5 Steps to Setup Your Sales Hire for Success
Whether you’re hiring sales representatives for the first time, or adding to your team, there are steps to take throughout the process to make sure it’s a success. As Managed Service Providers (MSPs) grow their business, it’s important for your sales hire to be motivated, goal-oriented, and prepared. Follow these five steps to streamline hiring and attract capable reps, while reducing the chance of turnover.
1. Determine your goals
Before you even create the role, you need to set business growth goals and new sales hire goals. It can be tempting to overlook the accuracy needed in this first step, but there’s tremendous value in proactively strategizing the future. What are you capable of from a growth standpoint? Rather than tossing out numbers based on anecdotal ‘evidence’, set realistic and attainable goals – plus stretch goals to keep striving.
Sit down with your business metrics to identify where you are, how you got there, and how you’re going to reach new goals. What obstacles did you overcome, and what might lie ahead? Some points of intervention to consider include…
- Team capacity – Is it the right time to expand?
- Org structure – Who should be in what roles for maximum impact based on product knowledge, experience, and personality?
- Churn rate – If sales close, but clients don’t stay, what does that say about your product, service, support, and overall experience?
- Event impact – What’s necessary to make events ‘worth it’ between costs and expected returns?
- Market trends – Are you focused on an underserved, or saturated market?
- Industry happenings – Has a competitor left your market recently? Or opened the door for you to serve a niche market?
- Referrals – If you’ve relied heavily on referrals in the past, can you continue expecting that lead flow? Or do you need to account for the pool running dry?
- Cross sell and/or upsell opportunities – Can existing clients benefit from additional products and services?
Leverage MSP peer groups to see how similarly structured businesses have accomplished the growth you expect. Learn from their missteps and discuss the best ways to set goals based on the factors above. One of the nice things about the MSP community, is most are willing to share their secret sauce. With your growth goals defined alongside strategy, and some MSP insights, you have a good idea of what you need from your rep.
2. Define your ideal customer profile
Basically, your ideal customer profile (ICP) is who you’re targeting, and in what market. Understanding your audience persona prior to hiring lets you specify the experience necessary to confidently enter those markets. Because these are the people your sales team will focus on, you want them to have as much information as possible. Including, but not limited to…
- Size – Determined by number of employees or yearly profit.
- Region – Typically within a certain distance from the MSP, or area of the state(s).
- Vertical – Specific to a certain industry, product or service, trade, or profession.
- Persona – Who reps will most likely interact with – job title and role, motivation, pain points, product features and benefits specific, to that person.
With demographics and desires established, how will your sales hire get in contact with your ICP? Lead generation and pipeline mechanics require a strategy to keep new sales opportunities coming in. Initiated by either the sales rep, or provided by the MSP, set expectations during the interview. If it’s up to the sales rep to approach cold leads or generate new leads, they need to have more experience with your ICP. Industry specifics and product details can be learned, but having a history in the same or similar industry or vertical, is valuable in forming relationships with current and potential clients.
3. Measuring success
How do you know if your sales hire is doing well, or needs improvement? Key performance indicators (KPIs), data, and tool sets can be used to gather insights into performance. Standard KPIs include:
- Number of outgoing calls
- Number of meetings booked
- Number of closed sales
- Time and number of contact points from initial call to close
Have an idea of how many touches your sales rep should have before closing the sale or moving on. Tenacity and persistence are necessary traits for sales, but there comes a point when time and effort begin to outweigh return. Establish these benchmarks and expectations against your measurements of success make sure they coordinate.
Failing fast is necessary for agility, but you also want to provide enough time and resources for your rep to build the territory, develop the pipeline, get to know prospects, and become familiar with existing clients. These introductory tasks might take five to six months, so you can expect some results after that. Of course, it depends on your vertical and industry. A dental office, for example, is going to move slower through the pipeline than a manufacturer, who need quick fixes now to keep business running.
4. Align compensation
It’s important to motivate your sales team by motivating individual reps. Total compensation, including base salary and commission, should align with reachable goals. Commission is based on your rep’s ability to meet those success measurements. Additionally, if it’s possible, incentivize your sales rep. Money is obviously the best incentive and motivator, so if you can cut your reps in on the profits, that creates a direct tie from their effort to their bank account.
Incentives look different across MSPs. It could be a limited scope incentive, where reps are paid after six or 12 months from the close date – as way of keeping reps engaged with new clients. You could implement clawbacks where the commission payment has to be returned if the client leaves within one year of signing. A basic compensation plan built on activities is: if rep makes X calls, that generate X meetings, and X deals close, then the rep gets X percentage of the deal. Whatever your incentive structure, it needs to encourage the behavior you want to see from reps.
Of course, your MSP has to be profitable enough to handle whatever compensation plan you offer. Do the math to determine the cost/benefit analysis of your sales reps. What’s the average customer deal? How many new customers do you need to add each month? And/or how many existing customers need to add X amount of services. A good sales person figures out how to beat the comp plan. They think, “what do I have to do to make sure this works in my favor?” Lucky for businesses, the answer is typically, sell more.
Once you’ve figured out your what (goals), who (ICP), and why (compensation), it’s time to answer ‘how.’ A sales playbook and/or training set should be created to onboard new employees, highlight brand identity, provide resources for outreach, and so on. How do you want your reps to sell? What do they need to know from prospecting to closing?
This includes sales resources and marketing strategies. Sales people need specific assets, like one-pagers, email campaigns, free assets, invites to demos, trials, and events, and talk tracks, in order to keep their conversations going. If you’re a home-grown MSP and much of this type of information lives in the head of the owner, who has always been the sales rep, it’s time for it to come out. Without these things, your sales reps will certainly not be able to reach the established goals, and you’ll have to deal with the mess of high turnover and low sales.
Want more on MSP marketing strategies?
Be sure to follow Axcient on Facebook, Twitter, and LinkedIn for invites to upcoming events, blogs, downloadable assets, and more. Visit the Resources section to peruse our library, schedule a product demo, or start your free 14-day Axcient trial, today!
About the Author:
Liz Mellem // Technical Copywriter, Axcient
Liz Mellem has been a freelance copywriter for over three years in the technology, education, and alternative medicine industries. She produces content, sales collateral, and email marketing campaigns that contribute to digital marketing strategies for sales growth and brand awareness. In her free time, Liz enjoys reading, exploring Austin, and Netflix with her cat, Harlem.