Over the past few weeks I’ve received an uptick in requests for advice on building out a sales team. More startups in the community are finding product / market fit or are past product / market fit and are in the process of building a repeatable customer acquisition machine. One of the first things I recommend is to hire a sales assistant to support one of the founders as he or she learns what works, and doesn’t work, first hand. Once the first 50 customers have been acquired, and things are looking good, it’s time to make that first sales hire.
Here are the top five mistakes entrepreneurs make hiring sales people:
- Culture Fit – Never settle on finding team members that fit the core values and culture of the startup. Too often, startups get desperate to fill a position and start relaxing standards. Don’t do it.
- Lack of a Clear Plan – When a sales person starts it should be crystal clear as to what’s expected of them in terms of role, metrics, and quota. The best sales people are self-motivated and want to know expectations.
- Commission Complexity – Whatever the system for compensation, human nature is to game it and optimize for what’s best personally. As an entrepreneur, the best solution is to keep the commission policy incredibly simple and straightforward. If it can’t fit on one sheet of paper in simple bullet point form, it’s too complicated.
- Cap on Commissions – In the fastest growing startups, the top sales people should make more money than the CEO, and that’s a good thing. Never put a cap on commissions as sales people need to stay focused on what they do best — bringing in revenue.
- Unrealistic Expectations – Top sales people shouldn’t be expected to hunt, farm, support, and exceed quota all at the same time. Sales people should be empowered to do one thing and do it exceptionally well. Limit the number of responsibilities and create realistic expectations.
Building a great sales team is one of the most difficult challenges for an entrepreneur. Moving quickly, having a clear plan, and being very hands-on is one of the best ways to do it. Regardless, don’t make these five common sales hire mistakes.
What else? What are your thoughts on the top five most common sales hire mistakes?
David Cummings on Startups 
I just read a great article from the Harvard Business Review and they conducted a global study of sales rep productivity of 6,000 reps across nearly 100 companies in many industries. They talk about how the relationship builder is no match to the sales person that is a challenger. I have included a link that discusses the difference. Hope this helps. http://www.jasonswenk.com/1/post/2013/10/who-should-you-hire-to-sell-for-your-agency-that-will-rock-it.html
Spot on with your comments.
I would add that the laws of attraction take hold within the culture of sales teams. Leaders with integrity attract sales people that are above board and will not game systems. Leadership that is fair and principled will vet out the sales people that game a system, and sales pros that stand by their reputation will usually nix opportunities to join firms where either the leadership or service/product is questionable.
Couple that synergy with the opportunity to make more then the CEO and you can build a killer team.
Once they are in place you need to manage them correctly. There are 3 management mistakes would be business owners may make when managing thier first sales person
1. Not having defined prospect/ process pipeline you can measure future sales from
2. Not having definitive non monetary measures / metrics you can use to ensure they are building a robust pipeline of future sales vs one hit wonders
3. Holding them accountable through a regular review process. Sales people are great buffers some a regular detailed inspection will minimise any unexpected surprises for the inexperienced in managing sales people
David,
Excellent points on the top 5 mistakes in hiring people……I think there are a few more fundamental issues:
1. Most hiring managers do not have specific criteria they are seeking in a sales professional (i.e. skills, domain experience etc..)
2. Many managers do not know how to uncover thru questioning the true DNA of a sales professional
3. Many make the mistake of believing past performance is repeatable
Keep the notes coming.
Paul
If you have never hired sales people the other thing to know is that many do not work out. Even for large organizations with lots of hiring resources. You have to always be recruiting for sales people. As you move from selling day to day, start interviewing every week or month for sales people. Simple phone interviews can suffice.
Build a “draft board” of potential candidates.
Having never written a sales plan or hired a sales assistant, would you have any advice on where to start?
Another fatal mistake: hiring incredibly talented sales folks with specific competencies, and then expecting them to be “jacks of all trades.” Pressures to grow sales quickly can lead to the o-so-dreadful “let’s change everything every quarter” mentality. Nothing turns off a great salesperson than shifting their focus and expectations in hopes that it will stir-up more closes.
I have learned it is most important to only focus on two competencies when hiring. Anything else is just an added bonus. It is more important to meet the immediate needs of your top two requirements today than waiting six months for a person with every last criteria you are needing on your staff.