Agency owners frequently ask me, “Should I hire a salesperson?” The answer is, “It depends.”
Let’s look at the factors involved, to find the right answer for you and your agency.
Ask Before You Hire a Salesperson
Consider the following 7 questions.
My first question is, do you want to run an Equity agency or a Lifestyle agency? Equity (aka “high-growth”) typically means they need a salesperson to build and sustain enough sales momentum. Lifestyle is typically less demanding from a leads perspective.
Second, why is the agency considering hiring a salesperson? What’s the “why” behind it? That helps me probe further to understand if it’s the right path for them. Including…
Third, how much do the agency owner(s) like sales? If they don’t like sales, that’s a stronger case for finding someone else. If they like sales, they should probably do sales—no one’s as motivated to sell your agency’s services as you are.
Fourth, do you need a hunter or a farmer or both? That is, do you primarily need someone to qualify and convert primarily inbound leads (more of a “farmer”) or do you need primarily someone who’s going out to develop relationships with people who haven’t opted-in first (more of a “hunter”)? This drives the skillset and behaviors you need… and what you can afford.
Fifth, what can you afford? An early-career “business development representative” (BDR) doing basic qualification might be $40-50K plus moderate commissions. In contrast, a consultative salesperson might demand a $100-150K base plus significant commissions. As I note here, no one will do sales for you if they aren’t happy with the pay.
Sixth, what structure do you have to support them? A good salesperson probably needs a sales support person helping them handle the details so they can move on to close more deals. They’re going to spend budget on meetings and travel, which may or may not have a good ROI. What sales materials do you have for them to make their job easier? Do you have a PM helping them finalize proposals? Do you have an active marketing program to get leads in the first place?
Seventh, how desperate are you for them to work out? I find clients are often looking for a “sales savior”—someone who’ll save the day by bringing in tons of new business. This creates high expectations that most salespeople won’t meet, and then you’re back where you started.
Pros of Hiring a Salesperson
- Focus: Someone is focusing full-time on bringing in new business, rather than being distracted by billing or agency-management work.
- Billables: Having a non-billable salesperson lowers your agency-wide Billable Ratio, but it lets you keep your billable people billable.
- Incentives: You can structure a sales comp plan (their base, commissions, bonuses, etc.) however you want, to find the right balance of incentives.
Cons of Hiring a Salesperson
- Easy to Waste Money: Many salespeople are good at selling themselves… but not the agency. It’s easy to make a bad hire and keep a poor performer for too long (either because you like them as a person or they’re good at making excuses). Not only are you “out” what you paid them, you lost opportunities to get lucrative clients during this time.
- Expensive: Sales commissions eat up your profit margins. I see commissions as a “cost of doing business” for agencies, but if you don’t have good margins now, you’ll need to raise prices to afford the sales comp plan. And if they don’t perform, you’ve paid for zero performance.
How to Make it Work
If you hire a salesperson, be sure to build a performance plan with them at the beginning. Set goals for what they need to achieve in the first, second, and third months. If they aren’t making good progress in the first few months, they’re unlikely to magically improve in month six.
And be careful during interviews—salespeople tend to be likable, even if they’re incompetent. For instance, a client almost hired a pathological liar as a salesperson—and then she asked me to double-check him before the final stage. Here are my top 15 interview questions for hiring salespeople.
Question: Why do you want to hire a salesperson?