This is the first part in a series on managing sales to beat the team’s quota. The other posts are on onboarding new reps, setting the quota, culture, managing and coaching, and aligning sales and marketing.
Depending on the study that you see, 40-50 percent of B2B salespeople aren’t meeting quota. (These numbers will vary considerably by industry, and company, of course. Some actually put the failure rate much higher.)
Roughly 40% of sales managers aren’t meeting their quotas, either. For those who are, they may be relying on the success of the “20%” in the 80:20 rule – a small number of star reps are exceeding quota by enough to bring the entire team over the goal.
A 40-plus percent failure rate is pretty high. Would that be tolerated in any other part of a company? It’s said that “what you can’t measure, you can’t manage”, but here we have a clear measure of failure. Clearly this isn’t just a failure of individual sales reps, it’s a failure of sales management.
This is the first of a five-part series that I will roll out over the next few weeks on how to manage sales to better reach quota. Part one: hiring the best people.
Hiring
If you aren’t hiring the right people, everything else you do as a manager may be irrelevant. As legendary Alabama coach Bear Bryant used to say, “You can’t make chicken salad without chickens.”
With such a high failure rate, it’s fair to say that many people who are in sales shouldn’t be; some consultants put that number as high as 55 percent. How did those people get hired?
Many sales managers were former star reps. That change of roles is difficult enough; it often takes a new manager 18 months or so to really get comfortable, let alone competent, in the role, and the training for managers varies considerably from company to company. A former sales star has to resist the temptation to go out with the reps and close the deals himself. Some star reps will never be outstanding managers and can contribute more value to the company, and very possibly make more money, by staying in a rep position.
Writing the job description
The first step to hiring is writing a good job description so the right people apply, and so people in your organization know what you’re looking for when they reach out to connections who may be possible candidates. Be specific about what the person will be doing, for example,will sell to business unit managers at the director level, will be engaged in 3 to 6 month sales to the C-suite, will do 90% of sales by phone and web demo.
Make sure that your job requirements really relate to success on your job. Let’s look at just one common sales position requirement: Sales quota over-achiever. Documented history of closing six-figure deals and exceeding $1M annual quota.
Now consider two applicants:
- Applicant 1 has the history of closing $1M-plus in six-figure deals annually while working at companies with big brands that provide a lot of tailwind to sales. Can she do the same in your company without that marketing and brand support?
- Applicant 2 has an excellent track record of selling mid-to-high five-figure deals in smaller companies that did little marketing and have little brand equity. Moving to your company would be a step up.
Applicant 1 may have a better track record on paper, but Applicant 2 may be the better seller, and may be more enthusiastic about your position. The leap from selling three- or four-figure deals to six figures is considerable; the change from closing five-figure deals to six-figure deals is one that many good reps can make with little trouble. But Applicant 2 may not even be seriously considered because of the deal size at the companies she had been working at.
There are many types of B2B sales: inside versus field, short transactional versus lengthy consultative, growing existing accounts versus closing new logos, etc. Consider the skills of the person in each and how they map to what is really needed to succeed in your company. Make sure that your job description has requirements that in fact have to do with success on the job. And look for skills and capabilities, not just the track record.
Should you use aptitude tests?
How about aptitude tests? For a supposedly scientific field, there is a bewilderingly wide range of tests being used. Here are just three that I’ve personally taken:
- Two-hour personality test administered online
- 30-45 minute structured interview conducted over the phone with the interviewer keeping notes but not recording
- The 10-minute, two page Predictive Index test
Of course, they all claim to provide scientifically validated results that can predict which candidates are most likely to succeed.
And a lot of resources are now being applied toward developing new, supposedly more reliable, tests. Knack, for example, is a company that claims to be able to evaluate the qualities of job candidates based on them playing Knack’s online games for 20 or 30 minutes.
Update: I posted a question in a sales management group on LinkedIn related to hiring, and most of the comments mainly reinforced what I’ve written here. A few people had other assessment tools that they recommended. Again, there is a very broad set of options here and I don’t have knowledge on which of these, if any, are actually predictive of on the job performance:
- Devine Group assessments tools
- Profiles International
- Korn Ferry’s learning agility assessments
- Sales Candidate Assessment
How to interview
It’s very common that, in the absence of training on hiring and a scientific hiring approach, a manager will think that his personal path to success is the only path and should be the guide for whom to hire. He wants to find others from a background similar to his, with similar attitudes and aptitudes thinking that that’s key to success. In fact, there may be many other backgrounds that would produce winning sales reps, too – possibly even more successful than the manager had been.
In a study by the Corporate Executive Board 74% of managers reported recent hires had a personality “similar to mine”; some managers indicated a preference for particular candidates based on nothing more than shared leisure interests. Studies that show that tall people are paid more and that resumes with African-American names are less likely to result in an interview really undercut our belief that we live in a meritocracy. So by consciously or unconsciously defining the profile of a successful rep too narrowly, the manager is also likely cutting out potentially successful candidates. Hiring managers need to look past individual experiences and prejudices to the real capabilities of the applicants.
The interview is one way to determine the capabilities of the job applicants. How can you use interviews to improve your hiring track record? Here are a few methods:
Go through their resume and for each of their last three jobs ask these questions:
- How did you get hired?
- What about the job and company appealed to you?
- What was your biggest success at the company and how did you do it?
- Why did you leave?
The first question is most important for senior positions. If they’re fairly senior, and good, they should have gotten many, if not all, of their recent jobs through referrals from people that they worked with before. You can see how their answers to the second question map to the kind of company that you are, and whether that suggests whether they’d be a good fit. Question number three should be a softball: if they’re in sales they should come to the interview prepared to talk about at least one or two successes at each job. If they aren’t, that’s a huge warning sign. And question number four should help you determine how likely they are to stay at your company.
Ask the applicant to sell something to you: their cellphone, car, notebook (They did come with a notebook, right? And are jotting down some things you’re talking about? A good rep should), whatever. See how well they can improvise on the spot and how they sell. (An Expert sign is if they ask you a few qualifying questions before diving right into their pitch!) Then talk over the pitch with them and ask them to make a few changes and do it again and see how coachable they are.
If they have good industry experience, ask them how they’d respond to some typical sales challenges or objections: “What would you say to a CEO who says that they are not seeing good results from your product or service, and are thinking of discontinuing it?” or “Explain to me the value proposition for this line of products.”
Ask “Why do you want to sell for us? What is it about our products and services that you think are superior and are a reason why a customer should buy?”
You want a salesperson who takes personal responsibility. Aside from their professional accomplishments, here’s a question to help determine that: first, ask the applicant to describe something they did that they’re especially proud of. (They may have answered that with question 3 above.) Hopefully it will be in sales, but it could be anything. After they’re done telling you that, ask them to describe something that failed and why it failed. (And don’t accept “I can’t think of anything that I’ve really failed at…” We’re all professionals and we’ve all failed in our careers. And if we haven’t, we aren’t trying hard enough.) What you’re looking for is the person who takes responsibility for the failure and what they learned, rather than they blaming colleagues, supervisors or clients.
You want a team player. Ask the candidates what they would do if there was a situation that came up in which they simply couldn’t meet all of their deadlines or responsibilities – the customers’ schedules have shifted and now complex proposals are all due at the same time, whatever. Don’t accept “I’d work harder and get it done”; that’s not a possibility in this scenario. The “right” answer is that they’d come to their supervisor with the problem and ask what the company’s priorities are.
(By the way, those last two questions are examples of structured interview questions. Xerox has found that using structured interviews and tests produces a far more successful set of hires in call center and customer-care roles. Malcolm Gladwell has claimed that it’s the only form of interviewing that’s been proven to produce better hires.)
Finally, see what kind of questions they have for you. Did they do their research and come in prepared with thoughtful questions?
Hiring is one of the most important responsibilities of a manager. In sales, the cost of a bad hire can be especially high not just in their salary and benefits, and time put into their onboarding, but even more so in lost sales. Following these suggestions may help increase your number of good hires.
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