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April 04, 2006

Hiring Salespeople

I've been asked by an entrepreneur friend to talk about hiring sales people. My friend, like a lot of high-tech entrepreneurs, is a technical person who also has the role of CEO and Sole Salesperson, and they feel it is time for them to "bring in a professional" to "take the company to the next level."

Here's where I think a lot of entrepreneurs, particularly those that are bootstrapping, make a big mistake. They hire a VP of Sales and Marketing, capable of growing a large sales force. Maybe. The New VP spends a lot of time thinking about Positioning. They talk about Executive Selling, Leadership Alignment and Developing Value Propositions. What they probably won't talk about during the interview or after being hired is how many phone calls they are going to make to new prospects every day. When the sales don't happen, it's a product or market problem. (They say)

If you are leading a Rocket-fueled, VC-Backed Start-Up, maybe it makes sense to go right for the leadership who will then build out a real sales force. But if you are just hoping to get some sales help so that you can focus on the job of building your business, then you need someone who can first and foremost, SELL STUFF.

I'm not an expert at hiring sales people, but I can tell you what doesn't work from experience and I can pass on some things I've observed about the people who can sell.

The best sales people jumped right in soon after they arrived.  My company sells a complicated product so new people do have a lot to learn, but the best people were on the phone and planning visits pretty quickly.  If they are too afraid to make the calls then they may not have what it takes.  The biggest failures obsessed over learning every last detail of the product and industry at the expense of just getting out there and working with customers.  The successful people were quick to admit that they weren't experts yet and they were good at getting other people (engineers, sales support, the CEO) to help them fill in the gaps.  And the successful sales people don't try to fake it with customers.  We sell to smart, technical people and they can smell a fake a mile away.

Great sales people know how to establish relationships, and it starts before they even walk in the door for the interview.  They try to get introductions from people we know and respect.  They research our company and even if they are from outside the industry, they walk in with a decent knowledge of what we do.  They try to connect with everyone that they meet here, starting with the person who greets them at the front door.  (As a sales person, you need to understand that EVERYONE you talk to at a company has the potential to kill your sale.  If you act like a jerk in the lobby, you'll never get to the board room.)

I have said that one of our best sales people walks the line between persistence and annoyance.  I've never had a complaint from a customer saying he was pushing too hard, but I know that he is not afraid to tell a customer that it is time to sign.

The hard part about hiring sales people is that if they are any good at all, they will generally interview well.  If they can't sell themselves well, how are they going to sell your product?  If they don't do a good job preparing for the interview, if they haven't researched your company and if they haven't cared enough to find an introduction (and this is their career they are pitching) then they probably aren't going to do a good job selling your product.

Someone said "Past performance is the best indicator of future success".  If a sales person is unemployed then they need to have a really good reason for it, like they made so much money in their last job that they quit to travel the world.  Companies don't usually fire or lay off great sales people so you have to be skeptical when a sales person is not employed I think.  I know, everyone experiences set backs and may find themselves in tough positions, I'm just saying you need to be very thoughtful about this.  (One of our best sales people was unemployed when we hired them, so there are exceptions to the rule.)

My entrepreneur friend is at a critical point and I see a lot of companies get stuck here.  It's easy to hire someone with a great resume who is more interested in managing than doing.  In a small company you just can't afford that.  The one nice thing about sales people is that there is an objective measure of their success.  They sell stuff.  It may take a while for them to get started, but at some point they have to sell.

I welcome any comments about hiring sales people.  Please share your thoughts if you have figured it out, or if you just want to share some of your mistakes. 

April 4, 2006 in Entrepreneurship | Permalink

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» Hiring Salespeople from Startup Fever
Terry Gold shares some advice on hiring salespeople: If you are leading a Rocket-fueled, VC-Backed Start-Up, maybe it makes sense to go right for the leadership who will then build out a real sales force. But if you are just hoping to get some sales ... [Read More]

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» Hire Education from Kitmondo.com
Terry Gold has posted some good advice for startups considering taking on their first sales person. He describes two types of candidate you should be on the lookout for: Candidate A: “the New VP spends a lot of time thinking [Read More]

Tracked on Apr 13, 2006 6:59:40 AM

» Sales Away from Entrepreneurs Viewpoint
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» Hiring Your First Salesperson from Altgate
I was recently asked about this topic by a talented first-time founder/CEO and decided to post this excerpt from my response. So you want to hire your first salesperson? As founder of your company, you have raised some initial capital, [Read More]

Tracked on Sep 17, 2007 12:32:33 PM

Comments

Excellent article. We are getting ready to hire our first VP of Sales, and your article helped with strategy for hiring and setting expectations. Thanks for taking to time to write this for everyone.

Matthew

matthew@roachclip.com

Posted by: Matthew | Apr 8, 2006 12:40:12 AM

Terry, I like what you have to say about hiring sales associates it is one of my toughest challenges your blog was very insightful. I am also new to the idea of blogging and you have set a good example for me to follow. I am very interested in your pod cast and encourage you to keep it up. Best,

Theron McCollough

Posted by: Theron | Apr 8, 2006 8:58:02 PM

Great words of wisdom! Terry's advice on hiring the right salespeople at the right level is so key to a startup's success! Given the nature of a startup, sales is THE key area where you cannot make any mistakes! The consequences are unforgiving unlike even a mature company where they can coast for a while when the results of hiring not so good sales people are hidden from view!

Thanks, Terry!
Nari

Posted by: Nari Kannan | Apr 9, 2006 8:16:30 AM

Thanks for this great post.

Our company is going to be one-year old in may, and we are now growing our sales team.

My first employee is now my sales director, and thanks to her job and her incredible sales mentality, we grew a lot faster than expected. Your comments are very interesting, as we are expanding our sales team now, and it is definitely hard to pick the right candidates.

It is so frequent to interview sales people that have not done any "home work" about our company and who we are... not a very good sign, as you point out.

I do feel that it makes more sense to recruit "good " sales people, even if they are not so familiar with your business / product / industry, than try to make a good sales rep from someone with good technical knowledge, but not that "sales drive".

Thanks!

Posted by: Julie Turri | Apr 9, 2006 5:47:49 PM

Thanks for sharing your thoughts.

We are currently thinking about hiring our first salesperson and we don't have any past experience doing that. I read a lot of articles like "how to hire a salesperson" and while I got answers to most of my questions there are still some things I am not sure about. One of them being a compensation. There are basically three camps out there:
1. no comission, just salary with bonuses
2. low or moderate commision + salary
3. good commision and no salary

Each has its own rationale and each seems to work to whoever advocates it.

It would be great to know your thoughts on that. I understand that it depends on lots of factors, but as far as I understand people tend to favour one or another. So what do you think the best compensation schema for a sales person? Is there anything else besides money which motivates a good sales person?

Thank you!

Posted by: Dmitry Skavish | Apr 11, 2006 11:26:51 AM

Thanks for sharing your thoughts.

We are currently thinking about hiring our first salesperson and we don't have any past experience doing that. I read a lot of articles like "how to hire a salesperson" and while I got answers to most of my questions there are still some things I am not sure about. One of them being a compensation. There are basically three camps out there:
1. no comission, just salary with bonuses
2. low or moderate commision + salary
3. good commision and no salary

Each has its own rationale and each seems to work to whoever advocates it.

It would be great to know your thoughts on that. I understand that it depends on lots of factors, but as far as I understand people tend to favour one or another. So what do you think the best compensation schema for a sales person? Is there anything else besides money which motivates a good sales person?

Thank you!

Posted by: Dmitry Skavish | Apr 11, 2006 9:58:43 PM

Many software companies have products, but also have a custom application side to the business. At Gold Systems (for example), the salespeople have to identify where to focus their prospecting time. A Product sales strategy means you are off to the races to hit as many prospects as possible – either your product meets their needs or not. On the custom side, a sale may take over a year and will involve multiple contacts and many variables. At this point you may have to “focus on the few” and close the sales with a realistic probability, so as not to take away from your product selling time.

I absolutely agree about sales activity. No matter how you choose to manage your time – you must be outbound. If you are selling fallen trees in a forest – someone has to hear about it to make a decision!

Posted by: Andy Marcopulos | Apr 13, 2006 11:41:42 AM

Yes, your comments are important, but I would add that if you do not have a sales strategy, sales plan, value prop, differentiators, demos, messages, target audiences, etc., and you require Solution selling (not shrink wrapped software selling…yawn), you will struggle building anything more than sales based on current relationships and chance - Shooting Elephants, as we call it, living from one big contract to hopefully the next, a quarter or a year at a time.

In addition, without these key pieces of sales collateral, your sales people will not have the confidence to convince the world that your product is the one that stands out. “Why should I buy your product?”, “Why do I need this technology?”, Why are you better then company X”. Without the basics, no sales person can sell your stuff (unless they are really good liars).

Frequently, small companies rely on their core members to do much of the selling. Those people have been part of the company for a long time, they have seen limited success, they may have a vision of the future, and they have been able to get the company through to a certain point. But, when it comes time to scale, it is a complex formula of strong marketing, services, product, leadership, and sales. It requires repeatable processes, strong people, and innovators.

Truth, smaller companies are best off hiring sales people (and others) that are strong in many areas. Small technical companies must have strong technical sales people - try putting a "coffee buying" sales person in front of a technical sale (without a strong technical support staff). It doesn't work. So, it is more than beating down the door.

I think the strongest message in your post is to not hire a bunch of supervising managers to tell people to get the work done. Everyone needs to share in everyone's responsibilities in a small company, and as you grow, you can specialize and fill those holes. Once you have a repeatable sales process in place, you can hire inside sales people and less technical sales people to beat the doors down and walk the line of being obnoxious.

Great topic; I am glad I took a look at your Blog.

Posted by: Helmuth Naumer | Apr 13, 2006 10:50:55 PM

I think the #1 mistake people make is hiring a VP of Sales. Many people in sales management were OK at sales, but really don't like doing it. The person who would be a great VP of Sales for a 100-person company may not work out at 10-person.

Hire a senior salesman who can think dynamically and work independently. If they're good at the management/strategy stuff, you got lucky. If they're effective at sales, you hired well. Once you have 3-4 good sellers in house, then start worrying about management. No one gets the title until the sales organization deserves a VP/director.

Posted by: John Stafford | Apr 18, 2006 12:33:51 PM

I believe that many early-stage high-tech companies overemphasize technical knowledge when they hire salespeople. Once a company's development is beyond the early adopter customer stage, it's much more important for the salesperson to understand how to map the product/technology to the prospect's business problem, and how to communicate solution value to the business-line manager who has the problem. It's obviously necessary to also be able to sell the technical side of the product to the technical decision maker, but my experience is that technical support people are the best folks for that job.

Posted by: Andy Blackstone | Apr 28, 2006 9:55:05 AM

Good points Terry. I am a VP of Sales and Marketing (presently consulting, last VC backed company got sold, had to say that!)

I have worked exclusively with entreprenuerial early stage companies in my 15 year Senior Management career. However I am a salesperson! I sold for 12 years prior to my first VP job.

I believe that the best route is to hire salesfolks first. You need to know your product CAN be sold before you should spend the money on a real VP of Sales.

Any good VP of sales that has an understanding of building revenue for an early stage company must sell first. Salespeople need to know you can do what you are asking them to do or they won't buy into any program the VP is trying to sell them.

The VP should be your best, strategic salesperson maybe not the best hunter but the guy who can cut through the 'crap' with prospects and get them to sign or stop wasting your valuable sales resources' time.

So I think the comments here all fit the bill, but also know that sometimes hiring a selling 'VP' allows you not to get involved in customer situations that take your business in the wrong direction...not every customer is a worthy customer! So regardless to which way you choose hire 'selling resources' and a good, experienced strategic mind is an added bonus.

Posted by: Paul Smith | May 1, 2006 4:10:20 PM

I think a lot of technical companies under emphasize technical ability in the sales force. I've been too many places where the sales reps weren't capable of visiting the restroom without an SE along to answer questions. A sales rep that can find the prospects, and handle the meeting and at least the first level technical questions without needing an expensive engineer or developer along for the ride is worth a lot IMHO.

Posted by: COD | May 3, 2006 1:36:44 PM

An added point.

I think it is important to remember that selling is a process, a process an experienced sales professional knows best, as development is a process that an experienced developer knows best.

I have seen many technical based start-ups not understand that and question the need for the tools of the trade because 'they hate it when sales people do that to them'. Let the salespeople sell and support their knowledge of their craft. They need to develop some tools to be successful. You need to allow them to build or organize those tools and support them in that process. They are the pros if you can't allow that, don't hire sales people yet.

Posted by: Paul Smith | May 5, 2006 6:52:04 PM

Many of Terry's comments reflect a myopia that is all to prevalent in the high-tech world: "Just put a good salesperson on the job and we'll gain revenue!" (never mind profits, customer satisfaction, and other value-producing deliverables). It's not surprising that most tech entrepreneurs think of their offering as "rocket fueled" and they are passionate about what their product does. But that passion is misplaced: they don't understand what their prospect wants to buy, and that is the reason Terry observes so many sales executives become mired in the strategy that he seems to find so annoying. And why shouldn't it be annoying? All that up front work requires time, thought, and asking and answering hard questions and who wants to do that?

So it is convenient to assign blame to the sales VP who might be (or should be) focused on the following BEFORE calling embarking on costly outbound campaigns:

What are the characteristics of our target customer?

What do they want to buy (in terms of outcome)?

How does our product or service align with that outcome?

What value does our solution represent in terms of dollars?

How do we communicate that value?

What steps or processes do we use for sales?

How do we qualify or vet our leads?

Do we have a compelling customer reference?

Do we understand how to identify, prioritize, and mitigate our sales risks?

How do we compensate our sales force in a way that is congruent with the value we need them to provide?

If you don't have the answers (or at least a notion of the answers) to these questions, then you are guilty of a "point and spray" mentality toward selling, and there is high probability you will be dissatisfied with the results, which will most likely be failure.

A highly-talented salesperson cannot compensate for the lack of strategy or situational awareness. While Terry is correct that great salespeople know how to network and get appointments, sales that result from networking alone create a revenue "sugar high" that cannot be repeated or scaled. The takeaway: you need more than just contacts to sustain a sales campaign, and it's totally appropriate to want to build that up front than to suffer the pain of getting shot down after a 6 or 8 or 10 month sales cycle because you didn't have (you fill in the blank).

While I believe analysis paralysis is real, and that a degree of "ready, fire, aim" is needed for agility, if companies continue thinking sales talent alone will overcome poor strategic visioning and execution, people will be wringing their hands like Terry five years from now and saying "Gee, we just can't seem to find and keep any good salespeople."

Posted by: Andrew Rudin | May 11, 2006 9:40:33 AM

Sales and Marketing is a gift. Its all about building relationsships. This is the one thing I have a hard time teaching the people I hire for sales and marketing. They think its about the number of contacts they see each day.

I am a small business owner and has sold for my company for the past 5 years. the reason I found your site is I am having a hard time finding sales people and keeping them.

Posted by: Jeannie | May 1, 2007 5:54:27 PM

Great article.

We are currently seeking part-time sales help for a design company. Any thoughts on how to find the right person in our area to assist with finding us work? We will pay based on what they find.

Posted by: E. Rachael Baird | Jun 25, 2007 12:36:53 PM

Great article. It is important to separate the “talkers” from those that truly understand “selling”. A true sale professional will be be able to explain the sales process during a job interview. What are the steps they use to turn a prospect into a client? If they can’t answer that question, you have a “talker” and not a true sales professional. Training people on this process is what we do at the National Sales Center. We’ve found that some of the most experienced salespeople need help in this area.

Posted by: Nick Moreno | Sep 24, 2007 12:34:01 PM

I manage a small construction product, {start up} company with offices in middle and western Tennessee. Our firm has decided to hire a new sales person. Your Blog is very informative, thanks for the help.

Posted by: C.E. Kelley | Oct 7, 2007 7:50:34 PM

just can’t believe all these article regarding I just about employ vp this and head of sales that … I been in sales for over 20 years I enjoy the new business side of selling I can’t understand why anyone would want give up freedom of having full control of their destiny to being someone who hated by ex- office admin person with nice smile who thinks they can sell good sales people enjoy selling, one other thing sales person who can’t cold call isn’t sales person also add if your looking to hire sales staff look for people who had experience with selling goods and services that people get emotional attached too like cars ,home and mobile phone one that doing really well are good listeners key skill for 21st century selling

Posted by: patrick uk | Mar 10, 2008 5:58:00 AM

Good article. Albeit, most small companies do not understand what a VP of Sales is much less what they should be and the capabilities they should possess. So, I agree with you that great sales people already do what they say and say what they do - the problem with small companies and large companies for that matter - is that they don't understand that greatness is not what a sales person will tell you - if they are any good - they give off a different set of vibes, a different set of goals, a different set of challenges - cause no great sales person believes they are great - yet - they know they are in the top 1 percent and they must believe that they haven't reach their peak yet - they need to keep their edge - so arrogant - yes, confident absolutely - run circles around you and kick anyone's ass - yes -

So, stay away from VP of Sales who can't sell and they tell you they have relationships and can get great sales people - they can't - most companies end up with crappy VP of Sales - never met a VP of Sales that ever did anything for me - except use all my ideas - and make me leave because they were idiots - and most don't have relationships with anyone except those they can trust - not to tell their secrets- and stay the hell away from sales people who think and say they are great - you need to look for old MCIers - like in the mid 90s - we are the ones who still strive to be great - can run circles around any VP of Sales - and are in a turnaround mode all the time and that is what great sales people do - they never rest on what they did years past, a few hours ago or even what they will bring in next quarter - they are trying to beat whatever they did, they do or thinking about doing next year - you don't give them quotas - they already know what their W2 will say - cause it is all about winning and money - and one more thing -

Great sales people don't even know they are considered sales people - cause they are too busy - with increasing their skill that you probably won't even recognize them either -

So, if you are lucky enough to meet one much less work with one - you will be blessed -

Posted by: Jan Simpson | Oct 11, 2008 3:39:58 PM

The article is good provides useful information about Hiring Salespeople which is not a easy task.Great sales people know how to establish relationships, and it starts before they even walk in the door for the interview.I like the article very much as it is very informative and hope to see more of such articles.

Posted by: Hire Outbound Support | May 20, 2010 1:04:33 AM

awesome article Terry, I especially agree with your comment about the best sales people walking a fine line between persistent and annoying. I've also had some luck using www.Guru.com to find sales people.

Kathleen

Posted by: Kathleen Foley | Dec 8, 2010 6:25:11 AM

I think it is important to have proper qualifications for a sales job. Not to say people can't come in and be taught but when it comes to sales you will get better results more times than not with more qualified people.

Posted by: Richard | Feb 9, 2011 2:11:16 PM

Really, my name is Terry Gold, a different one. 15 years of sales and 12 in complex software to F500 companies. I hacve successfully sold to global companies while at large and startup companies.

Weighing in, mostly all valid points. Early stage, hire very competent sales people you can get your hands on, not exec type. You should have an all out clever hunter and a strong closer. Typcially very different people and if you get one that can do both you are VERY lucky. They are ALL going to tell you they are both, but how do you know?

Definitely stay away from the roladex types as they will exhaust it in the first month with nothing if your product is complex, expensive and you have few references. I do disagree with two points that Terry makes and i have the experience to back it up: 1) I DO NOT want a sales person to show up and jump right in meeting with customers if they do not know what they are talking about. You get one shot if you get that meeting as a no name company, and wont get back in the door yet your company reputation is minted as such and cant change that. What are we talking about, a month to get them trained up if they ar ethe right perosn? Would rather spend that month solid than stretch it our over 6 months and their being dependent on an engineer and not really getting there quick enough. If they cant cut it in the first month knowing the technology and problems we solve, then cut my losses than invest 6 months of no results before i do something about it. 2) Thinking too much instead of doing. This is easy to solve, inspect what you expwct and easure what is getting done. So partially agree but do not confuse thoughtful strategy with doing nothing. I have seen many reps perform ALOT of activity and get nowhere taking barking orders from gatekeepers. On the other hand have seen strategic thinkiers that get into the boardroom without a roledex from nothing but very smart choices. You can always measure volume and effectiveness if you are a good manager. If not, then you do need a good VP of sales to do so!

One more thing. When interviewing a salesperson,m I always like to know a) how they qualify an opportunity, b) walk me through the Enteprrise sales process, c) How do you know when the deal is going to get done (the answer is when you understand clearly the customer's perception that if they dont get the deal done how it will materially impact their operating non-technical vbuainess (dont have that no big deal is getting done), d) tell me about you proudest deal, why, and your most valuable loss and what you learned from it. I want them to walk me through the whole thing so i know i am not getting BS'd by a fairy tale. e) Lastly, you MUST separate the ones that walked into deals and the ones that hunted them down. I get into understanding where their deals came from, asking them in the end deal by deal they spoke about because they cant BS that fast. Avoid IBM'ers that have a business card flash pass that gets them into any meeting just by being IBM (as a startup anyhow). I also dont want someone who hasnt worked for a late stage operation at least once either.

Hope this helps someone out there.

Posted by: Different Terry Gold | Sep 16, 2011 1:36:07 AM