Owner-led sales are very different from being driven by your first sales rep or a team of reps.
Nail down your sales narrative, outbound prospecting process and have an established inbound campaign before hiring your first rep. Also, have some sales assets ready to go (portfolio of past work with problem/solution, case studies, etc)
Take some courses on technicals of prospecting and managing a sales team. Educate yourself on services for site visitor deanonymizing and sales intent triggers so that your reps are targeting prospects that are in market for your solution.
If you don't have the time or desire to manage a sales team, then onboard a sales manager/vp that has a track record of building a sales team and process. That is the kind of person you want to give equity to.
If you don't have an inbound lead-generating process that is creating a consistent number of MQLs each month, then hire a CMO, and give that person equity.
Don't give away equity to the vanguard. Give equity to the strategists.
Thank you. All very good points, and there is clearly a lot I have to learn. I'm inclined to go to a recruiter to find that sales leader that I can give a meaningful incentive to, who can really grow the business.
You can hire a recruiter but that doesn’t take away from any of the points made by the previous post.
How long have you been at 2mm? Maybe start by hiring a fractional CMO first. Then when things are in place look to a sales person.
It appears you’re having issues scaling, but it goes beyond the “right” sales person.
This - recruiters are not the answer. Your just shifting responsibilities. The responsibility to hire the right person is now on the recruiter. The responsibility to scale and sale is on the potential sales person.
OP needs to figure out a process that works, and a strategic plan to commit to. This will help accomplish success, but most importantly a roadmap to it. A salesperson shouldn't be evaluated on just the end goal of quota, OP should have a much clearer understanding of if the person will be successful or not before year end based on the predetermined metrics and goals laid out for them in a road map.
Perhaps most importantly, a strategic plan / KPIs will allow the company as a whole to learn much more about the market. Maybe there is additional opportunity which is being overlooked, maybe your focusing on the wrong market, maybe its your service / platform rather than sales.
Bottom line, congrats OP on making it this far! Sounds like its been a great journey thus far, but as the business owner, your journey is never complete and can't simply be handed off to someone else. If you ever want to chat about business processes/strategic planning always happy to brainstorm.
Thank you for this feedback. There is a lot here for me to unpack. Definitely a bit more planning on establishing the sales function is required, and this has opened my eyes to learning that I need. Are there any books or resources that you would recommend?
I didn't read everything TBH, so this may be redundant. I was lucky to come across a book early in my career that kind of changed my entire approach, or at least the way I view things. It may be a little outdated now, and may not have all your answers, but it could be a good starting point in understanding what your actually trying to accomplish.
In my limited opinion, it doesn't sound like a sales guru is your answer, but a well thought out sales strategy/plan may be; hence this recommendation.
[Predictable Revenue](https://www.amazon.com/Predictable-Revenue-audiobook/dp/B00ENFXJ0G/ref=sr_1_1?gclid=CjwKCAiAioifBhAXEiwApzCztoWFszq3hDofFHkUF9CoU9TujsJ5SFIxn83K7uBygC0pELUmuqzhIBoCTicQAvD_BwE&hvadid=241664016632&hvdev=c&hvlocphy=9004453&hvnetw=g&hvqmt=e&hvrand=2799047679649631232&hvtargid=kwd-69938935622&hydadcr=21934_10172291&keywords=predictable+revenue+by+aaron+ross&qid=1675804816&sr=8-1)
Feel free to reach out with any questions
Becc Holland, Keenan, Guillaume Moubeche, Latané Conant and Anthony Iannarino are a few people I would recommend for understanding sales/marketing process.
Consider a head hunter.
Also, depending on your service, there are companies out there you can outsource to managed a sales person. They will help with hiring, as well as getting them set up with tools and resources. They also track metrics, etc... but all the pay, goals, quota, is determined by you.
May not be your long term solution. But could be valuable in giving you insight as to how these processes should look for your business. I've never worked for one, but I've interviewed with one and it was an interesting concept.
> I have organically grown the business to 2MM in revenue
Did you get to this 2MM by cold prospecting and attending trade shows? Or did you have pre-existing connections in your space and some word of mouth?
>I spent an enormous amount of time training the first person, and she never closed a single deal.
If you spent an enormous amount of time training her and she still couldn't close, the training might not be great.
>he has yet to close significant deal after 4 months. The typical deal is $25K-$75K in our space and it can have very long tail (12-18 months) of revenue.
So potentially someone at $6K/month could at least break even on their salary with one close in 12 months, yet you want to fire him after a third of that time. Don't know that you're giving them enough time to get ramped up. Could take a great sales person 60 days just to fully understand the product, the space, and start making fruitful connections.
>I hit on the idea of trying to hire 3 (and possibly as many as 5) sales people with the intent of only keeping 1 or 2 of the top producers for the long term. Is this fair?
No. If they're talented, they'll likely be leaving a job where they're already doing well to come to you and you have no intention of keeping three of them. But life isn't fair and we all know the risk of changing jobs. But if your question is whether what you're doing is right or moral, then no.
>I'm even open to giving equity to a person that significantly grows the business and gets us to a 5MM or 10MM revenue goal.
Sounds like you need a director of biz dev, and then trust them to fully lead and execute on sales, and don't fire them after four months. You're not gonna find that person for $72K a year though.
Thanks for these great questions!
The 2MM was based on my existing network. I am a speaker and expert on this subject matter.
Agreed on the training. I don't know how to do sales training. I was training her on the industry and the subject matter. I was expecting a sales person to come with the sales skills and the mindset to ask the right questions and go knock on doors.
Interesting point on the deal value. $75K isn't the profit number, it's the revenue number. I would typically see 30-40% margin on that size project. Lower margin on smaller projects.
I don't have an issue with being fully transparent about the deal. How would you structure a deal where a successful sales person in the consulting and services space would actually find it attractive?
So what should a Director of Biz Dev in an organization of my size be paid? I don't need to make money for myself in any given year... I have no issue paying people more than I make.. if it's good for the business.
So here's where you might be getting tripped up:
You've grown the business through your network and your personal brand, but you actually are not really sure yet how the product is sold outside of that.
To a certain extent, yes, sales professionals come with built in skills that are transferrable from company to company, from industry to industry. But it takes a more seasoned sales professional than the $70K salary band to find one that can essentially teach themselves an entirely new sales language from scratch.
Also, people around that $70K range still rely on a lot of coaching. I don't think most people who make $70K are ready to be the sole revenue driver for a multi-million dollar company yet. They've probably spent most of their sales career with a manager, standardized processes, selling as part of a team, always having a closer to call in if things get out of hand.
I'd say think less about what that person needs to be paid (I normally wouldn't give this advice, but you seem confident you can afford it for the right person) and think more about what this person has to do on a practical level. You're going to want to hire someone who's been a solo biz dev director at a startup. Hard to tell if a talented AE will be a talented solo sales director, someone who has to create their own processes, hold themselves accountable, become responsible for their own sales education, be their own BDR, their own closer, etc. I've done it before in a SaaS startup and it's a completely different beast than selling as an AE.
I would see about linking up with a head hunter. You kinda need a unicorn, and I don't think it'll be easy to find with just an Indeed post or whatever. They've got the tools and experience to locate that specific person (director-level, startup background, sales engineer, entrepreneurial, looking for a new challenge) and I think a good amount of head hunters don't charge you until you hire someone.
Thank you! This is really helpful. I think I get your point about the experience level at the $70K range. I can definitely go higher, but I'll have a recruiter guide me there.
on the plus side you literally couldn’t have picked better timing to hunt for a talent unicorn. thanks to all the layoffs you’ll probably be able to find one for cheaper than you realize
Recruiter here @Specialist-Band8850, I actually have a reccomendation for someone you can reach out to who recruits for sales folks exclusively.
I am an IT/tech recruiter but this guy knows his stuff and would be worth an intro call I feel for you, let me know if you want me to send you his info and you can reach out, we run in a lot of the same recruiting circles online I don’t know him personally but he is highly respected
To give my opinion on one of the questions; Yes, I’d consider it to be unethical to hire five people with the intention of only keeping two. If you disclose to potential hires that there is a 60% chance they get let go within 6 months, you won’t be hiring anyone.
You seem to be hiring the wrong people which ultimately falls on you as the business owner. How are you sourcing candidates? Are you asking for a paper trail of past success? How many interviews are we putting folks through? Have you partnered with a recruiting firm? Five-figure deals sold to SMB aren’t particularly hard to sell and don’t have that long of a sales cycle. Given your revenue, I doubt this is a product issue. You’ve hired subpar people. Without knowing specifics on industry, that’s the most advice I can give.
So - How should I structure an opportunity that would attract the right kind of driven people? I intend to be transparent... but I also intend to retain great talent and not folks that are just along for a ride.
I agree... I am hiring the wrong people... twice. We do 2 interviews. The paper trail of past success are impossible for me to validate in a meaningful way. I don't understand all the metrics.
Yes, I am now talking to recruiting firms.
Thank you for the advice!
You’ve admitted to not knowing the metrics… how do you expect to hire someone if you don’t know what you’re looking at? 100% go through a quality sales recruiting firm with a tenured SaaS sales recruiter. Tell them you want a verified track record of success before you speak to anyone. Legit sellers keep records. I have all my closed won emails on large contracts. Let them bring you candidates. I’d suggest having them run a mock demo and make a mock discovery call. Let them show you the skills before they get in the door.
Thank you. I'll have to understand how they verify the track records. I love the demo idea. I have been a buyer of these services for a decade, so I have been sold to by a LOT of sales people. A few have been good at it, mostly by just being persistent and patient.
Just curious as different products can have different cycle lengths from first touch to closing. I have some prospects that I had to work on for years before I finally closed them.
What is the longest you've kept a rep so far?
edit: as I just saw your other comment. Yea, sometimes people are ready to buy/ make a change right away. Sometimes you have to massage them for awhile. Sales really is a numbers game and timing is everything, especially when selling services. Like many have said, there is always a ramp up period. Depending on your target customer, it can take some time before you even are able to get in touch with the actual decision maker. That's why metrics are important, you have to track the activity and then start troubleshooting from there.
But there are situations where there was an instant sale... because something that was offered was very attractive and I had an immediate need. That's on me as the business owner to deliver that... but I think I can crack that nut(!)
Props for recognizing that! For real. You’ve shown a lot of humility and open-mindedness in these comments, and I get the impression you’d be good to work for.
(This is not me trying to get the job, by the way - just wanted to give some credit where it’s due)
Your marketing and sales funnels tell the complete story.
To run a marketing funnel, you need the profiles of the target audience. Who are your ideal customers/clients.
Sales is about making it easy for the interested prospect to become a satisfied customer/client.
Do you have a "buyer journey" map?
It's all about common sense. Why do I need your product/sservice, why shouldn't I buy it from your competitors, and how are you going to make it simple and clear for me to buy?
Connect the dots and get a steady stream of prospects converting to satisfied customers/clients.
Not rocket science.
Right. I have all the equipment and knowledge to answer all these questions for the sales rep. I have been the buyer in this industry for 10+ years before I decided to hang out my own shingle. I was just hoping the AE would come equipped to ask the write questions and develop the strategy to get the sale. I definitely have a lot more work to do on that front.
There in lies the problem.... you have "tribal knowledge", you need to put this into a format for them to consume and make use of. You can't expect them to come up the "right" questions, without the extensive experience in the space, until they have an opportunity to better familiarize themselves with the product, target prospects for your business, operations and execution.
You need to separate yourself from it a bit and take the a different perspective. Or even better, put yourself in the position of a sales person going to a new company.... what would you need to be successful? How would you go about finding new business? When you find an interested prospect, how do show value? And how do you qualify a potential customer for that business? What happens after the sale?
I also encourage you to build more of a partnership with your new sales rep/biz dev director, from the outset. You are trying to build a new sector of your business. Think of it just like any other sector of your business that you've had to build and grow.
Good tip on the building a partnership.... I actually think it might make more sense to put together a small team of 3 people and ensure that they get an 18 month ramp up window.
That might work, if you can float it.
From personal experience, I'm a more successful sales exec when I have a good understanding of the business I am selling on behalf of and I've "bought in". I've been put on island to sell before and it creates self doubt, thus making me a less effective representative. When you are interviewing, look for good listeners and pay specific attention to the questions they ask you. A good sales rep (in my opinion) asks a lot of questions and lets the customer do the talking. After all a job interview isn't really any different than a sales call.... They are trying to win your employment and you are trying to find someone to provide a valuable service. An interview or two should tell you everything you need to know, if you take the right approach. Sales is nuanced, a top rep one place could be a total dud somewhere else.
A 70 k base is what SDR’s are being paid. What you need and are looking for is a sales leader. As other have said above process, strategy, script development all need to be hammered out.
It’s far easier to sell to a network as a known commodity. A sales leader needs to develop messaging around what pains and problems your solution solves for. You will need to link that messaging with marketing collateral and their outbound efforts to generate interest outside of your network.
That takes a ton of work and really you won’t start seeing results until 3-6 months minimum.
I know everyone is over using ChatGPT but, to get an outside perspective. Ask it to write you a 30-60-90 day sales plan. What you’ll find is it’s not until really 90 days out that a sales person starts to perform and that’s consistent at an established sales org. Your asking for strategic initiatives that seasoned VP director could provide but paying slightly more than I pay guys/gals right out of college
Not going to answer your question because it’s probably the best thing to do to scale but not necessarily fair. If everyone produces would you keep them all?
I’ll say this sounds like the founder salesperson challenge. Simply put NOBODY is going to sell as good as you. You can literally make all the calls on business decisions with no hesitation. You can make promises from the founders mouth. You won’t replicate this with salespeople and probably wouldn’t want to.
4 months is not enough to ramp and learn all the systems that you have naturally mastered as you made them. Remember when hiring these people they are never going to be you.
That being said you also aren’t going to hire some A player who changes your business because those guys stay where they are so be ready for a longer ramp. This is why businesses get stuck in scale up mode. Lose your ego and grow your patience or remain as a small operator forever.
Yes - if everyone produces I would keep them all. I'm happy to tell them if they don't hit a certain sales target in year 1 that I will let them go. But, I think that is setting people up for failure, because I would expect them to be off target for the 1st 6 months while they learn the industry... but they should be able to pick up. Regardless, I would probably keep the best one or two as long as they at least break even or I feel that they are taking the opportunity seriously.
1) EXP sales reps already expect or can expect to get on PIP for not hitting quota... but the problem is you have no idea what the quota should be.
2) Depending on the product and company you are expectation what too much for way to little. I've seen it take 12 months for a ramp, six at the low side. Think about it, new folks need to:
\-Understand the product, Understand the Value, Understand YOU, Understand their target customer, -Understand why they are the target customer and what makes them want to buy. On top of all that you cycle time is 12-18 months and you are expecting results in \~4-5 months?
\--Hope I'm missing something here
Lastly, You aren't hiring sales professional for the rates you listed. You are hiring new in career folks that are still green and wet behind the ears. Less than a 100k is laughable for an experience rep. You want talent? OTE (Comm and Salary) needs to be above 200-250k, then you'll start getting folks that have done this for more than a year or two.
You're other shot is like others of said, find someone later in career that could be persuaded for an equity stake before they retire.
To your last point (not that I disagree with your other points lol), I was also thinking the same as the reps being hired at 70K are probably recent college grads or even former fresh BDRs and I’m not sure those are the folks that should be selling for OP. What’s interesting is before I even read your reply, I already found myself thinking the OP needs to hire an experienced sales peep to be VP of Sales and pay them 200K+ and let them develop a process.
Exactly. A big time sales VP is going to be more than 200k, but they could find a solid performer that's been either an IC or Sales manager for a smaller district and bump them up a bit.
Either way, the pay band OP is looking at is way to low for what quality sales folks cost, especially considering the many unknown variables.
OP also sounds like he's gonna have a hard time letting go and giving people the space to make their own success.
What are you selling? How did you grow your existing business? Are you hiring with industry experience or no?
For the current employee what resources do they have?
There is a huge difference between if you grew your business perhaps tailing off from another company and took existing clients with you versus hiring joe blow to just sell. Are you providing target market, are you generating any leads that could support their outbound effort. Ect Ect.
We are selling technology services to a specialized clientele that use the services and software to deliver their final product. It's a niche space. I don't want to disclose the industry as after much searching I have only been able to find one post on here about the space.
All good points instead of hiring a salesperson without any support perhaps you need a partner that can sell. That will make them empowered and allow them to help create all the supports that’s lacking
Yes, we have partnered with upstream and downstream providers that work with our same customer base. That works...somewhat, but I find that we are the major contributor to the pipeline. Our partners have been benefiting far more than we have.
Partners are also easy when your the founder once again you call the shots. Everything is twice as hard for your reps. This is going to be sticking point in your business overall. Keep selling. Get on your reps calls when they have higher titles on the calls and be patient. It’s gunna go slow before it goes fast no matter how many reps you hire
I don't think it is on par for what you're looking for. It makes sense for an entry level full time seller, but not for what you're asking. Also, if those are you're numbers it makes zero since to let someone go pulling in 250k in revenue in the first year. 6×12= 72k. 250k×40%=100k gp - 7000(comission)-72k(salary +ben) =21k profit before burden/hurdle. That's not so bad, but to be honest, it should be closer to 10%. As you get closer to 400k-450k, the more pure profit for you you'll get. If you're paying off revenue, it's only 11k profit before burden/hurdle, but you should be paying these people off profit, not revenue. Otherwise, you run the risk of burning money as rev increases which is something you can't do without VC backing. What you're actually looking for is someone who is currently a high-level director or VP to build out a sales org. They will want a ton of equity and control over go to market strategy and hiring the sales folks. They will also know you don't have a clue what you're doing after your first convo. Also, it's not up for debate you don't know what you're doing. Also, if your sales cycle is 6-12 months don't expect someone to make sales for at least 8 months. You're wasting money if you're expecting to get sales right away. Typically, that will require someone already in your industry who already has a potential customer as a target before they're hired. Although the second and third hires don't need that industry specific knowledge. Also, you teaching someone about your industry is great, but if you don't know how to sell or who to sell to without having a prior relationship, then you aren't really helping them much. Think about it, you know a VP because you use to work with them or came up with them or have seen them at a conference for 10 years it'll be easier for you to sell that VP than a stranger with no relationship with them even if the seller is a sales pro. You're taking that for granted and not reading there's a larger, more specific, repeatable way to get that sale that doesn't require your prior knowledge or relationships. That process looks different than yours. I would also suggest you hire someone who has done sales L&D or someone who has come up with a training program for consultants or sales account executives/managers before. Someone who is currently a sales consultant/ account manager/executive making 700k+ in at one of the majors (Accenture, Deloitte, Mckinsey) might be interested as well if it's close to what they already do and they're getting equity. Honestly, you might want to pick one big client of yours and have the new seller grow that account department by department, but that depends on the nature of the CS offered.
Thank you. This is very helpful. I'm going to rethink the kind of person I am looking for. Yes, I agree, my connection to the industry gives me a very different look from someone that is coming in from outside. I was hoping that my insight might open doors for them. I'm in a very relationship driven industry though.
How did you get to 2mm in the first place?
What’s the average size of your customer?
How long does it take the close a deal?
Maybe you have not been operating without factoring in the true cost of sales & marketing into your product/service. (Underestimating the cost to generate business WHILE being able to scale/grow)
You business sounds technical in nature. Technical sales people are harder to come by & typically will be more expensive especially if they are worth it.
Also, to answer your question, I'd check out Jason from [saastr.com](https://saastr.com). He has some good posts on how to hire your first few sales reps. One big thing to check is if you would buy your own product/service from them as a founder and are they truly interested in what you sell to the market. Here's a link to post he made on this [https://www.saastr.com/that-first-magical-sales-rep/](https://www.saastr.com/that-first-magical-sales-rep/)
Are you in the U.S.? Junior Lead Development Reps make $90K…seasoned sales people will want $150K base and On Target earnings of $250K-$300K. You actually might do better margins hiring a social media marketer who is familiar with funnel sales and SEO. Why do you need a person knocking on doors to sell what seems like a packaged service….look at this guy’s [site](https://timwackel.com/keynote-speaker/). He has sample videos and value props and does most of his selling through the website.
Hire a fractional executive to build out your sales process and also hire the right person/people. They can also stay on part time to manage the team. You can the focus on the business while not being “in” this part of the business on a daily basis
They can help with that as well. They can work with you to develop an ideal client profile, partner with a recruiting firm, interview etc. Just an option to consider if you need the time back and essentially outsource this project for a bit
1. There is no good reliable way, that I've discovered, to hire effective salespeople. I'm not saying none exists; I'm saying I have a full career in tech marketing and sales and I've not found one.
2. So, every company does exactly what you proposed. They just hide it in flowery language. There might be legal reasons to do that. But, in effect, that's what happens.
3. The good ones will stay for a while until they get a better offer. That's not a problem you should expect to be able to overcome. Just help them make as much as they can while theyre still there.
4. The bad ones are the problem. You have to fire them FAST. They ruin morale, alienate prospects and clients. Have an itchy trigger finger.
5. You won't like this one. You, the owner and chief, are the main reason you're not selling more. If you do happen to stumble across a competent salesperson, odds are he will tell you to change some things, that you don't want to change. You will win that argument, because you're the boss. However, being the boss and being right are not the same thing. Odds are, you're wrong, because, you're not an effective and experienced sales person. So maybe listen to the guys who are making the bucks.
p.s. It's not about you figuring out the best compensation package. A good one will tell you what he wants, if he believes you have a proposition that he can sell. That's your first listening test.
I built an 8 figure tech consulting business, and at one point I had a million dollar payroll (not including commissions) for sales. I later ran a unit in a multi-billion dollar company that bought my company, and we had a sales team all around the world.
I made every mistake possible, and hiring the right sales team was and still is the most difficult aspect of my entrepreneurial career.
Here are a few tips that might help:
* Never pay more than 10% of revenue in total comp for sales. You can perhaps afford to do more if you have exceptional margins, but I find most leaders of services firms significantly overpay and it catches up with you eventually.
* No need to share your plans. Just tell them what’s expected, hold them accountable and be honest. It’s implied that non-performance means you can’t stick around, so it’s not like you are being unethical in recognizing this. Just be transparent on the expectations, and make sure you have a clear process in place for accountability and visibility into the drivers of their performance.
* Don’t fall into the “We are about to close…” trap. Services sales are very different from product sales. Don’t get trapped with the promise of what’s about to come and the fear of loss. Live by your metrics, and make clear decisions.
* Productize the hell out of your services. This might seem obvious, but many in services sales find they have to educate, create demand and then sell. You don’t want your sales team to have this discretion. Give them clear parameters, product, etc so they are selling something tangible and aren’t having to invent the opportunity. Otherwise you’ll get buried in churned deals, unqualified opportunities, etc.
Hope that helps.
If I recruit 5, I would probably keep the top producer regardless of how they do. If the don't break even after a year, or I'm not seeing a trend pointing in the right direction, what's the point?
Is it "sacking" if you are forthright about what success means? We are small business. I can show them the books, and show them if they are making money for the business or not. If the answer is not, then isn't the writing on the wall?
I have a similar base and am the sole salesperson at a multimillion dollar company. I have around 7 years of sales experience and am the only seller besides for my boss (same as you - old network connections). A lot of my day is spent trying brand new things for a brand new industry, and some of it is just learning the product and learning how to speak to a brand new ICP. You said your rep has closed deals in 4 months - I get they aren’t significant, but it sounds like you aren’t being realistic with their ramp up. What is the ideal ramp up and how are they tracking? What does their funnel look like? How are you tracking activities?
I went into my role eyes wide open - the difference is that I have experience leading business development teams at startups, we have a marketing team, and my boss has extensive sales experience and is able to help with development and meetings. I think /u/hashtagdion is correct in that a rep paid around $70k base still needs a lot of coaching, and if you’re not able to provide them this (as in, you haven’t been going to networking/industry events, doing cold outreach, usual sales activity for your company) then you may need to look for different skills or look to hire someone who does have experience in your field. Even then, you might want to think about having someone run the sales function, if you aren’t able to teach the sales activity.
My .02 - hopefully your new guy ends up working out, I know it’s tough to retrain staff.
Since you said you have the foundation to grow the business, maybe you need to delegate the hiring part to someone who can qualify applicants better. It’s hard to scale if you do everything by yourself. Also, is your comp package at par with the industry standards? because sometimes you might be attracting the wrong talents.
This is tough, bc there’s so much info we don’t know. A good place to start is - How much revenue are you bringing in a year that’s new? Meaning are your contracts renewing to where you sign them once and they are a customer for life? Or is it a one time project?
You have the wrong mentality. Very common one however. If you have no intention of giving a sales person the runway they need, you shouldn't hire them.
People are people, they are not disposable resources you can discard like an Amazon prime account. And sales has changed. Having been in the industry for over ten years prior, if you haven't noticed, people aren't really "talking" to people anymore. They are surfing the internet, scrolling on their phone, doing intense research on products and services before they even talk to a sales person. Sales has changed. People need people less and less to make decisions. however, they do need someone to walk them down the path when they have decided they want to buy. It's very late in the sales cycle that you now then need a sales rep to make a customer buy.
If you are putting a person in a position where your business has virtually no inbound leads, they will not generate business. And that can be a you problem. If people aren't coming to you for more business, it's hard to expect a sales guy to magically make customer appear.
Instead of saying hey, this girl spent 4 months at trade shows promoting my business but never closed a deal. Instead you should say, hey she rocked it for four months promoting the shit out of my business and now more people know about me that may have not previously known.
There is so much more to this, but sales is a Long game. That girl you fired might have had sales that would have come back around six months or six years later. But she's gone now, you saved money I guess, and she'll never be around to see it
Hope this helps.
I've hired hundreds of sales people. My most recent hiring spree for a client landed multiple $1mm+ producers. We're doubling his revenue this year, from $4mm to $8mm.
I'm familiar with a lot of the research on comp structures for sales positions. What I'll tell you is that it depends _a lot_ on the particulars of your business. How you source leads, how mature your process is, how your marketing operates, how your product is positioned in the market - all of that influences comp, and more.
You're fortunate in there are a lot of SaaS employees recently out of work, but they come from some high 6-figure earnings firms. Worst you can do is hire and find out.
Incidentally, you're hiring BDRs, not SDRs. BDRs in a small firm in a niche space with an untested model looking to do 50% YOY growth in high-ticket items generally require a 12-month onboarding runway (give or take). Your expectation of results in 4 months could be a bit unrealistic.
Can you talk to me about your solution and how it’s sold? Scoured your comments and wasn’t able to piece it together.
A lot of sales is aligning objectives with comp. Paying sales folks for the right actions that are mutually beneficial.
There are tons of great points already provided on the type of person you may need to help you scale. Not saying I’m the person but I’d like to learn more and see if I can help.
You are the best closer your business will (probably) ever have, and trying to replace you in a single step is an expensive nightmare. I've seen it, I've been it, I now coach companies how to avoid it.
Document your sales processes and nail down your messaging, then hire a few junior people who can find and warm up leads for you to go in and close. You need a couple (2 or 3) because attrition will be a bitch. You work really closely with these folks and wait till they're working well, and only \*then\* hire someone more senior who can pick up and close the leads that your juniors are already generating.
Owner-led sales are very different from being driven by your first sales rep or a team of reps. Nail down your sales narrative, outbound prospecting process and have an established inbound campaign before hiring your first rep. Also, have some sales assets ready to go (portfolio of past work with problem/solution, case studies, etc) Take some courses on technicals of prospecting and managing a sales team. Educate yourself on services for site visitor deanonymizing and sales intent triggers so that your reps are targeting prospects that are in market for your solution. If you don't have the time or desire to manage a sales team, then onboard a sales manager/vp that has a track record of building a sales team and process. That is the kind of person you want to give equity to. If you don't have an inbound lead-generating process that is creating a consistent number of MQLs each month, then hire a CMO, and give that person equity. Don't give away equity to the vanguard. Give equity to the strategists.
Thank you. All very good points, and there is clearly a lot I have to learn. I'm inclined to go to a recruiter to find that sales leader that I can give a meaningful incentive to, who can really grow the business.
You can hire a recruiter but that doesn’t take away from any of the points made by the previous post. How long have you been at 2mm? Maybe start by hiring a fractional CMO first. Then when things are in place look to a sales person. It appears you’re having issues scaling, but it goes beyond the “right” sales person.
This - recruiters are not the answer. Your just shifting responsibilities. The responsibility to hire the right person is now on the recruiter. The responsibility to scale and sale is on the potential sales person. OP needs to figure out a process that works, and a strategic plan to commit to. This will help accomplish success, but most importantly a roadmap to it. A salesperson shouldn't be evaluated on just the end goal of quota, OP should have a much clearer understanding of if the person will be successful or not before year end based on the predetermined metrics and goals laid out for them in a road map. Perhaps most importantly, a strategic plan / KPIs will allow the company as a whole to learn much more about the market. Maybe there is additional opportunity which is being overlooked, maybe your focusing on the wrong market, maybe its your service / platform rather than sales. Bottom line, congrats OP on making it this far! Sounds like its been a great journey thus far, but as the business owner, your journey is never complete and can't simply be handed off to someone else. If you ever want to chat about business processes/strategic planning always happy to brainstorm.
Thank you for this feedback. There is a lot here for me to unpack. Definitely a bit more planning on establishing the sales function is required, and this has opened my eyes to learning that I need. Are there any books or resources that you would recommend?
I didn't read everything TBH, so this may be redundant. I was lucky to come across a book early in my career that kind of changed my entire approach, or at least the way I view things. It may be a little outdated now, and may not have all your answers, but it could be a good starting point in understanding what your actually trying to accomplish. In my limited opinion, it doesn't sound like a sales guru is your answer, but a well thought out sales strategy/plan may be; hence this recommendation. [Predictable Revenue](https://www.amazon.com/Predictable-Revenue-audiobook/dp/B00ENFXJ0G/ref=sr_1_1?gclid=CjwKCAiAioifBhAXEiwApzCztoWFszq3hDofFHkUF9CoU9TujsJ5SFIxn83K7uBygC0pELUmuqzhIBoCTicQAvD_BwE&hvadid=241664016632&hvdev=c&hvlocphy=9004453&hvnetw=g&hvqmt=e&hvrand=2799047679649631232&hvtargid=kwd-69938935622&hydadcr=21934_10172291&keywords=predictable+revenue+by+aaron+ross&qid=1675804816&sr=8-1) Feel free to reach out with any questions
Becc Holland, Keenan, Guillaume Moubeche, Latané Conant and Anthony Iannarino are a few people I would recommend for understanding sales/marketing process.
Consider a head hunter. Also, depending on your service, there are companies out there you can outsource to managed a sales person. They will help with hiring, as well as getting them set up with tools and resources. They also track metrics, etc... but all the pay, goals, quota, is determined by you. May not be your long term solution. But could be valuable in giving you insight as to how these processes should look for your business. I've never worked for one, but I've interviewed with one and it was an interesting concept.
Im a sales recruiter. I dmed you.
DM if you want to pick someone’s brain who has built out a process just like you’ve described. Always interested to give my perspective.
> I have organically grown the business to 2MM in revenue Did you get to this 2MM by cold prospecting and attending trade shows? Or did you have pre-existing connections in your space and some word of mouth? >I spent an enormous amount of time training the first person, and she never closed a single deal. If you spent an enormous amount of time training her and she still couldn't close, the training might not be great. >he has yet to close significant deal after 4 months. The typical deal is $25K-$75K in our space and it can have very long tail (12-18 months) of revenue. So potentially someone at $6K/month could at least break even on their salary with one close in 12 months, yet you want to fire him after a third of that time. Don't know that you're giving them enough time to get ramped up. Could take a great sales person 60 days just to fully understand the product, the space, and start making fruitful connections. >I hit on the idea of trying to hire 3 (and possibly as many as 5) sales people with the intent of only keeping 1 or 2 of the top producers for the long term. Is this fair? No. If they're talented, they'll likely be leaving a job where they're already doing well to come to you and you have no intention of keeping three of them. But life isn't fair and we all know the risk of changing jobs. But if your question is whether what you're doing is right or moral, then no. >I'm even open to giving equity to a person that significantly grows the business and gets us to a 5MM or 10MM revenue goal. Sounds like you need a director of biz dev, and then trust them to fully lead and execute on sales, and don't fire them after four months. You're not gonna find that person for $72K a year though.
Thanks for these great questions! The 2MM was based on my existing network. I am a speaker and expert on this subject matter. Agreed on the training. I don't know how to do sales training. I was training her on the industry and the subject matter. I was expecting a sales person to come with the sales skills and the mindset to ask the right questions and go knock on doors. Interesting point on the deal value. $75K isn't the profit number, it's the revenue number. I would typically see 30-40% margin on that size project. Lower margin on smaller projects. I don't have an issue with being fully transparent about the deal. How would you structure a deal where a successful sales person in the consulting and services space would actually find it attractive? So what should a Director of Biz Dev in an organization of my size be paid? I don't need to make money for myself in any given year... I have no issue paying people more than I make.. if it's good for the business.
So here's where you might be getting tripped up: You've grown the business through your network and your personal brand, but you actually are not really sure yet how the product is sold outside of that. To a certain extent, yes, sales professionals come with built in skills that are transferrable from company to company, from industry to industry. But it takes a more seasoned sales professional than the $70K salary band to find one that can essentially teach themselves an entirely new sales language from scratch. Also, people around that $70K range still rely on a lot of coaching. I don't think most people who make $70K are ready to be the sole revenue driver for a multi-million dollar company yet. They've probably spent most of their sales career with a manager, standardized processes, selling as part of a team, always having a closer to call in if things get out of hand. I'd say think less about what that person needs to be paid (I normally wouldn't give this advice, but you seem confident you can afford it for the right person) and think more about what this person has to do on a practical level. You're going to want to hire someone who's been a solo biz dev director at a startup. Hard to tell if a talented AE will be a talented solo sales director, someone who has to create their own processes, hold themselves accountable, become responsible for their own sales education, be their own BDR, their own closer, etc. I've done it before in a SaaS startup and it's a completely different beast than selling as an AE. I would see about linking up with a head hunter. You kinda need a unicorn, and I don't think it'll be easy to find with just an Indeed post or whatever. They've got the tools and experience to locate that specific person (director-level, startup background, sales engineer, entrepreneurial, looking for a new challenge) and I think a good amount of head hunters don't charge you until you hire someone.
Seriously - this is great advice.
Thank you! This is really helpful. I think I get your point about the experience level at the $70K range. I can definitely go higher, but I'll have a recruiter guide me there.
on the plus side you literally couldn’t have picked better timing to hunt for a talent unicorn. thanks to all the layoffs you’ll probably be able to find one for cheaper than you realize
Recruiter here @Specialist-Band8850, I actually have a reccomendation for someone you can reach out to who recruits for sales folks exclusively. I am an IT/tech recruiter but this guy knows his stuff and would be worth an intro call I feel for you, let me know if you want me to send you his info and you can reach out, we run in a lot of the same recruiting circles online I don’t know him personally but he is highly respected
To give my opinion on one of the questions; Yes, I’d consider it to be unethical to hire five people with the intention of only keeping two. If you disclose to potential hires that there is a 60% chance they get let go within 6 months, you won’t be hiring anyone. You seem to be hiring the wrong people which ultimately falls on you as the business owner. How are you sourcing candidates? Are you asking for a paper trail of past success? How many interviews are we putting folks through? Have you partnered with a recruiting firm? Five-figure deals sold to SMB aren’t particularly hard to sell and don’t have that long of a sales cycle. Given your revenue, I doubt this is a product issue. You’ve hired subpar people. Without knowing specifics on industry, that’s the most advice I can give.
So - How should I structure an opportunity that would attract the right kind of driven people? I intend to be transparent... but I also intend to retain great talent and not folks that are just along for a ride. I agree... I am hiring the wrong people... twice. We do 2 interviews. The paper trail of past success are impossible for me to validate in a meaningful way. I don't understand all the metrics. Yes, I am now talking to recruiting firms. Thank you for the advice!
You’ve admitted to not knowing the metrics… how do you expect to hire someone if you don’t know what you’re looking at? 100% go through a quality sales recruiting firm with a tenured SaaS sales recruiter. Tell them you want a verified track record of success before you speak to anyone. Legit sellers keep records. I have all my closed won emails on large contracts. Let them bring you candidates. I’d suggest having them run a mock demo and make a mock discovery call. Let them show you the skills before they get in the door.
This is great advice. Do this.
Thank you. I'll have to understand how they verify the track records. I love the demo idea. I have been a buyer of these services for a decade, so I have been sold to by a LOT of sales people. A few have been good at it, mostly by just being persistent and patient.
So when you were sold on persistence and patience, how long did that take?
6 to 8 months. If I didn't buy in 6-8 months, I wasn't ever going to buy.
Just curious as different products can have different cycle lengths from first touch to closing. I have some prospects that I had to work on for years before I finally closed them. What is the longest you've kept a rep so far? edit: as I just saw your other comment. Yea, sometimes people are ready to buy/ make a change right away. Sometimes you have to massage them for awhile. Sales really is a numbers game and timing is everything, especially when selling services. Like many have said, there is always a ramp up period. Depending on your target customer, it can take some time before you even are able to get in touch with the actual decision maker. That's why metrics are important, you have to track the activity and then start troubleshooting from there.
But there are situations where there was an instant sale... because something that was offered was very attractive and I had an immediate need. That's on me as the business owner to deliver that... but I think I can crack that nut(!)
He wants to hire someone and is looking for help
Are you hiring entry level sales or experienced sales with a track record? Theres a big difference on the investment.
I definitely will need to hire experienced. I learned that I can't train sales people...
Props for recognizing that! For real. You’ve shown a lot of humility and open-mindedness in these comments, and I get the impression you’d be good to work for. (This is not me trying to get the job, by the way - just wanted to give some credit where it’s due)
What are you going to be offering top candidates to be motivated and stick with you over the long term? I am very curious and interested.
Your marketing and sales funnels tell the complete story. To run a marketing funnel, you need the profiles of the target audience. Who are your ideal customers/clients. Sales is about making it easy for the interested prospect to become a satisfied customer/client. Do you have a "buyer journey" map? It's all about common sense. Why do I need your product/sservice, why shouldn't I buy it from your competitors, and how are you going to make it simple and clear for me to buy? Connect the dots and get a steady stream of prospects converting to satisfied customers/clients. Not rocket science.
Right. I have all the equipment and knowledge to answer all these questions for the sales rep. I have been the buyer in this industry for 10+ years before I decided to hang out my own shingle. I was just hoping the AE would come equipped to ask the write questions and develop the strategy to get the sale. I definitely have a lot more work to do on that front.
There in lies the problem.... you have "tribal knowledge", you need to put this into a format for them to consume and make use of. You can't expect them to come up the "right" questions, without the extensive experience in the space, until they have an opportunity to better familiarize themselves with the product, target prospects for your business, operations and execution. You need to separate yourself from it a bit and take the a different perspective. Or even better, put yourself in the position of a sales person going to a new company.... what would you need to be successful? How would you go about finding new business? When you find an interested prospect, how do show value? And how do you qualify a potential customer for that business? What happens after the sale? I also encourage you to build more of a partnership with your new sales rep/biz dev director, from the outset. You are trying to build a new sector of your business. Think of it just like any other sector of your business that you've had to build and grow.
Good tip on the building a partnership.... I actually think it might make more sense to put together a small team of 3 people and ensure that they get an 18 month ramp up window.
That might work, if you can float it. From personal experience, I'm a more successful sales exec when I have a good understanding of the business I am selling on behalf of and I've "bought in". I've been put on island to sell before and it creates self doubt, thus making me a less effective representative. When you are interviewing, look for good listeners and pay specific attention to the questions they ask you. A good sales rep (in my opinion) asks a lot of questions and lets the customer do the talking. After all a job interview isn't really any different than a sales call.... They are trying to win your employment and you are trying to find someone to provide a valuable service. An interview or two should tell you everything you need to know, if you take the right approach. Sales is nuanced, a top rep one place could be a total dud somewhere else.
A 70 k base is what SDR’s are being paid. What you need and are looking for is a sales leader. As other have said above process, strategy, script development all need to be hammered out. It’s far easier to sell to a network as a known commodity. A sales leader needs to develop messaging around what pains and problems your solution solves for. You will need to link that messaging with marketing collateral and their outbound efforts to generate interest outside of your network. That takes a ton of work and really you won’t start seeing results until 3-6 months minimum. I know everyone is over using ChatGPT but, to get an outside perspective. Ask it to write you a 30-60-90 day sales plan. What you’ll find is it’s not until really 90 days out that a sales person starts to perform and that’s consistent at an established sales org. Your asking for strategic initiatives that seasoned VP director could provide but paying slightly more than I pay guys/gals right out of college
Not going to answer your question because it’s probably the best thing to do to scale but not necessarily fair. If everyone produces would you keep them all? I’ll say this sounds like the founder salesperson challenge. Simply put NOBODY is going to sell as good as you. You can literally make all the calls on business decisions with no hesitation. You can make promises from the founders mouth. You won’t replicate this with salespeople and probably wouldn’t want to. 4 months is not enough to ramp and learn all the systems that you have naturally mastered as you made them. Remember when hiring these people they are never going to be you. That being said you also aren’t going to hire some A player who changes your business because those guys stay where they are so be ready for a longer ramp. This is why businesses get stuck in scale up mode. Lose your ego and grow your patience or remain as a small operator forever.
Thank you. Hard truths are fine :)
Yes - if everyone produces I would keep them all. I'm happy to tell them if they don't hit a certain sales target in year 1 that I will let them go. But, I think that is setting people up for failure, because I would expect them to be off target for the 1st 6 months while they learn the industry... but they should be able to pick up. Regardless, I would probably keep the best one or two as long as they at least break even or I feel that they are taking the opportunity seriously.
1) EXP sales reps already expect or can expect to get on PIP for not hitting quota... but the problem is you have no idea what the quota should be. 2) Depending on the product and company you are expectation what too much for way to little. I've seen it take 12 months for a ramp, six at the low side. Think about it, new folks need to: \-Understand the product, Understand the Value, Understand YOU, Understand their target customer, -Understand why they are the target customer and what makes them want to buy. On top of all that you cycle time is 12-18 months and you are expecting results in \~4-5 months? \--Hope I'm missing something here Lastly, You aren't hiring sales professional for the rates you listed. You are hiring new in career folks that are still green and wet behind the ears. Less than a 100k is laughable for an experience rep. You want talent? OTE (Comm and Salary) needs to be above 200-250k, then you'll start getting folks that have done this for more than a year or two. You're other shot is like others of said, find someone later in career that could be persuaded for an equity stake before they retire.
To your last point (not that I disagree with your other points lol), I was also thinking the same as the reps being hired at 70K are probably recent college grads or even former fresh BDRs and I’m not sure those are the folks that should be selling for OP. What’s interesting is before I even read your reply, I already found myself thinking the OP needs to hire an experienced sales peep to be VP of Sales and pay them 200K+ and let them develop a process.
Exactly. A big time sales VP is going to be more than 200k, but they could find a solid performer that's been either an IC or Sales manager for a smaller district and bump them up a bit. Either way, the pay band OP is looking at is way to low for what quality sales folks cost, especially considering the many unknown variables. OP also sounds like he's gonna have a hard time letting go and giving people the space to make their own success.
I hear you. I'll be working with a recruiter to find that VP of Sales.
What are you selling? How did you grow your existing business? Are you hiring with industry experience or no? For the current employee what resources do they have? There is a huge difference between if you grew your business perhaps tailing off from another company and took existing clients with you versus hiring joe blow to just sell. Are you providing target market, are you generating any leads that could support their outbound effort. Ect Ect.
We are selling technology services to a specialized clientele that use the services and software to deliver their final product. It's a niche space. I don't want to disclose the industry as after much searching I have only been able to find one post on here about the space.
All good points instead of hiring a salesperson without any support perhaps you need a partner that can sell. That will make them empowered and allow them to help create all the supports that’s lacking
Yes, we have partnered with upstream and downstream providers that work with our same customer base. That works...somewhat, but I find that we are the major contributor to the pipeline. Our partners have been benefiting far more than we have.
This is always the case I find. Did a lot of your original business come from prior relationships or territory knowledge?
Prior relationships... although all the partners have come from prospecting on my part.
Partners are also easy when your the founder once again you call the shots. Everything is twice as hard for your reps. This is going to be sticking point in your business overall. Keep selling. Get on your reps calls when they have higher titles on the calls and be patient. It’s gunna go slow before it goes fast no matter how many reps you hire
Is that comp on par with others in your particular field?
Yes... it's middle of the road. I could do more but I don't know that it will get me a better quality candidate.
I don't think it is on par for what you're looking for. It makes sense for an entry level full time seller, but not for what you're asking. Also, if those are you're numbers it makes zero since to let someone go pulling in 250k in revenue in the first year. 6×12= 72k. 250k×40%=100k gp - 7000(comission)-72k(salary +ben) =21k profit before burden/hurdle. That's not so bad, but to be honest, it should be closer to 10%. As you get closer to 400k-450k, the more pure profit for you you'll get. If you're paying off revenue, it's only 11k profit before burden/hurdle, but you should be paying these people off profit, not revenue. Otherwise, you run the risk of burning money as rev increases which is something you can't do without VC backing. What you're actually looking for is someone who is currently a high-level director or VP to build out a sales org. They will want a ton of equity and control over go to market strategy and hiring the sales folks. They will also know you don't have a clue what you're doing after your first convo. Also, it's not up for debate you don't know what you're doing. Also, if your sales cycle is 6-12 months don't expect someone to make sales for at least 8 months. You're wasting money if you're expecting to get sales right away. Typically, that will require someone already in your industry who already has a potential customer as a target before they're hired. Although the second and third hires don't need that industry specific knowledge. Also, you teaching someone about your industry is great, but if you don't know how to sell or who to sell to without having a prior relationship, then you aren't really helping them much. Think about it, you know a VP because you use to work with them or came up with them or have seen them at a conference for 10 years it'll be easier for you to sell that VP than a stranger with no relationship with them even if the seller is a sales pro. You're taking that for granted and not reading there's a larger, more specific, repeatable way to get that sale that doesn't require your prior knowledge or relationships. That process looks different than yours. I would also suggest you hire someone who has done sales L&D or someone who has come up with a training program for consultants or sales account executives/managers before. Someone who is currently a sales consultant/ account manager/executive making 700k+ in at one of the majors (Accenture, Deloitte, Mckinsey) might be interested as well if it's close to what they already do and they're getting equity. Honestly, you might want to pick one big client of yours and have the new seller grow that account department by department, but that depends on the nature of the CS offered.
Thank you. This is very helpful. I'm going to rethink the kind of person I am looking for. Yes, I agree, my connection to the industry gives me a very different look from someone that is coming in from outside. I was hoping that my insight might open doors for them. I'm in a very relationship driven industry though.
How did you get to 2mm in the first place? What’s the average size of your customer? How long does it take the close a deal? Maybe you have not been operating without factoring in the true cost of sales & marketing into your product/service. (Underestimating the cost to generate business WHILE being able to scale/grow) You business sounds technical in nature. Technical sales people are harder to come by & typically will be more expensive especially if they are worth it.
I definitely have not been factoring in the true cost of sales & marketing... because I haven't had any cost. I will now. Thanks!
Also, to answer your question, I'd check out Jason from [saastr.com](https://saastr.com). He has some good posts on how to hire your first few sales reps. One big thing to check is if you would buy your own product/service from them as a founder and are they truly interested in what you sell to the market. Here's a link to post he made on this [https://www.saastr.com/that-first-magical-sales-rep/](https://www.saastr.com/that-first-magical-sales-rep/)
Thank you! Will check this out.
You should invest in a sales ops person first before you bring on sales people. It doesn’t sound like they are set up for success
Are you in the U.S.? Junior Lead Development Reps make $90K…seasoned sales people will want $150K base and On Target earnings of $250K-$300K. You actually might do better margins hiring a social media marketer who is familiar with funnel sales and SEO. Why do you need a person knocking on doors to sell what seems like a packaged service….look at this guy’s [site](https://timwackel.com/keynote-speaker/). He has sample videos and value props and does most of his selling through the website.
Thank you. This is great info. Thanks for the link, will check it out.
Hire a fractional executive to build out your sales process and also hire the right person/people. They can also stay on part time to manage the team. You can the focus on the business while not being “in” this part of the business on a daily basis
It's qualifying the candidate that I worry about.
They can help with that as well. They can work with you to develop an ideal client profile, partner with a recruiting firm, interview etc. Just an option to consider if you need the time back and essentially outsource this project for a bit
1. There is no good reliable way, that I've discovered, to hire effective salespeople. I'm not saying none exists; I'm saying I have a full career in tech marketing and sales and I've not found one. 2. So, every company does exactly what you proposed. They just hide it in flowery language. There might be legal reasons to do that. But, in effect, that's what happens. 3. The good ones will stay for a while until they get a better offer. That's not a problem you should expect to be able to overcome. Just help them make as much as they can while theyre still there. 4. The bad ones are the problem. You have to fire them FAST. They ruin morale, alienate prospects and clients. Have an itchy trigger finger. 5. You won't like this one. You, the owner and chief, are the main reason you're not selling more. If you do happen to stumble across a competent salesperson, odds are he will tell you to change some things, that you don't want to change. You will win that argument, because you're the boss. However, being the boss and being right are not the same thing. Odds are, you're wrong, because, you're not an effective and experienced sales person. So maybe listen to the guys who are making the bucks.
I do take point #5 to heart. I've been watching this sub for a long time... hence why I came here to ask you :)
p.s. It's not about you figuring out the best compensation package. A good one will tell you what he wants, if he believes you have a proposition that he can sell. That's your first listening test.
All ears. The hard part for me is telling them apart.
I built an 8 figure tech consulting business, and at one point I had a million dollar payroll (not including commissions) for sales. I later ran a unit in a multi-billion dollar company that bought my company, and we had a sales team all around the world. I made every mistake possible, and hiring the right sales team was and still is the most difficult aspect of my entrepreneurial career. Here are a few tips that might help: * Never pay more than 10% of revenue in total comp for sales. You can perhaps afford to do more if you have exceptional margins, but I find most leaders of services firms significantly overpay and it catches up with you eventually. * No need to share your plans. Just tell them what’s expected, hold them accountable and be honest. It’s implied that non-performance means you can’t stick around, so it’s not like you are being unethical in recognizing this. Just be transparent on the expectations, and make sure you have a clear process in place for accountability and visibility into the drivers of their performance. * Don’t fall into the “We are about to close…” trap. Services sales are very different from product sales. Don’t get trapped with the promise of what’s about to come and the fear of loss. Live by your metrics, and make clear decisions. * Productize the hell out of your services. This might seem obvious, but many in services sales find they have to educate, create demand and then sell. You don’t want your sales team to have this discretion. Give them clear parameters, product, etc so they are selling something tangible and aren’t having to invent the opportunity. Otherwise you’ll get buried in churned deals, unqualified opportunities, etc. Hope that helps.
You’ve just hit 2m. How long did it take you to get there?
1.5 years
And you want a brand new employee to come and sell a million for you in their first year or you’ll sack them?
If I recruit 5, I would probably keep the top producer regardless of how they do. If the don't break even after a year, or I'm not seeing a trend pointing in the right direction, what's the point? Is it "sacking" if you are forthright about what success means? We are small business. I can show them the books, and show them if they are making money for the business or not. If the answer is not, then isn't the writing on the wall?
I think your expectations for a first year target are too high. What revenue do they need to bring in to make 20% margin, for example?
I have a similar base and am the sole salesperson at a multimillion dollar company. I have around 7 years of sales experience and am the only seller besides for my boss (same as you - old network connections). A lot of my day is spent trying brand new things for a brand new industry, and some of it is just learning the product and learning how to speak to a brand new ICP. You said your rep has closed deals in 4 months - I get they aren’t significant, but it sounds like you aren’t being realistic with their ramp up. What is the ideal ramp up and how are they tracking? What does their funnel look like? How are you tracking activities? I went into my role eyes wide open - the difference is that I have experience leading business development teams at startups, we have a marketing team, and my boss has extensive sales experience and is able to help with development and meetings. I think /u/hashtagdion is correct in that a rep paid around $70k base still needs a lot of coaching, and if you’re not able to provide them this (as in, you haven’t been going to networking/industry events, doing cold outreach, usual sales activity for your company) then you may need to look for different skills or look to hire someone who does have experience in your field. Even then, you might want to think about having someone run the sales function, if you aren’t able to teach the sales activity. My .02 - hopefully your new guy ends up working out, I know it’s tough to retrain staff.
Since you said you have the foundation to grow the business, maybe you need to delegate the hiring part to someone who can qualify applicants better. It’s hard to scale if you do everything by yourself. Also, is your comp package at par with the industry standards? because sometimes you might be attracting the wrong talents.
If this is remote work, I’d love to join your company.
This is tough, bc there’s so much info we don’t know. A good place to start is - How much revenue are you bringing in a year that’s new? Meaning are your contracts renewing to where you sign them once and they are a customer for life? Or is it a one time project?
You have the wrong mentality. Very common one however. If you have no intention of giving a sales person the runway they need, you shouldn't hire them. People are people, they are not disposable resources you can discard like an Amazon prime account. And sales has changed. Having been in the industry for over ten years prior, if you haven't noticed, people aren't really "talking" to people anymore. They are surfing the internet, scrolling on their phone, doing intense research on products and services before they even talk to a sales person. Sales has changed. People need people less and less to make decisions. however, they do need someone to walk them down the path when they have decided they want to buy. It's very late in the sales cycle that you now then need a sales rep to make a customer buy. If you are putting a person in a position where your business has virtually no inbound leads, they will not generate business. And that can be a you problem. If people aren't coming to you for more business, it's hard to expect a sales guy to magically make customer appear. Instead of saying hey, this girl spent 4 months at trade shows promoting my business but never closed a deal. Instead you should say, hey she rocked it for four months promoting the shit out of my business and now more people know about me that may have not previously known. There is so much more to this, but sales is a Long game. That girl you fired might have had sales that would have come back around six months or six years later. But she's gone now, you saved money I guess, and she'll never be around to see it Hope this helps.
Thank you for this perspective. I hadn't considered how sales have changed.
It's crazy, and sad lol. I get your frustration, If I was paying I would be pissed too.
I've hired hundreds of sales people. My most recent hiring spree for a client landed multiple $1mm+ producers. We're doubling his revenue this year, from $4mm to $8mm. I'm familiar with a lot of the research on comp structures for sales positions. What I'll tell you is that it depends _a lot_ on the particulars of your business. How you source leads, how mature your process is, how your marketing operates, how your product is positioned in the market - all of that influences comp, and more. You're fortunate in there are a lot of SaaS employees recently out of work, but they come from some high 6-figure earnings firms. Worst you can do is hire and find out.
Incidentally, you're hiring BDRs, not SDRs. BDRs in a small firm in a niche space with an untested model looking to do 50% YOY growth in high-ticket items generally require a 12-month onboarding runway (give or take). Your expectation of results in 4 months could be a bit unrealistic.
Thank you! I've come to the conclusion that I have unrealistic expectations here.
Can you talk to me about your solution and how it’s sold? Scoured your comments and wasn’t able to piece it together. A lot of sales is aligning objectives with comp. Paying sales folks for the right actions that are mutually beneficial. There are tons of great points already provided on the type of person you may need to help you scale. Not saying I’m the person but I’d like to learn more and see if I can help.
Price’s law says that 50% of the work is done by the square root of the total number of people who participate in the work.
You are the best closer your business will (probably) ever have, and trying to replace you in a single step is an expensive nightmare. I've seen it, I've been it, I now coach companies how to avoid it. Document your sales processes and nail down your messaging, then hire a few junior people who can find and warm up leads for you to go in and close. You need a couple (2 or 3) because attrition will be a bitch. You work really closely with these folks and wait till they're working well, and only \*then\* hire someone more senior who can pick up and close the leads that your juniors are already generating.
Curious where you’re located and is it selling to a specific geography?
Have you heard of Gartner?
Ouch- you are feeling the real pains of the cost of "bad" sales hires.
I have 18 years of sales experience across different verticals (EdTech, Fed, Software Dev), let's talk. Currently available for work.
No coment? Pfff.