This is a real case study. It has important lessons to avoid what MOST companies are doing wrong.
We first came into contact in 2010. The company was profitable but only just. There were 25 staff, 12 of them in sales (telesales). The founders employed a Sales Manager to manage the 12 sales staff.
They paid £18,000+ Commission to new staff which went up on a scale to £32,000 basic. The highest earner took home £78,000
They were recruiting on average 4 people per month to replace leavers.
Of every new person only 1 in 4 made it to quarter 2.
1 and 2 above meant they were just maintaining sales team size.
The losses on those that dropped out for recruitment fees, basic salaries, training, office space, came to over £12,000 per person. Therefore, there was a £36,000 hidden cost in securing each successful sales person. The constant dropouts negatively impacted the core sales team.
The company had a professional sales trainer and motivator brought in to complement the Sales Manager.
Like most Sales Managers when he was away the sales calls and productivity went down.
The company had good but not great products. Similar were offered by competitors.
We told them they were not ready to recruit and told them why. This surprised them, they expected a sales pitch! We did not want them to pour water into a leaky bucket.
BIG MISTAKE 1: They did not identify the right sort of people and were recruiting the wrong people.
BIG MISTAKE 2: They recruited primarily for sales skills and motivation.
BIG MISTAKE 3: They relied on sales training and motivation techniques to develop staff.
BIG MISTAKE 4: They paid put money to new people without results.
BIG MISTAKE 5: Their current sales people lacked tangible support in selling.
There were several smaller issues.
We pointed out some of the 12 GOLDEN RULES of how the top 10% of fast growing companies recruit the top 10% of sales people.
GODLEN RULE 1: Recruit to match your company culture, style and values first.
GOLDEN RULE 2: Set up automated processes to train new people.
GOLDEN RULE 3: Put in place a Low Start Remuneration package for the first three months.
GOLDEN RULE 4: Make selling your product easy and structured.
GOLDEN RULE 5: Mass process interviewing and selection processes and never rely on CVs and interviews for decisions. Don’t take individual calls or visits. To time expensive.
CHANGES NEEDED AND IMPLEMENTED: 1. More developed online brand presence.
The company needed to do more online to promote its products. After first contact prospects typically Googled the company and products. They needed to control this by having blogs, videos, podcasts, testimonials of other buyers, links to press articles, interviews, etc.
Design a sales and support system process.
They needed to identify and record all the sales pitches, responses to objections, closes and write them down for what had worked. From this a Sales Manual was produced both online and a printed out copy on each desk and desktop.
To help with this we recorded and analysed calls. In the process we included an automated newsletter series. (The product was of the nature where often the timing was not right.) This meant that nobody had to record their details on a CRM the prospect now did it (By the promise of a free valuable gift and e-book in this case). That automated prospect follow up. It also captured leads of sales people that left.
This meant the sales team could stop cold calling and move more to warm calling and even hot incoming calls. This increased the revenue per sales person by 56%
3.Recruitment Profiles We identified the core values/beliefs/style of the company and team. When people identify with each other they act as a team and there is cohesion/loyalty/synergy and higher results created. We all want the top 10% of staff whatever the job. Only 10 in a hundred companies achieve it.
When you know your culture fit type you can recruit for it. It is by far the best way to recruit. Why. Because you and only you know your values. So, on their tests that we designed candidates could not answer with bull*** (i.e. what they thought was the right answer).
We added to this to establish what someone’s real goals, motivation and ambitions are. I say REAL as it is rarely what they say they are. CVs and 121 interviews have proven to be very limited in assessing this.
We changed it to:
The first three months was a boot camp induction period.
The package has five elements.
Fixed Basic (Set at Minimum wage).
Variable Basic (Set by number of calls/appointments/visits made in month).
Performance Bonuses, Prizes, Trips, Incentives.
Training (Mostly automated).
After 3 months the Fixed and Variable basic will be replaced by £18,000 £20,000 £22,000 and reviewed again in three months.
This had several benefits.
Number of dropouts reduced. People who intend to be average, just do enough not to be fired will be seriously put off by this package. That is good. Conversely the hard determined and ambitious were very motivated by it. After all they can control their own basic as it is so near ahead of them, very reachable.
Costs of dropout were greatly reduced. As they usually went before the end of the month the Fixed Basic was the only payment.
Cost and rate of dropouts became much lower. More stability in team for further recruitment and growth.
Sales people are mostly motivated by status and recognition. Basic and commission are always second. None of them will say this but their behaviour proves it is true.
So, on starting they are
After hitting performance targets (3 months) Sales Executive
After 6 Months and some performance levels hit Senior Sales Person.
6.Training They made training limited in the first month and in groups and added status to it. For example, Trainee training is in the office. Sales people do it on an afternoon in a local hotel. Senior Sales People go to Marbella each quarter for a weekend. Morning for training and then relaxing. The photos of the latter are now around the office. This is all about status.
They also automated a lot of their routine training by opening a coded entry portal for sales staff with a library full of videos, audios, podcasts, blogs and a half hour a day for the first month induction programme to be watched by each new person. There was even an online test included. So now little senior time lost. The recorded their knowledge once and put it on the website.
7.Recruitment Live Now they were ready.We recruited for them in groups. We Invited twenty people at the same time, same day. Ten showed up on average. Let them compete to see how they are with strangers and selling. We rejected until they had the four best.
This method saved them a lot of time and money. We now repeat this process for them regularly.