How to Hire a Salesperson

LCT Staff
Posted on June 1, 2002

Maybe you have a small sales department, employees that work in-house to primarily maintain your current accounts and provide customer service. Maybe you have a supervising sales manager who hits the road occasionally to talk to your current customers and get feedback on what they?re looking for. And maybe once in awhile your sales manager gets leads that he or she follows up on to try and bring in new business. A dedicated salesperson, focused on building new relationships and soliciting new business, could be the missing piece of the puzzle that takes your company to greater heights.

Find the Right Employee ?The first salesperson we hired was actually someone that I knew who had already been in the business,? says Jim Baron, chief operating officer for RelyTrans in Los Angeles and 20-year industry veteran. ?This salesperson knew the way that I operated and knew the quality of work that I was looking for.?

Hiring someone who is already familiar with the industry can be a tremendous benefit. Not only does he or she understand how the industry works, but they?ll also know immediately how to communicate to potential clients. ?Part of it depends on what market you?re targeting and who you?re trying to reach,? Baron says. ?In our particular case, corporate travel is about 90 percent of what we do, plus some hotels. So the salespeople that we hire are going to corporate travel managers and/or travel agencies that specialize in corporate travel and hotel concierges and general managers.?

Most important is that prospective salespeople have some type of sales experience and the willingness to learn a new industry. ?It?s not specific industry experience that?s so important, but sales experience,? says Rich Guberti, owner of Excel Transportation in New Rochelle, N.Y., ?We can train them and teach them about our industry ? we have a comprehensive sales training program.? Guberti currently has three dedicated salespeople and has had salespeople on his company payroll for 20 years.

Give Proper Commissions Typically in sales positions, the compensation package consists of a base salary plus some type of commission structure. At Rely Trans, commissions are set for a year, and then after that year, the commissions are reduced. ?Let?s say they get 5 percent on the account,? Baron says. ?For the first year of that account, they?ll get 5 percent on it. But the second year, that may drop down to maybe 3 percent. Part of that, of course, is because we want to keep them ?hungry? and looking for new business. Otherwise, if they score a couple of big accounts, they can just rest on their laurels and not do anything.? As the commission percentage is reduced on an account, the company?s profit increases.

Commissions can be paid as a certain percentage of the gross dollar amount, or a percentage of the gross profit margin. ?It really depends on how sophisticated your software is that you?re using to track your sales with,? Baron says. ?Most of the time, we just do it on a gross dollar amount to make it simpler.?

Guberti also uses a staggered commission structure for his salespeople. ?When we bring them in, we give them 3 percent of the base rate of the accounts they bring in for the first year,? Guberti says. ?Then the second year, those accounts go down to 2 percent, then the third year, 1 percent. The reason being, it motivates them to get new 3 percent accounts ? brand new accounts ? and they don?t get too comfortable. Say, for example, your salesperson lands IBM and it does $1 million in business. After the second year, you have to reduce his or her commission a little bit so they go and try to get another IBM.?

Create a ?Hit? List A hit list helps you stay focused on what companies you?re currently targeting for new business. It?s an active wish list of businesses that you want to bring in as clients. You may already have an idea of the companies that you want to do business with. And your new salesperson may have some companies in mind that he or she wants to target and go after. Being flexible with your hit list allows for greater opportunities and returns. ?In the past, I was working in operations for a company, but everybody did a little bit of sales, at least in the management team,? Baron says. ?I thought NBC would be a great account, so I just cold-called them, worked on them, and eventually got the whole account.?

If there is an industry that your salesperson thinks might be a challenge, let him or her give it a try. Allowing your salespeople to be more involved with targeting accounts keeps them interested and personally challenged.

?Once the person is fully employed and selling, we basically have 20 companies that we target at any one time,? Baron says. ?That doesn?t mean they?re not going to do more, but we find that between 20 and 30 is all a salesperson can really handle. That number, and the companies that are on that list, change on a weekly basis.? You may run into companies that have absolutely no interest, or you know it?s going to involve a long period of relationship building before they may actually start buying. ?It?s a constant calling, where they?re calling that list and maybe dropping one or adding one or two ? whatever the case may be,? Baron says. ?You can?t say, ?I?m going for this company? and just spend time only on one company.?

Encourage your salesperson to approach a hit list from the standpoint of a long-term basis and creating long-term relationships. With some companies it may take two or three years before they give you a piece of the business. ?I have a major bank that I?ve been dealing with now for about a year,? Baron says. ?I kept talking to the travel manager, and we chatted on a fairly regular basis. Once a month I?d call and say ?hello? and for the first year, we got no work from her. But recently she started giving us some work. It?s a major bank, but it?s a small piece of work, yet we?re very thankful. She?s trying us out, and as we build our success, we hope to, of course, grow the relationship and we?ll see where it goes.?

Maintain Existing Clientele Your existing clientele is also a resource for new business. ?We maintain our existing clientele and try to get them to recommend us to other people in their departments or in their corporation,? Guberti says. ?As far as going out to get new sales, you can?t ignore the fact that your existing clients are really your greatest source of revenue. For example, if you have a client who travels frequently in the New York area, explain to him or her that when they travel to another city, they can use your network and book their pickup in the other city with you also. That?s a way of expanding your sales. We also check our clientele list every three months and see who?s not using us. Anyone who hasn?t used us in the last 90 days ? we send them a $10 ?we miss you? coupon. We have over 4,000 clients and it would be silly for us to ignore them.?

Set Quotas or Targets In any sales situation, it?s essential to have quotas, or targets, to keep your salespeople challenged and motivated, and also make it worth your while. ?It?s not something where you?re going to tell your salespeople, ?just go out and do it,?? says Jim Miller, general manager of A-1 Airport Limousine in Bloomington, Ill. ?They have to produce. And while it?s got to be attractive to the salesperson, it also has to be cost-effective. Don?t just put out money to get business if it?s going to cost you more than you?re going to get. Find where that common ground is, so the salesperson makes money and the company makes money.?

Obviously, you are expecting a certain level of success. But by working with your salesperson and staying actively involved, you will already have a pretty good idea of how they?re doing. ?Sometimes, it?s a question of them working on accounts that are just tougher sales,? Baron says. ?That goes back to constantly calling that list that you?re working on. You do want to have a certain percentage that you?re going to sell and sell fairly quickly to. The longer ones, you have to decide if it?s worth it to invest the time and energy into it. Some are and some aren?t.?

Use Daily or Weekly Reports Call sheets and/or daily and weekly reports are tools to help your salespeople, and you, keep track of the progress they are making, listing the next steps, successes and challenges. It should be extremely user-friendly and easy to read. ?We use call sheets for the top 10 companies that we?re going after,? Guberti says. ?We find out what the salespeople are doing on a weekly basis. We meet once a week to go over target accounts.?

There are also software database programs available, such as ACT and Goldmine. These types of information tracking programs allow an employer to dial in and see exactly what the salesperson has been doing, who they?ve been calling and where they?re at in terms of productivity. It?s a convenient way to keep account notes accessible to all interested parties.

Increase Profitability Miller says A-1 recently decided to hire two salespeople. Since this is a new step for the company, Miller found a sales consultant who will guide the company through ideas of what works and what doesn?t. ?We?ve found someone who?s been in sales for a number of years,? Miller says. ?Once we have the guidelines that we think will both service the customers and give incentive for salespeople to be out there, then we?ll place an ad in the paper. Initially the consultant will work with us in the interviewing process. Then we?ll learn from that and we?ll do the interviewing from that point on.?

When Rely Trans first opened its doors for business in 1999, Baron recalls ... for more on this topic, see the June issue of LCT!

Related Topics: hiring, salesperson

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