On your marks get set hire…

With the economy recovering, many organisations are once again thinking about growth and headcount, but the time it takes for new salespeople to break even is a major hurdle, says leading sales training company Imparta


While the cost of a new salesperson starts to affect a company’s bottom line as soon as they are hired, business-to-business salespeople may not start generating significant revenue until the following financial year. This significantly limits how fast organisations can grow their sales teams and still preserve profitability.

Research by Imparta suggests the true cost of hiring a new salesperson can be two-and-a-half times greater than their first year’s salary, once recruitment fees, induction costs and the impact of failed hires have been taken into account.

This creates a substantial hurdle – often more than £170,000 per person in the first year, according to the research – that new hires must overcome before they cover their costs and the organisation can make a further hire.

Imparta’s research identified four types of salespeople: sprinters, middle and distance runners, and non-runners who do not last the course. Only sprinters and middle runners have a chance of breaking even in their first year.

The key to unlocking growth, therefore, is to hire or develop more sprinters. So here are the key tools that companies can use to reduce the time it takes for new salespeople to hit revenue.

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INCREASE QUALITY OF HIRES

Salespeople are notoriously good at selling themselves, which makes it a challenge to determine their real capabilities. Most companies use hypothetical interview questions – “what would you do if…” – and psychometric tests. The best companies use in-depth evidence-based interviews, simulations and role plays to reveal what people will do, rather than what they say they will do.

They also consider a candidate’s “locus of control”.  Broadly speaking, people with an external locus of control tend to believe things happen to them, whereas those with a primarily internal locus of control believe they influence the outcomes themselves. Most sprinters tend to the internal end of the scale, which drives them to overcome any barriers they encounter.

SPEED UP RAMP-UP

The first few weeks after joining offer a great opportunity to turn distance runners into sprinters. Organisations need to transfer knowledge about their products and services as soon as possible, educating new salespeople not just in what those products are, but also in how to sell them. Good product training covers the typical customer stakeholders, their objectives, the common barriers to achieving those objectives, the impact of your solution, and the likely decision criteria and risks that customers will consider.

This knowledge transfer should go hand in hand with skills training in your sales methodology, using “learning by doing” rather than lectures, and be followed immediately by manager coaching to reinforce the new skills. A sales academy can help to provide a structure for this training and coaching, while building cohorts of new hires for mutual support.

Another important step is to inject new hires into receptive client situations early on. Imparta’s research shows that salespeople often develop into sprinters when they are introduced to an existing client or a receptive contact very early in their tenure. This helps to build confidence and grow informal networks early, before attempting to penetrate the hard shell of a cold target.

Businesses also need to understand that younger recruits, the so-called millennials, may resist integration into a more traditional sales environment. This generation uses different tools, especially social media, has different needs, and often values interest, fulfilment and fast career progression over immediate monetary reward. Sales managers need to understand how millennials expect to interact and learn, and what motivates them.

INCREASE NUMBER OF LEADS

If existing salespeople are busy enough to justify hiring new staff, they are probably also sitting on dormant or low-probability opportunities that would benefit from the attention of eager new eyes. Take an especially close look at accounts that have been a customer of just one part of your business for a long time and try using the new salespeople to cross-sell to them.

More generally, stronger lead generation at the company level will translate directly into more sprinters, so investment in salespeople should be matched by investment in lead generation. This lead generation should be focused on customer needs rather than your products; sprinters tend to bring insight to the issues their prospects are facing, rather simply to offer products and services.

INCREASE AVERAGE DEAL SIZE

Increasing average deal size can also accelerate the break-even for a new salesperson. The best companies target new hires at the most attractive markets and use a systematic methodology to expand opportunities into adjacent areas.

Sprinters also tend to have access to the right level of sales support. Technical specialists, service delivery managers and so on broaden the base of contacts in the customer organisation, uncovering new needs and making sure that the deals salespeople do win are big enough to carry them over the line.

IMPROVE CONVERSION RATE

Organisations can further accelerate break-even by improving the percentage of deals won against the competition and against the outcome of “do nothing”. Sprinters tend to gain early experience of working with an “A” pitch team, where they learn how to uncover the client’s decision criteria and to develop a powerful pitch strategy.

This can also be achieved using “deal clinics”, group sessions facilitated by an expert coach to improve the conversion rate while building skills and confidence.

Imparta is a global training company that creates lasting improvements in sales, marketing and service.

For more information and a free spreadsheet to help you reduce the time for new salespeople to break even, visit www.imparta.com/times or e-mail info@imparta.com