Hiring sales professionals is often more art than science. The information below is designed to supplement your current processes, not replace them, and by no means, should this be considered complete. Whether you make and sell new production homes or custom homes, hiring incorrectly is expensive. Here is some guidance on hiring sales people, great revealing questions to ask, and some other guidance.
Assumptions: Great sales people prefer some salary, but only with a high commission; not a mid level salary and low commission. They work weekends (in this industry) if it nets revenue, will talk your ear off, and are motivated by money, incentives, ego stroking, freedom but not micro management. To be successful hiring sales people, you MUST know, in your gut, are you better with them, or without; including revenue, but also the intangible cost of attitude, moral, business operations, management time and energy, etc.
Some of the most common types of sales people:
- People you hired, incorrectly, who, theoretically are going to be gone soon
- Those who sell some amount and you are slightly better off with, than without
- Those rainmakers who do very well, no matter what you throw at them
- Subcontractors (just like your other trades)
WHAT TO DO WITH THE ONE(S) YOU HAVE?
If you know they are not working out, let them go, even if they are your spouse, brother, etc. It is sort of like being sick and dreading vomiting. Once you do, you feel better. Do what you need so you can get over it, move on, feel better, and make more money. You have a business to run.
Keep them, and keep looking. Some (not ALL!) options:
- You provide more management and training on your part
- You actively help them close…basically reducing your own effectiveness
- You give them more leads
- You change the compensation schedule, in some direction
- You do nothing.
If they don’t know they are a rainmaker, and they don’t immediately recognize wanting to be eventually on straight commission, they are probably not rainmakers. They may need a small salary or draw to get them started, because hopefully, they will be making a financial transition (a lot from the former employer and not that much from you). Consider 8% as an average for a fixed percentage of the total sale. Or you can position it on the margin. Either way it is tough. Based on the margin, the sales person does not have control over your production prices. Based on the gross sale, you have less control over the built in profit, but this is still better because you can control and approve the final price to the customer. For some product types, and in some locations, one can also use the PAR (Partnership) system. Say you review it and confirm the base line for the sales person is $100K. They split 50/50 with you, whatever they sell it for over that. Consider they can put it at $120K, splitting $10K with you. If they bring in 12 projects a year, they will make $120K a year, and of course, so will you.
You can use trades (think Value Added Reseller), but it is risky. You must have a Sales Agreement, just like any other trade. There are pros and cons, but be sure to include definitions for commissions, relationships, exit strategy, and several other things. Samples are all over the Internet. As a trade, you have less control over them.
HIRE RIGHT, HIRE SMART, HIRE ONCE – SAMPLE QUESTIONS
Keep in mind our assumptions and comments above. Additionally, keep in mind the ideal person needs to have experience selling tangibles (awnings, cars, etc.), not just intangibles (legal service, consulting). Determine If they can they sell to your market (blue collar, upscale, Jewish, gay, doctors, etc.).
How long does it take to sell a quality lead?
They will [hopefully] ask you what type of lead, in phone or person, etc. Tell them this is an open ended question, with no right or wrong answers, but that you are looking for their perspective and can not provide details. Notice the wording is not “close” a lead. Then: you are looking for a complex, but succinct, answer. 2-4 hours is average. This gives you an idea if they are a closer, or an order taker. If they seem confounded and unable to answer or if they handle it with ease, gives you insight to how they will handle the myriad of unknown things that come their way.
What was your selling ratio per lead?
Hopefully, they will give you some number, such as 2 out of 5. Answers such as 4 out of 5 are likely not honest and 1 out of 10 may be indicative of something else wrong, for example, poor prospecting or qualifying, but that varies based on your product, location, price, etc. However, it is the transition in to the next question that is more critical.
What percentage of your closed sales was meeting with clients from 5pm to 9pm?
If you ask, will you work nights and weekends, they will just say yes. If you ask them an indirect question, you get not only the answer, but an indirect method of whether they will work nights or weekends. They will either handle this with ease, or stammer a bit on it. If they tell you they have sold all remodeling projects only between 8am and 5pm, ask yourself if you believe that.
What percentage of your closed sales was meeting with clients on weekends?
Ditto…but keep in mind, even in this industry, some will not work weekends.
Do you speak any language fluently other than English?
If you are in an area that only uses English…good for you, most Americans are not. Of course, if you work in San Diego, French may not be of much use. However, don’t discount the foreign language variable. People who speak multiple languages, even if you don’t need that language, learn faster, and relate to more diverse cultures more quickly. If a language is an issue, you will need to verify it. Have a four sentence written document in Spanish professionally translated. If you can hand it to them, in English, and they translate it back very well, great, if not, you have just proven something…not just they don’t have the language skills, but perhaps they misrepresent themselves.
What side agreements or current business will you have to resolve before working for us full time?
Notice, we don’t ask if they “have”, but rather, we assume they do, so they either formally tell us they don’t have any, or tell us what is required to make the transition. Very successful sales people will not easily cut a tie immediately, IF, they are still employed, so one should expect some transition.
What is your idea of a good incentive to use with prospecting?
The novice trying to hide as experienced will be hard pressed to immediately come up with something valid. The experienced will be able to. Whether you actually use or choose to use incentives is irrelevant.
What are 6 things you must have when you go on an appointment to meet with the homeowner?
If they can not come up with 6 things…end of interview. Consider the answers, but could include: pen, paper, tape measure, camera, drawings, graph paper, contracts, forms, credit applications, your company portfolio, before and after photos, business cards, letters of reference, calculator, voice recorder, and there are more.
How many “Standard Terms and Conditions” have you reviewed and edited?
The actual number is not that important, although, if they say they have worked at 5 companies and confirm they have edited dozens of STCs, something is wrong. The issue is to find out how detailed oriented they are. If they are not very comfortable with contracts, should you be comfortable with them and your contracts?
What software programs have you used?
If they use no software what so ever, I hope they are near retirement. Ideally, whether one uses Timberline, ACT!, Goldmine, Quickbooks, or just Outlook for emails, the successful person is going to need software skills to work smarter, quicker, and more organized. Match their ability with your need.
How are/were your change orders numbered?
The issue is not the numbering system, but to find out if they used change orders, and to get in a discussion about them. That discussion could go anywhere, but it is bound to help.
Do you know what you score as on a Meyers Briggs personality profile?
You are looking for an ENFP (Extroverted, Intuitive, Feeling, Perceptive). Do not hire an ISTJ, which is the complete opposite (Introverted, Sensing, Thinking, Judgemental). Consider the personality traits of sales people you respond to; do they match that?
Personal note: some of the best most successful sales people I have hired, I absolutely could not stand to be around, but one must concentrate on the priorities.
GREAT STORY QUESTIONS TO GIVE YOU INSIGHT
You are driving to a place you were at many years ago. You are alone. After hours of driving, with no business around, you take the exit. At the bottom of the exit, there is a sign to go right. However, your gut feeling is to go left. You are just absolutely sure you should go left, but the sign clearly reads to go right. WHICH WAY DO YOU GO?
If they go with the sign…they will likely obey orders, and do what they are told. If they go with their gut, they will usually make better sales people.
You are asked to join 3 other people in a room with nothing but 4 chairs, one huge table and thousands and thousands of Lego building blocks. You do so. WHAT DO YOU DO?
Some answers, and why to hire them:
I would wait for a few minutes to see what happens (not a leader, probably a good worker)
I would start building something (not a team player, although maybe a good worker)
I would ask the team what they wanted to build (a good project manager, leader, or salesperson)
I would start a conversation (possible sales person)
I would count the Legos, at least by estimate (needs to go get a job as a CPA)
There are many possible options, but consider them as personality types, not answers.
IF YOU COULD BE ANY LIVING THING, OTHER THAN A HUMAN, WHAT WOULD YOU BE AND WHY?
Once you start thinking about this, it makes perfect sense. Just think of the personality you would want as a sale person. Would you rather have a Tiger, Snake, Elephant, Butterfly…no. A sales person may choose something like:
Dolphin (because they can swim with the sharks, or they are playful and like people, etc.)
Eagle (because they like freedom and like to go where they want)
Whale (they like being the biggest fish in the ocean)
These are all great mentalities for sales people. You would not want to hire anything resembling an introvert or showing timidity, or anything too aggressive. You will be surprised at the answers you get, and the analysis is fun to do, but subjective at best.
QUESTIONS FOR YOU
Do I have the time to adequately train a novice?
Do I have the time to train another person if this one doesn’t work out?
Is it better to spend $ to get someone who hits the ground running? (usually yes, do the math)
If they don’t know a dollar amount for cabinets, do you have time to train them on that, and the hundreds to thousands of other items?
Hiring sales people successfully is not only about the money you will make from their sales, it is about the money you won’t lose, when you hire right!
Erik Cofield, VP of Sales is with TopBuilder Solutions which provides a construction industry specific CRM system with lead management, marketing automation, branded email marketing and a branded industry newsletter all in one easy to use web based software system with no contracts, training or termination fees, and with features no other CRM on the market has. He can be reached at email@example.com.
Reposted via TopBuilder Solutions.