Seeking to grow her agency, an Executive Coaching client asked me: “When is it time to hire a salesperson to bring in new clients?”
Sales hiring rarely goes smoothly at agencies. In my work as an agency consultant, I keep hearing a version of this: “I hired a salesperson to grow my agency. They aren’t getting results. Is it time to fire them?”
There are lots of bad salespeople out there. But part of this is your own fault—if you hire too soon, hire the wrong salesperson, and/or manage them poorly. Fortunately, that means you can also prevent and fix the problem.
16 Signs it’s too Early to Hire a Salesperson at Your Agency
Before you hire a salesperson, consider these 16 “warning sign” questions.
- Are you expecting a “unicorn” salesperson? Even the best salesperson won’t “save” your agency, or double your revenues overnight. That’s too much pressure on one person—salespeople are humans, not a superheroes. And if you’re trying to do this on the cheap… a unicorn definitely won’t be $50,000 a year or commission-only.
- Do you have enough inbound leads to justify hiring a salesperson? Salespeople can and should prospect, but they’re an expensive form of raw lead-gen. Be sure your agency is investing enough in marketing first, via the right self-marketing priorities.
- Does your agency have clear, compelling positioning? If your value proposition or target market are fuzzy, you’re expecting your salesperson to sell a moving target. That’s not uncommon… but it’s also unfair, and a waste of everyone’s time.
- Are you hiring for the right sales skillset and experience? Consider the complexity of your agency’s sales process. If you’re selling custom services, you need a consultative salesperson who understands how to match what you’re selling to the problems your clients are trying to solve. In contrast—if you’re selling productized services, a consultative salesperson is probably too expensive. Prior agency experience isn’t strictly required… but it certainly makes things easier. If a salesperson hasn’t sold agency services—or services in general—they’re likely to struggle, or at least take longer to get up to speed.
- Are you delegating business development… or abdicating as a leader? If you personally hate doing sales as an agency owner or leader, I understand your wanting to get business development off your plate. But you still need to be managing and supporting the salesperson. If you expect them to figure it all out on their own, that rarely goes well. Hiring a salesperson does not mean you never do sales again as the owner.
- Have you defined a clear sales process? A good salesperson will help you improve your agency’s sales process. But if you’re asking them to create your sales process from the ground up, don’t be surprised if it takes them a long time to figure things out. Why? Because you’re expecting them to simultaneously build and run the system.
- Are you investing enough to hire a quality salesperson? Agencies should plan to invest 5-20% of revenue into sales. Good salespeople expect OTE (on-track earnings) of at least $100,000 annually, and many want $200,000 or more. And that doesn’t include spending additional money to support their sales efforts. Speaking of that…
- Are you giving the salesperson enough support? It’s unfair to expect a salesperson to generate 100% of their own leads. Do you have subscriptions to sales support tools to help their outreach and qualification process? Does your CRM help your salesperson, or make their life harder? Are you investing in paid activities (e.g., sponsorships and paid lead-gen) and organic activities (e.g., blogging and events) to give them leads to “work”? Do you have a detail-oriented “sales support” person (whether full-time or part-time) helping the salesperson manage follow-ups and reporting?
- Are you willing to be skeptical in the hiring process? If a salesperson is good at “selling themself” to you, that doesn’t automatically mean they’ll be good at selling your agency’s services. You need to be willing to dig into their sales experience and approach during the hiring process, instead of avoiding the topic because you dislike sales. This includes asking the right sales interview questions, being a skeptical reference-checker, and digging deeper into the candidate’s stories and examples. For instance, their team’s quota was $X… but what was their personal quota? How many quarters did they reach or exceed the quota? If they missed the quota… what happened? Keep probing.
- Are you holding the salesperson accountable? This includes creating a new-hire ramp-up plan, holding weekly sales management meetings, and firing them if they aren’t making appropriate ramp-up progress (including quota attainment). The exact timing depends on what they’re selling—it’s easier to sell low-end productized services to small businesses, versus high-end custom services to enterprise clients. But over and over again, I see agencies keeping salespeople longer than necessary.
- Are you willing to fire them if they don’t work out? This includes giving them enough time to ramp-up… but not too much. This also includes firing someone who produces results but who creates problems with the team, or who practices unethical behavior. When it comes to running your agency, the ends do not justify the means.
- Are you clear on the incentive structure to drive the results you want? As investor Charlie Munger says: “Show me the incentive and I will show you the outcome.” If you want someone focused on finding new business, a combo of base and commission makes sense. If you have lower growth goals and prefer to focus on client retention, a higher base—or even zero commission altogether—may make sense. In contrast, commission-only salespeople rarely work out. And when agencies report that salespeople aren’t cooperating with each other, it’s usually because each salesperson has individual-only incentives that discourage cooperation… so of course they’re not cooperating.
- Have you defined the right sales quota and “comp plan”? If their quota is too low, you’ll spend a lot of money for minimal return. If the quota is too high, you’ll struggle to retain salespeople. If this is your first sales hire (besides yourself), you’ll have to learn what’s realistic. You’ll also want to project-out what their “comp plan” looks like in different scenarios, so you’re not surprised later.
- Can you fulfill 100% of the work if they hit their quota? You shouldn’t pay-out 100% of sales commissions up front—instead, pay them over time as the client pays your agency. Yet this sometimes creates a delivery gap—if your salesperson hits their quota but your agency isn’t staffed to actually deliver the work on time, you’re penalizing the salesperson (financially) for something that’s not their fault. Don’t be surprised if they quit on you.
- Do you actually need to hire someone right now? Sometimes my coaching clients ask whether to hire a salesperson who cold-pitched them, or to hire someone from their network who’s looking for a new job. That’s not automatically a bad idea, but be careful. Hire a salesperson because you need their help, not because someone happens to be looking.
- Have you decided whether you need a “full-stack” salesperson or multiple “unbundled” specialists? In my experience, sales includes several components: Prospecting, Qualifying, Consulting, Scoping, Proposing, Closing, Onboarding, Supporting, and Managing. Most people don’t have all of those skills… or they’re expensive… or so-so at each one. Consider “unbundling” the components of sales to either hire multiple people, or to hire one new salesperson who’s supported by existing team members (e.g., for your PMs to take the lead on Scoping and your AMs to take the lead on Onboarding). I’ll dig into this further in a future article; subscribe to my email newsletter to hear when it goes live.
Applying this at your agency
If you’re about to post a sales job—or give an offer to a finalist sales candidate—be sure to consider the “warning signs” questions above.
If you see warning signs, pause the sales hiring process ’til you identify what to do next. Otherwise you risk paying six figures to someone who doesn’t produce results, or who isn’t the person you need right now. If you’d like my advice about your agency’s specific situation, I can help you via a Bite-Size consulting call.
Question: How are you approaching hiring a salesperson at your agency?
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