How to hire a sales person

http://blog.filepicker.io/post/32008758408/how-to-hire-a-sales-person

by ananddass • 14 years ago

55 29 14 years ago

blog.filepicker.io

uams• 14 years ago

what are the differences between hiring a sales person verus a VP of sales?

lwhalen• 14 years ago

About $60k/yr

ananddass13• 14 years ago

I would imagine that to be a bit more. So, a senior VP of sales at a reasonable company (not necessarily at a HP/Oracle etc.) makes $200K/y easily. If they are high performers then sales bonus and kickers (e.g. if you sell a $x mn. deal you get 1% of the deal value) easily take them into the $250-300K/year range. At some companies good sales guys/gals make more than the CEO itself. At larger companies like HP/Oracle/Salesforce.com etc those salary #'s are anywhere between $500K/year and $1million/yr

ananddass13• 14 years ago

For starters sales reps are individual contributors where are VP of sales tend to be organization builders. They hire sales folks and build a sales organization under them. So you should expect VP of sales to be much more senior and thus cost you more in salary and equity. A good VP of sales tends to get 1 or 2% of equity. That may vary though.

ashleycutler2• 14 years ago

In my opinion, hiring a VP of Sales makes sense if a large sales org is critical to your business success. Think global domination. Some VP of Sales depending on their background are better at 'optimizing' sales processes and personnel rather than experimentation and general hustle.

Once you have some traction and a solid product, a great VP of Sales will help you scale your early success rapidly.

mediaman• 14 years ago

There's a big difference in psychology. Although it's only a rule of thumb, the best VP of sales can be a bit more introverted and detail-oriented than the salespeople they manage, who can be more outgoing, high-perseverence, cold calling types.

VP sales has to manage revenue pipelines, analyze sales reports, detect account losses, manage promotions, get involved in contract negotiations, etc.

Salespeople network, originate leads, cold call companies, build relationships, close deals, etc.

The best salespeople often make terrible VP sales.

ananddass13• 14 years ago

why do best sales people make terrible VP sales? I heard this before but haven't seen a consistent correlation.

adebelov2• 14 years ago

my 2c is that if you hire a stellar VP of Sales, then he can help you hire/train an amazing sales team. So aim high, and poach guys from whichever industry leader there is: Facebook, Google, AdMob (in our case), etc.

thoughts?

ananddass13• 14 years ago

Couldn't agree more. In my experience leading sales teams the difference between one territory rep versus another territory rep is how well that rep was trained/motivated/coached and mentored by his sales manager. Stellar VP of sales are not only good with customers but also exceptional at grooming people. Aiming high and poaching from a Facebook, Google etc. is the right thing to do as these companies have good sales folks. If you are looking at enterprise sales then Oracle and Salesforce.com have stellar people. But I imagine some kind of inflection point in the startup journey where it makes more sense to hire a VP of sales versus a individual contributor sales rep. Any pointers on what that inflection point would be? Funding?

adebelov2• 14 years ago

I think inflection point would be determined by: a. Funding - I mean, you need to pay these guys a bunch. Equity can get you only so far b. Stage - I think hiring a stellar VP of Sales with a half-made product is not going to play out well.

any other ideas?

conrey• 14 years ago

Speaking as a salesperson this article has a few things that I find difficult to agree with:

1) Sales vs BizDev - As described in the article the sales people he's looking for are great for one off transactions, not for building a real client base that will refer and keep coming back. Remember how you like to be sold, for bigger things most people want to know and trust the person they are buying from.

2) Domain Knowledge - which is easy to teach, sales or what you do? Hire a good salesman and teach them your business

The idea is sound and I've seen a number of startups go the wrong way with it, but those two stood out to me.

ananddass13• 14 years ago

Conrey-I agree with your point about things not being black and white between sales vs biz dev . It boils down to how many resources do you have to invest in go-to-market initiatives. For most startups, customers decide to trust and buy based on their interactions with the founding team and the CEO. In fact if the founding team isnt actively involved in the deal closure process that is a red flag. Given this assumption what you need is a person on the team who is obsessively focused in generating prospects. Once a prospect has been engaged then the founding team will have to wing into action in closing the deal.

On domain knowledge-certainly its easy to teach what you do than teach how to sell. Always better to get a strong sales guy than the other way round. In the article I was reference the difference between one with industry knowledge and product knowledge.

ashleycutler2• 14 years ago

I would not recommend hiring a sales person who you cannot trust to close deals or build long standing relationships with customers. I have been the head of sales at Zencoder for almost two years. While there were certainly deals where interaction with the founders was critical to winning the deal because it had strategic impact on the business, they certainly weren't involved with every deal. While the founding team shouldn't be completely disconnected with sales efforts, if the founding team has to win every deal, you haven't hired a very successful sales person and certainly not a partner who can help you strategically grow your business. You have hired a telemarketer (the difference between 'generating leads' and 'winning deals' is crucial here).

Also, I feel like focusing on domain knowledge too narrowly can lead the hiring process astray. I think you are spot on regarding hiring for intelligence and acumen but I think it is a mistake to think that those attributes can only be found in those with domain knowledge. I can tell you that I knew nothing about video encoding before becoming Zencoder's head of sales and had it been a requirement, I wouldn't have been hired. We were able to grow that company rapidly to acquisition with only myself focused on sales.

My opinion is that a good sales hire should be 1. fully committed to learning your product inside and out and have the technical acumen to be able to execute on that. 2. Should think about sales the same way the engineering team think about product (test, iterate, listen,) 3. Should be able to sell themselves they way you want your product to be sold. Listen to how they talk about themselves in the interview. This is how they will sell your product.

powera• 14 years ago

"But unlike a technical interview, give the candidate a few days’ time to come up with a plan. This will involve researching the market, doing some preliminary analysis and would require some back and forth for the candidate to understand how your product would fit with the market." - why would good sales candidates be more likely to want to spend days preparing for an interview than good technical candidates?

ananddass13• 14 years ago

Great question powera. Two reasons

1. This is a self selection hack: The renaissance sales rep will be drawn to the problem and will want the intellectual challenge of thinking through a new problem. The coin operated ones will instinctively get turned off by your request for a plan and will self select out. You anyway don't want to hire one of those.

Also, most sales reps spending their days staring at spreadsheets, CRM systems and drab presentations. This will be a welcome break.

2. Helps them research their probability of success: Good sales reps don't like to lose in the marketplace. These are individuals who are motivated by winning deals. They love the chase.

Preparing a plan helps them evaluate their chances of success.From a career standpoint they wouldn't want to join a company only to be let go after sometime because they couldnt make quota. It reflects really badly in their next interview.

So a smart sales guy would want to research before hand if the market is hot, is the product unique?, who is competition? what are the prospective customers that he has connections with?

He is going to do this irrespective of whether you ask him or not (red flag on his caliber if he doesn't). Why not make it a part of the process?

Btw, judging the specifics of the plan is not as important as judging the process of his planning.

mburshteyn• 14 years ago

But why only sales "guys"?

ananddass13• 14 years ago

Sorry.. I should have clarified. A sales woman shares exactly the same traits. No difference at all. Updated the post to reflect this truth.

Datonomics2• 14 years ago

1. Knowledge: This may be useful if you have a highly technical product but I have always found it easier to teach someone about a product than to teach them how to sell.

2. Skills: a skill that may be more useful than building a plan would be the ability to close. Assign some leads and see if the person can actually close. http://www.youtube.com/watch?v=wVQPY4LlbJ4

3. Accountability: Often the worst part about great salesmen is that they are great salesmen. They will sell themselves and you on doing as little work as possible. A basic CRM to monitor his progress may provide an equal or better ROI than the salesman himself.

4. If you are short on cash, you can build a sales team on commission only. This book has a few ideas on how to set that up: http://www.amazon.com/The-Ultimate-Sales-Machine-Turbocharge...

ananddass13• 14 years ago

Imho accountability through CRM works only for large companies. In early stage startups accountability has to be an intrinsic value in the hire. If the founders have to measure accountability through CRM then they have hired the wrong person.

Datonomics2• 14 years ago

1. I agree, as an organization grows, the value of a CRM increases.

2. I did not mean to imply that a CRM is the only form of accountability, more that in an early stage start up with tech founders, it may be the easiest/most cost effective way to implement a system of organization and accountability. The value of a CRM at any stage cannot be underestimated, not only does it give accountability but it gives instant prioritization so that the sales person's time is maximized and they can reach buyers at the exact moment they are most ready, willing, and able to buy.

3. Many studies have shown that when human performance is measured, productivity increases. In real life, I cannot remember one nationally ranked salesperson that did not have system of organization and accountability. The Hawthorne Effect is probably the most quoted research on this subject, although it may not be the most on-point. "Researchers concluded that the workers worked harder because they thought that they were being monitored individually."

apollo5• 14 years ago

Why do you state this?

From my view, sales is often a numbers game. In order to get x sales, y appointments must be set, z connections made. I am yet to find a good method for measuring this outside a CRM. Excel is good for about 50 contacts.. After that, it's a mess.

mp99e99• 14 years ago

Very nice article, worth reading.

dataisfun• 14 years ago

Good article. But why out of curiosity did you include a road sign for Beer Sheva?

ananddass13• 14 years ago

:-) to represent a Fork in the road!

taariqlewis• 14 years ago

The true test of your VP of Sales should never be: "What do you know of the domain and what do you know of the customer" particularly when we're talking about an early-stage company, still searching for a repeatable sales model. It's my view that best test of the VP Of Sales is the following question: "What do you do when no one is buying our product?"

Sales executives that are trained and deeply experienced in sustaining innovation sales models are great when the repeatable sales model has already been discovered, documented and integrated into the entire organization, including the marketing and product. At this level, the role of the Sales VP is there to "caretake" the sales organization through the maturation stage of growth and dependable business objectives led by the CEO. Their rewards are aligned with the ability to keep the engine humming or fine-tune it for increased sales revolutions.

In a startup, prior to full discovery of the repeatable sales model, one should avoid any sustaining innovation Sales VPs like the plague. One should take a bigger risk on high-energy, untrained sales reps/managers, who are capable of learning disruptive sales models and can be trained (and retrained cheaply) to patiently listen to the customer buying cycle and business circumstance around which a new marketing model must be built. It is my view that most VP of Sales are not trained for disruptive and innovative sales roles because their experiences were anchored around very predictable revenue models.

At the VP of Sales level, there are many ways to vet a candidate and those methods should align with the corporate structure and the corporate culture. However, let’s be clear. The first VP of Sales or VP of Marketing are high-risk hires who the CEO should be prepared to replace as quickly as possible as the product market fit process, customer segments, and customer buyer-cycle and buyer-profiles continue to change and settle.

Don’t get obsessed over your first VP of Sales as “The One”

Obsess that you have athletes that are capable of running a hard sales race and that your organization is nimble enough to adapt and change, as needed to survive the sales discovery process!

How to hire a sales person

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