How to hire a sales rep
Fleet owners often ask if I know of any sales reps with a big book of business who are looking for a new home. I tell them all the same thing: they don’t exist. They all became freight brokers. Ironically, the experienced sales reps I recruited away from competitors rarely delivered what they promised.
You can’t afford to swing and miss when you hire a sales rep. They’re expensive: the total cost can easily balloon to six figures including expenses and travel. If your margin is 10%, a new $100K rep has to bring in a million bucks of business during year-one to be in the black.
Every company needs good reps who can pound the pavement, fill the sales funnel and secure long-term customers. Whether you’re hiring for the first time or taking a hard look at your existing reps, here are a few lessons I’ve learned over the years about building a sales team.
Start with integrity
Warren Buffet has a theory about interviewing sales reps. Some applicants, he says, will “embellish their qualifications, fabricate stories and flat-out lie.” You just have to figure out a way to catch them.
No one wants to go through interviews with their BS meter at 11.
So consider people you already know. Current employees understand the inner workings of your company, and you know their character and competencies. Promote your sales jobs internally before you open them up to the world. You never know who’s looking for a new opportunity.
Managing sales reps is about the numbers. Most companies have some form of quota system based on top-line revenue, which is especially important for calculating commission.
But to me a rep’s input to the sales funnel is just as crucial as sales output. If you don’t add prospects at the front end, it’s impossible to pump out customers at the back end. It’s essential to incentivize reps to keep filling the funnel. Like Wayne Gretzky said: “You miss 100% of the shots you don’t take.”
To calculate compensation, I prefer a sliding-scale formula of salary and commission. Starting out, reps get full salary and commission. Over the first two years, the salary falls monthly until it hits zero. For a rep making $65K a year in salary, that’s a reduction of $2,708 per month.
The commission should be based on top-line sales since it’s the one thing a rep can control. It’s also simple to calculate, unlike profit and margin for each customer.
But I disagree with the practice of reducing sales commissions on customers over time. Long-term customers are great opportunities for increased business. Plus, it costs more to support brand-new customers. That’s why I think commission should marginally increase every year the rep keeps an account.
Have their backs
The hiring process is an evaluation that goes both ways. Be ready to respond when top candidates ask you about technology and other tools you use to support your sales team. CRMs, Google Ads and other forms of digital marketing are today’s version of cold calling, hockey games and liquid lunches. By the way, how’s the website looking these days?
If you’re hiring a sales rep for the first time, there’s a good chance you don’t have the resources for internal training. You might want to consider outsourcing it like we do at my company. The resources online are unbelievably plentiful and cheap if you want to do it internally.
Buffet also said that, along with integrity, he also looks for intelligence and initiative in a candidate. If you hire someone without integrity you’d better hope they’re also dumb and lazy because a smart, cunning rep with no scruples will crush your business. Consider yourself warned!
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Great information as always. Thanks Mike.