If you’re like 90%+ of the firms in our industry, your business development efforts are led by seller-doers… business owners, leaders and managers who, in addition to their primary job, have the added responsibility of growing revenue for their firm.
But if that’s not working out for you and you want (or need) to more proactively grow revenue, you might be considering bringing on a full-time sales rep… someone who’s only job is to grow revenue. If that describes you, this series of articles on how to best do that can help.
In this 3-part series, we’ll cover:
- Preparing to bring on your first sales rep
- Hiring and training your first sales rep
- Managing and supporting your first sales rep
Part 1: Preparing to bring on your first sales rep
Bringing a new accountant into your firm, for example, is relatively easy… you understand what they do, you know where they’ll fit in the firm’s org chart, everyone else on the staff “gets” what accountants do and so on. But because most firms have never had a true sales rep in-house, there are a ton of unknowns. So, before you go about hiring one, think through the following first:
Bringing your first sales rep into an operations-driven organization can be very difficult. Think about the rest of your team – your research staff, project managers and team leads. Do they understand why you’re doing it? If things have been going pretty well, why rock the boat? And since the ops team is doing all the work, why should the sales rep get the commission? And a bunch of other questions.
Before you get too far into this, make sure you’re spending a lot time simply talking about the sales function. And what it can do for the company and how each person on the ops team will benefit. And yes, actually use the words “sales” and “selling.” You may never be able to create a ‘sales culture,’ but you want to, at least, give everyone the chance to get comfortable with the concept and be prepared for the new sales rep coming on board.
Providing Structure for the Role
A mistake that many small-to-mid-sized business owners make when they hire their first sales rep is to get them on board and then say, “OK, now go sell something.” That never works. Never!
To help your new sales rep get off to a good start, they’ll need some structure, boundaries and guidelines. Here are a few things to consider:
Who they sell to
And “anyone they can” is not the right strategy. Do you want your first sales rep to be a hunter (going after only brand-new clients) or a farmer (maintaining and growing existing clients)? Or some of both?
How do they work with or hand off clients to your Ops team?
Do you want them involved with your Key Accounts? Do you want them taking any inquiries that comes in?
Do you want them focused on one market (e.g., CPG) so they develop some expertise or do you want them to be more of a generalist?
Do you want them working only on the phone/Zoom™… or spending most of their time ‘in the field,’ meeting with buyers in person?
There’s a lot to think about.
Your Org Chart
Because this will be a new role in your firm, finding the right place in the org chart for this new sales rep can get a little tricky. Will they report to you (which can be a real challenge if you have no experience on how to manage the selling function)? Is there a marketing function in your firm… how will this sales role work with them? If they will have some ‘ownership’ of client relationships, how will that jibe with your operations team?
The one topic that befuddles the majority of first-time sales managers (which is what you’ll become once you hire your first sales rep) is ‘compensation.’ Should it be salary only, commission-only or a base + commission (the most common)? Are they paid from dollar one or only after hitting some threshold? Does the commission percentage increase as they do better or stay level? Is the payout capped or not? How often is it paid? Is it based on sales or collections? Revenue or profit? And, of course, what’s the right commission percentage? While whole books have been written about this topic, to start, follow these few guidelines:
- Comp plans are not just a reward, they are meant to drive the behavior you want your sales rep exhibiting. So, what behavior do you want from them?
- The plan should be very easy for the sales rep to understand and even easier for you to administer. Remember KISS (keep it simple, stupid!)
- Lean toward being generous rather than frugal. A couple of hundred (or even thousand) extra dollars is a small price to pay for an excited, motivated rep who brings new projects in the door.
How does compensation tie to sales goals? How are sales goals best set?
Bringing on your first sales rep will not be an easy process. But it will go a lot smoother and they’ll get off to a much better start if you take care of some of the behind-the-scenes elements first.
In next week’s post, we’ll discuss hiring and training your first sales rep.