New sales hires look great on paper. Their resumes are packed with successes and they are a delight to interview. You expect your sales to explode after hiring them.
Our clients tell us the reality is very different.
“How is it we hired 5 salespeople over the last two years and our revenues have remained flat?” More critically– “our SG&A costs have risen but our operating profit has not.”
Many flooring dealers struggle with scaling their business. Scaling, simply put, is the ability to grow your revenues faster than you grow your costs.
So what's the deal with new salespeople? Yes, we know it takes time to build a book of business but really? C'mon.
Here's the brutal truth.
Most of your business comes from existing customers.
Salespeople are canny. They figure out the quickest and easiest way to make sales commissions and become an established asset. They come on board, do their research and identify one or two accounts that exist in your current portfolio and go after them.
The trouble is all you have done is spread the available relationships and business over a larger group of salespeople. So no new net business to affray your new net salesperson costs. You are cannibalizing your existing accounts.
What you need are carnivores, not cannibals.
Carnivores are hunters. They seek new prey.
Here's the second brutal truth.
Our commercial flooring benchmarking shows that salespeople only spend 6% of their time hunting for new business. Dropping a carnivorous beast into a tribe of cannibals soon has the carnivore learning new behaviors. The wrong ones.
Most owners operate under the misguided assumption that because salespeople are paid on commission they don't need to be managed. Wrong.
Getting the best out of your carnivores requires the following:
- you need to describe the prey you want them to hunt.
- you need to flush out the prey from their hiding places into the olfactory range of your hunters
- you need to keep them in the field, not the office.
Let's take the first point. The business owner sets strategy, defines the type of customer required and spells out the products and services that can be offered and the margins that are necessary. The salesperson executes the strategy. However, we often see the tail wagging the dog. i.e. the sales carnivores go and hunt whatever they like and expect you, the owner, should be grateful. Your strategy is then a result of their inclinations and not your design.
Sit them down and build a written sales plan together. You want antelopes and gazelles, not lions and tigers, or even elephants. (The occasional elephant is good but the sales hunting cycle is long, the project delivery cycle longer and the cash collection cycle an eternity).
Secondly, hiring, paying and retaining salespeople is expensive. There is no point going to all that expense if you are not prepared to invest in generating leads for them to chase. The alternative is they will cannibalize your existing accounts and sales prospecting will wallow at the measly 6% level.
Most organizations focus their efforts on the “hello to close process”. That is where the salesperson has a conversation with a new prospect–the “hello” part, and then nurtures the relationship to the “close” part. You remember the Jerry McGuire movie where she says “you had me at hello”.
The problem is most salespeople are not very good at getting to “hello”.
A recent study by Vengreso found 59% of salespeople said the hardest part of the sales cycle was getting the first conversation or the hello.
Hence why we see so many of them going to the bid board, they don't need to think about it, it's easy. Unfortunately this is the most competitive space, generates the lowest margins, requires lots of bidding and contributes to the low prospecting time. (Our benchmark study found salespeople spend half their time consumed with data entry, emails, and estimating activities)
Best practice is to have a research analyst who creates target lists in line with the company strategy. A business developer or coordinator then generates campaigns and emails to this list. A warm list is then fed to the salesperson.
It is akin to putting the scent of blood in front of the carnivore. Now they are in kill mode! So think about having a business development resource to ensure you get the most out of your expensive hunters.
Thirdly, carnivores need to be out of the office. Take their desk away. Failing that take their chair away. They'll soon get fed up of standing!
And no, they can't sit at home all day pretending they are on Zoom calls or preparing bids.
They need to be on job walks, having coffee with prospects, lunch with vendors, and soirees with associations. Good idea to have some field support for them so they don't get bogged down with admin and minutiae and are totally focused on selling.
Think about it this way, it is easier to double their selling activity from 6% to 12% of their week rather than doubling their conversion rate.
In summary, don't let your carnivores turn into cannibals. Focus them on new targets. You will need to feed them some leads and give them some admin support for them to be truly effective. If you can't do that, don't hire them.
Who's the top sales hunter in your organization? What could they sell if they had twice as much prospecting activity and double the deal flow?
Get someone to give them a scent (assign a list builder/lead generator), and kick em out of the office. Let them hunt.