes, there are two,” he said, giving me their names. They are our main competitors.
My usual response is to compliment a competitor, say that the customer will be happy with one of them, and suggest that he or she be more satisfied with us. But for some reason, this time I asked under a different scenario. “Have you seen the difference between them and us?” I ask.
“Yes, I did,” he said. “All of his employees were smiling, and they all said hello. I’ve never seen anything like it before. They must be very happy.”
I hope so,” I said. “Thank you for your concern.”
“Actually, for that reason, I decided to collaborate with you,” he said.
I was completely surprised. We’ve almost never closed a deal so quickly. “It was wonderful,” I said. “I think you made the right choice.”
Then, reflecting on what happened, I realized that for a long time, I had made mistakes. I often assume that the business owner and the CEO are the decision makers about record keeping. In fact, usually the key player is also an employee. Even when they really don’t have the final say, decisions are based on all the information they provide. As employees, they tend to empathize with other employees, which is why they respond so warmly to our culture.
That’s also why sometimes our telemarketers can close a deal. From then on, I always try to create conditions for them to do that.
First: The salesperson is your representative in the market. Make sure you choose a salesperson who represents you well.
Second: Watch out for marksmen and prospective business owners, and never hire industry salespeople.
Third: Paying commissions causes division in the company and hinders team building. Don’t pay commissions unless you have to, move on to pay and bonuses as soon as possible.
Fourth: All your employees have an impact on revenue, either directly or indirectly. With the right training, you can teach them how to make a direct impact.