Hiring salespeople at agencies can be tricky, because candidates are great at selling themselves… but not necessarily great at selling your agency’s services.
The answer to “should I hire a salesperson?” depends on a range of factors.
For example, do you want an Equity-oriented agency, or a Lifestyle-oriented agency? Do you need a hunter, farmer, or both? What level of experience can you afford, and what structure do you have in place to support a salesperson?
Once you’ve decided your agency needs a salesperson, you need a process. To hire the right salesperson, there are four keys:
- Define the right role,
- Hire the right person,
- Align incentives with the right compensation plan, and
- Hold them accountable on getting results.
Let’s dig into each of those below, so you can make the right decisions. [Last updated: April 2023]
1) Define the right role
Hiring a salesperson begins with defining the right role. Much like defining your agency’s target client, you should understand your target candidate in order to hire effectively.
In sales, duties may include:
- Prospecting to generate leads
- Cold-calling to get sales calls/meetings
- Doing meetings to better-qualify prospects and assess fit
- Staying in touch with not-quite-ready leads
- Writing proposals
- Negotiating deals
- Doing thought leadership to attract long-sales-cycle business
- Nurturing/farming/upselling existing clients.
Most people aren’t good at (or don’t want to do) all seven. For instance, a client had a strong prospect with senior experience, but the candidate refused to cold-call.
Here’s what I typically see:
- A Sales Analyst might prospect to generate leads, but won’t contact anyone.
- A “Business Development Representative” (BDR) might do prospecting and cold-calling for leads/meetings.
- An “Account Executive” or “Solutions Expert” might do lead qualification and assessment, write proposals, and may pay some attention to cold-calling or negotiating deals.
- A “VP of Sales” might write proposals, negotiate deals, and demonstrate thought leadership to attract long-sales-cycle business.
- A non-sales account manager or other client services person typically handles existing relationships, such as upselling current clients (although some agencies have a salesperson help with this).
In general, you want the “cheapest competent available person” (CCAP) doing each task. Competence is the baseline; this person must have the technical and soft skills needed to do the job well. After that comes affordability. Remember that cheap is relative according to experience and industry.
So—what duties do you need the new hire to complete? It’s important to nail that down before you jump to examining specific people as solutions.
2) Hire the right person
Asking the right questions and analyzing their answers goes a long way to understanding who would be a good fit for what you need. Focus on their past experience, values (what they believe), and behaviors (how they behave).
Here are some salesperson interview questions to better-understand each candidate:
- What appeals to you about this particular job?
- Across one month, how would you ideally like to split your time between new prospects, current clients, and everything else?
- What was the key to your [accomplishment at previous role]?
- What was your sales quota at [previous job]?
- How do you keep track of details?
- What do you do when a prospect seems to be avoiding you?
- How long was the sales cycle at [previous role]? How did you manage it?
- How do you stay in touch with leads who aren’t ready to buy?
Be sure your candidate is the right fit before you hire! It’s better to wait for the right candidate versus hiring the wrong one and paying for it later.
I’ve found that clients often want to quickly hire someone they know already, but that person often isn’t a good fit for what the agency needs or can afford. Don’t do it—it’s a costly mistake.
3) Align incentives with the right compensation plan
The ideal sales “comp plan” is one that you and the salesperson both like. Look at it from three angles; how will the salesperson impact your agency’s profits, how will they impact the agency’s PM process and workload, and does your job pay enough to attract potential salespeople?
Structuring a compensation plan can be a challenge, because there’s no perfect solution. Remember that it’s all about incentives—so what do you want to incentivize them to do?
Here are some Comp Plan options:
- Commission only
- Salary (or hourly)
- Base salary plus commission
- Flat fee
- Pay per meeting
- Salary + Draw + Commission
- Draw + Commission
Many agency owners want to structure a sales job as 100% commission-based, but the highest quality candidates always have options. No matter how confident they are about their sales abilities, they want backup. I recommend a mix of salary and commission.
Getting into specifics on numbers, it’s all negotiable. For example, a low-level hire might accept a $40K base, whereas someone with plenty of experience might expect $150K+ base. Common commission rates are 10% on new sales and 5% on upsells. Those might get cut in half a year after the original close date, to encourage the salesperson to close new deals.
Perks are also negotiable. You have the option of providing no perks. Or if you’re generous—phones, leased cars, an expense account for client entertainment, conference budget for going to events, etc.
Ultimately, you need to find the right balance on perks. If they’re on the phone all the time, a company-paid unlimited phone plan probably makes sense, but a rental car wouldn’t. A client entertainment budget is helpful, but with limits.
Be sure to arrange a non-solicitation agreement (so they can’t take a new job and sell to the same prospects they pitched while working for you), with advice from your lawyer to ensure it’s enforceable.
Structure your compensation plan thoughtfully, and get on the same page about expectations. For instance, they might start with coffee and then move on to dinner once a prospect’s better-qualified.
4) Hold them accountable for results
Some salespeople are entirely self-managed—but that’s rare. You want results, and they want to get paid. Salespeople tend to prefer focusing on activities, regardless of outcome. This might result in multiple leads, but not enough closed deals. So, how do you keep salespeople accountable?
Create a ramp-up plan for what you expect from them as of Month 1, Month 2, Month 3, Month 6, and Month 12. This usually includes an escalation toward 100% of their quota; the steepness of the ramp depends on their experience and your prospect base. (For instance, they should hit 100% sooner if you focus on small businesses, as opposed to enterprise.)
Make sure your salesperson uses your CRM for tracking everything. This works for staying accountable and will help you retain details once your salesperson eventually moves on.
Structure a quota. This will likely increase over time, but be realistic. Work with your salespeople on setting their quotas; It’s harder for a salesperson to claim a quota was unfair if they were involved the process.
Someone needs to serve as “sales manager”—measuring progress against quota, confirming progress on sales activities (like emails, calls, meetings, proposals) and coaching as people get stuck. Salespeople like talking through in-progress deals, including angles they’ll use against prospect objections.
One client told me his VP of sales refused to do sales management meetings with his team of salespeople, because he felt those were unnecessary. To me, that’s unacceptable—as further accentuated by the team not getting results. This client’s VP was being insubordinate.
Applying this at your agency
Before you hire a salesperson, define the role and the ideal candidate. Make sure you have the appropriate resources and structure set up for his or her success, and maintain accountability. There is no point in hiring a position that doesn’t get results—and success starts with a process.
Question: What’s your process for hiring a salesperson at your agency?