If the CEO of a small company has decided that he will sell, it is only a matter of time until he realizes he’s no longer able to both sell and manage. Usually he decides then to hire someone who will “take the sales off of his shoulders”.
It is often the case that a few months later the same CEO dismisses a salesperson who has failed and returns to the starting point, only poorer by the lost time and unclosed leads. Sometimes the cause of the problem is hiring the wrong person, but we’ve also notices that CEOs often unwittingly increase the chance that a good salesperson in their company will not work out.
Regardless of how nuanced your customer acquisition is, no salesperson will get 3 customers from 2 leads. Let’s assume that the only sales person in the company is the CEO. The company has convinced 5 out 20 generated leads to start the cooperation (a high 40% conversion).
A good salesperson will probably have better sales skills than the CEO but less understanding of the market and business context (this is obviously a simplification — just like the whole example). It is possible that the results of a good salesman will be a little better or a little worse than the CEO’s.
If you plan to hire a salesperson, then you should also plan where the leads, which later this salesperson will convince to start working with you, will come from. If there are not enough of them, it is very possible that even the best seller won’t be able to earn back the costs he generates. This paragraph describes a very simple and intuitive regularity: “no leads, no sales” — however, it was based on situations observed at companies that are our customers.
It is very likely that the new sales rep will have deficiencies in:
– understanding the market in which you operate (how exactly you differ from the competition — careful! “Quality”, “innovation”, “very good customer service” are not specific enough distinguishing features),
– knowledge about the intricacies of the product / service he sells (you know very well why 2 years ago projects with some customers didn’t have a chance to succeed — a new salesperson must learn this),
– knowledge of the unwritten rules according to which your company operates (the head of customer service Mark doesn’t like being interrupted at work, and Zoey, who evaluates projects needs 2 days for the preparation of the valuation).
– deep understanding of customers (you’ve seen many times how a problem that a customer wants to solve affects several areas in his company – although not every customer explicitly mentions it).
“If someone is resourceful and dedicated, they will make it” — yes, it’s possible, the question is how much time, energy and company money will be lost by learning through trial and error. Preventing such a situation through e.g. cyclical 1on1 meetings, during which the CEO systematically straightens out the salesman’s mistakes is less costly for the company. It also reduces the risk of firing a good salesperson because nobody thought about giving him the necessary information.
In addition to running a company, CEOs often engage in customer service, recruit employees, manage them, co-create the shape of the product / service, try to adapt the company to changing market conditions and closely follow competition’s moves. Salespeople usually don’t do all these things.
Due to the fact that their knowledge of all the nuances of the product and the market is smaller than that of CEOs, as a rule, they can’t “connect the dots” as well, e.g. when testing the needs of a potential customer. Nor should they be expected to, like many CEOs, work 60 hours a week and devote their weekends as well.
Often when I talk to potential customers that we are supposed to help find salespeople, I hear a similar statement:
“We are fascinated by the development of our product, but even though we had several customers from recommendations we have no idea how to sell it. It’s also difficult for us to say what contributes to the fact that some companies need it very much, and for others it isn’t that necessary — let’s hire a salesman, let him think about what we should do!”.
The salesman must be able to explain why your product will solve customers’ problems. That doesn’t mean, however, that he will come up with who by and how this product should be used. So he probably won’t find out what problems this product solves and where they occur most often.
As the CEO of Casbeg has noted — the seller should be a fuel for the company’s sales, rather than a match. If the company already has a confirmed target group, you also need to think about whether you are looking for someone who will sell or someone who will create a sales process. Usually this is not the same person.
1 hour of meeting at a potential client’s office can take 2-3 hours of work including commutes — assuming that the meeting takes place within the same agglomeration. In this situation, the costs invested in acquiring customers will only be earned back if the product price and margin are high enough.
Not every transaction should include meetings other than a phone or video conference (there are also products which sales shouldn’t include salespeople at all). The salesperson won’t bring the company profits if he works as part of an unprofitable sales model, only because someone came up with the idea that the sales conversation must take place in the potential customer’s office.
Oftentimes, the CEO wants to transfer sales to a new salesman so much that the moment of his employment and implementation are maximally accelerated. Unfortunately, doing it too early and an overly superficial introduction into the company may cause the CEO to lose a few months for a salesman who will eventually fail, and you will have to wait another couple of months for the next recruitment process to be completed.
You don’t want to fire a salesperson only because of your mistakes, right?
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