This week we are once again going through the ritual of graduating a group of highly motivated sales professionals from our Career Sales Development Program. That means our clients are busy interviewing which is an exciting process but also a frustrating time for me because I am forced to watch otherwise good companies make the mistakes we see over and over again. I wish they would take our advice but such is life.
The problem is simple. Clients hire for what is arguably the most challenging and stressful position. Not surprisingly, inside sales has an incredibly high turnover rate – typically 100% within twelve months. While this may seem high, our clients report that this number is double or more prior to working with Three Value Logic. Certainly attrition can be attributed to individual failure. However, and from our perspective, the more frustrating dynamic is attrition caused by an individual’s success.
For those of you wondering how success would cause someone to leave the answer is a simple word – money. It is surprising to think that someone waiting tables one day can land a job that will earn them $47,000 on average their first year after completing our program. But what is truly shocking is that if they are talented, they will have an offer for at least 50% more within their first nine months. What is a business owner (or Sales Vice President) to do?
The solution is as simple as it is unsettling: you need to engineer your sales organization as if everyone has a life expectancy of six-months. You heard that correctly. You need to build an environment that enables your business to thrive even as your sales resources expire at an alarming rate. I am dead serious (pun intended.) Think about it – if your sales people were actually dying and there was nothing you could do to prevent it; you wouldn’t waste time bemoaning your fate but would put a plan in place to do business within the realities of your environment.
By all empirical data, intense competition for resources – particularly sales resources - is a reality of our world going forward.
So if you are interested in how to deal with this reality, here are five rules for hiring in a world where your salespeople drop dead every six months.
- Hire Fast – If you are not hiring forever then stop seeking perfection. Hire for the job they can perform over the next six months. A two-week hiring process may represent 10% of your total relationship.
- Get new hires up to speed quickly – Think about resource value progressively - What can a new hire do on their first day that contributes value? In a world where life expectancy is short, three months to ramp is unacceptable. MTTFC (Mean Time To First Call) had better be measured in hours not days or months.
- Maximize their value while they are alive – If you know someone is going to die, it doesn’t make sense spending your time bemoaning fate. Instead, ensure you will get every ounce of productivity while they are alive.
- Fire faster – We refer to the time between ‘I think there is a problem’ and ‘There is a problem’ as the ‘Acknowledge to Action Gap.’ How long does it take you to get rid of a poor performer? For us the answer is usually three days. As a general rule, when the productivity curve drops: don’t agonize…euthanize.
- A.B.R. – Always be recruiting – This one is easy: stop treating attrition as a surprise. In a tight labor market, you must have a plan for immediate resource replacement. Every day a sales position goes unfilled is lost opportunity.
Monday, April 30, 2007
Tuesday, April 24, 2007
Finding a good sales guy is like getting in a fight...
I had a great conversation with a friend and business colleague today. He is an absolute ace when it comes to raising money and I was picking his brain about how to best approach outside investors. Not surprisingly, we also happened on the subject of sales – about which I am the ace and he is the proverbial babe in the woods.
As with many prospective clients (and anyone who will listen) I was trying to dispel some of the many beliefs and assumptions that business owners hold to be true about what makes a great salesperson. I was doing this in the hopes of helping him avoid some of the painful mistakes we see made with respect to hiring sales talent.
Most people believe that industry knowledge, relationships, charisma, and that most nefarious of red herring – experience – are what makes a sales resource successful.
You may be asking yourself - ‘did he just say that experience, industry knowledge, and relationships don’t matter?’
Look for more on this (admittedly inflammatory) line of thought later – the purpose of this entry is not to give all the answers but simply relate the analogy offered up by my friend.
The crux of my position was the notion that it is easy to be misled by factors that would seem to predict success for a sales resource. Stated simply…looks can be deceiving.
Michael’s response was infinitely more insightful: ‘you mean like getting in a fight?’
Those of you familiar with the Ultimate Fighting championship (UFC) may grasp the profundity of Michael's statement. The UFC was started in 1993 as an attempt to find and showcase the world’s best fighters.
Practitioners of various martial arts (Karate, Thai-Boxing, etc) and traditional fighting styles (boxing) were matched up – often with great differences between their size and weight.
This was a big deal because up to that point in time, it was a commonly held belief that the predominant factor in the success of a fighter was size. So when 170-pound Royce (pronounced ‘Hoice’) Gracie submitted the 275-pound wrestler Dan Severn it was unprecedented. What most fans didn’t know was that Royce Gracie practiced Brazilian Jiu-Jitsu, which was created by a couple of 120-pound brothers (also Gracies) who had adapted traditional Japanese Jiu-Jitsu because many of the moves required strength they didn’t have. Fundamentally, Brazilian Jiu-Jitsu was founded on the principle that a smaller and weaker person using leverage and proper technique can successfully defend themselves against bigger, stronger assailants.
What my friend Michael stated so eloquently was the fact that technique – which is most often not visible to the naked eye – can easily trump that which is valued simply because we can see it at first glance.
As with many prospective clients (and anyone who will listen) I was trying to dispel some of the many beliefs and assumptions that business owners hold to be true about what makes a great salesperson. I was doing this in the hopes of helping him avoid some of the painful mistakes we see made with respect to hiring sales talent.
Most people believe that industry knowledge, relationships, charisma, and that most nefarious of red herring – experience – are what makes a sales resource successful.
You may be asking yourself - ‘did he just say that experience, industry knowledge, and relationships don’t matter?’
Look for more on this (admittedly inflammatory) line of thought later – the purpose of this entry is not to give all the answers but simply relate the analogy offered up by my friend.
The crux of my position was the notion that it is easy to be misled by factors that would seem to predict success for a sales resource. Stated simply…looks can be deceiving.
Michael’s response was infinitely more insightful: ‘you mean like getting in a fight?’
Those of you familiar with the Ultimate Fighting championship (UFC) may grasp the profundity of Michael's statement. The UFC was started in 1993 as an attempt to find and showcase the world’s best fighters.
Practitioners of various martial arts (Karate, Thai-Boxing, etc) and traditional fighting styles (boxing) were matched up – often with great differences between their size and weight.
This was a big deal because up to that point in time, it was a commonly held belief that the predominant factor in the success of a fighter was size. So when 170-pound Royce (pronounced ‘Hoice’) Gracie submitted the 275-pound wrestler Dan Severn it was unprecedented. What most fans didn’t know was that Royce Gracie practiced Brazilian Jiu-Jitsu, which was created by a couple of 120-pound brothers (also Gracies) who had adapted traditional Japanese Jiu-Jitsu because many of the moves required strength they didn’t have. Fundamentally, Brazilian Jiu-Jitsu was founded on the principle that a smaller and weaker person using leverage and proper technique can successfully defend themselves against bigger, stronger assailants.
What my friend Michael stated so eloquently was the fact that technique – which is most often not visible to the naked eye – can easily trump that which is valued simply because we can see it at first glance.
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