Assembling the right sales team has always been crucial. As the old saying goes, “You hire your problems.” But recruitment and selection are now even more important. Data and analytical tasks have lengthened productivity ramp-up times in many sales contexts. Each hire then represents a bigger sunk cost for a longer time. As baby boomers retire and as firms seek to grow, putting more “feet on the street”—or in inside sales positions—increases hiring. Most companies look at their best reps and try to hire more like them. But you’ll never have enough stars and, in fact, don’t want stars in all jobs.
In any business, some activities exhibit high performance variability but have little strategic impact. Think about the design of power point presentations. Some people are much better than others in doing this. But how much impact do the slides have versus other sales tasks? Other activities may be important but exhibit little variability across sales reps—because the tasks are standardized, because the firm has reduced variability via support systems, or because the business model limits the range of performance variance. Think about the difference between fashion boutiques where personalized service and advice are integral to the value proposition versus mass-market retailers where low price and availability make selling less complex and variable.
You want stars in activities that exhibit both high impact and variability. Depending upon your go-to-market model, that may be prospecting or account management, direct sales or managing channel partners, initial sales calls or product demo’s. In activities with low impact and variability, you don’t need stars and shouldn’t overpay, either in money or time. In other words, effective hiring and selection in sales is about building the right portfolio of talent, and this has actionable implications:
Focus on how the salesperson makes a difference. Continually ask, “Where are we spending too much—or too little—time, money and talent across our sales tasks?” For example, the key activities will be affected by your sales structure and account assignments, as well as the necessity (or not) of team selling. Key tasks will change as your markets change. In many subscription-based SaaS businesses, selling activities with high variance and impact early-on are about initial customer acquisition. But over time, key tasks tend to shift toward reducing churn, up-selling, or cross-selling additional services. Allocation of sales talent should change accordingly.
Focus on behaviors in selection. Managers are excessively confident about their ability to evaluate candidates via interviews. Decades of research across job categories indicate about a .25 correlation between interview assessments and job success. In fact, some studies indicate a negative correlation: the firm would have been better-off picking candidates at random! This danger is especially prevalent in sales, where hiring is often affected by a cloning bias: many sales managers hire in their own image because how that manager happened to achieve their performance is what got him or her promoted and in a position to hire.
The best results occur when you supplement interviews with observation of relevant job behaviors. There are many ways to do this, including intern-type positions, simulations, and other techniques. Further, technology is increasing options via game-like activities, virtual video environments, and online media that allow behavioral (not just personality) assessments by more people in less time.
Be clear about what you mean by relevant “experience.” Previous selling experience is the most commonly cited criterion in sales hiring. Driving this view is a belief that there is a trade-off between hiring for experience and the time and money you don’t need to spend on training. But experience at another company—within or outside the same industry—is not easily portable. So much of sales success depends upon a firm’s strategy, the customer segments and sales tasks inherent in that strategy, and the internal relationships that reps develop to get those tasks accomplished. When a salesperson moves to another company, she leaves that behind and must recreate it in a different organizational context.
Further, “experience” in sales is inherently multidimensional. It may refer to experience with any (or any combination of) the following:
- A customer group. For example, a banker or broker hired by a software firm to call on financial-services prospects; or in the health-care industry, companies sell very different products but many sell to hospitals.
- A technology — an engineer or field-service tech hired to sell the equipment.
- A company — in many B2B firms, service rep move to sales because internal coordination is a key sales task and they “know the people and how to get things done here.”
- A geographical market or culture. For instance, someone from that country or ethnic group who knows, and has credibility within, the norms of the customer’s culture.
- Selling — a retail associate with point-of-sale experience or an inside-sales rep who has demonstrated she can successfully work in that kind of transaction-intensive sales context.
The relevance of each type of experience varies with your firm’s sales tasks, not those of a generic selling methodology. In assembling their team, some sales managers “know it when they see it,” and many don’t. So consider what kind(s) of prior experience is truly relevant and then require the people doing the hiring to clarify what they mean when they see it.