Hiring Sales Person #1 – Money down the Plughole?

Hiring the first sales guy is a big step for any startup, and one that it’s really easy to get wrong.  Even the best hiring managers make mistakes, which results in money down the plughole, but I believe the trick is not to let mistakes drag on for too long…

Great sales people joining a startup will usually not be able to start selling straight away – they will feed back that, for example:

• A more customer focussed message is needed
• The website needs to be updated
• The presentation needs to be honed
• New supporting materials are required

Great sales people will then work with you on getting these things right, then start taking meetings.  There will probably be quite a lot of early meetings that don’t appear to make any progress because they are trying to find the right people within target companies, and are being referred on from initial contacts.  After a number of months, it will become apparent that sales are imminent and eventually signed contracts will appear.  The money spent employing this great sales person has been an excellent investment.

Poor or unsuitable sales people joining a startup will quickly find “displacement activity” to disguise the fact that they have no idea or inclination to  sell.  They will invent problems, for example:

• A more customer focussed message is needed
• The website needs to be updated
• The presentation needs to be honed
• New supporting materials are required

They will for weeks or months on these “preparations” before eventually, reluctantly, starting to talk to potential customers.  They will have plenty of meetings but these will be neither focussed nor productive and they will bounce around inside target companies desperately – talking to anyone who will give them time.  In spite of this they will file positive meeting notes and say “it’s just a question of time until we get a big sale”.  The sale will never materialise.  The money spent employing this person has gone straight down the plughole, and months have been wasted.

These two scenarios sound pretty similar until you look at the outcome – which comes months into the engagement.  How can we identify sooner whether we have someone in the “great” or “poor/unsuitable” category?

Here are my three tips – which I’m afriad to say were learned the hard way:

• Hiring well helps – be careful to avoid the pitfalls I described in 8 Top Reasons for Hiring a Loser
• Don’t let displacement activity get out of hand – for most companies “good enough” materials can be prepared in a few weeks then refined based on customer feedback.
• Activity and progress are not the same thing – monitor and reward only progress.

Monitoring sales progress is the subject of many books – I don’t think there is one right answer but I am happy to recommend a couple I find useful.  DEI Sales have one entitled “Rules of the Road for the Sales Team” which is available as a free download.  Check out “Rule #5 – Salespeople must be able to answer thehard questions” for tips on how to establish how much progress has really been made.

Bill Stinnet’s book Selling Results is really a sales book but is has great worksheets for opportunity assessment – sitting with a sales person and working through these is a pretty good way of checking progress.  The worksheets are all available in eletronic form, but are of most use after reading the book.

CRM systems have progress tracking built in, which is very useful for automating larger sales forces and producing attractive reports.  Like any software however, CRM is only as good as the data entered into it – just because (a poor or unsuitable) sales person believes an opportunity is moving through the stages doesn’t mean real progress is being made.  The sort of frameworks I suggest above (and many others) are a compliment to CRM – either helping to determine what stage is assigned in the software or enabling a manager to validate/challenge the stage that has been assigned.

Monitoring mustn’t become intrusive or hostile or it will be de-motivating to even the best sales person, but management can and should use sufficient monitoring find out if sales people are making real progress.  This will help to identify any problems early, when they can be addressed without losing too much money down the plughole.