Recruit and manage salespeople

If you run a small business it's likely that one of the many hats that you wear is that of the salesperson - after all, it's very difficult to start a business without some ability to sell to people.

If you need to bring in specialist salespeople, it can be difficult to judge when to do this and how to recruit the right people for your business. If you already have a sales team, it's important to know how to motivate them and measure their performance.

This guide explains where to start the search for a salesperson, outlines the importance of the recruitment interview and explains how to set up a payment structure to encourage high sales.

Manage your sales team

Regardless of the size of your sales team, it's important that it is managed properly and given direction to allow each salesperson to fulfil their potential.

Begin with the basics and develop a sales strategy that everyone is aware of. This should make clear what your objectives are. For example, is the priority to target new or existing businesses? Which products or services are you most keen to promote?

Your staff should be clear on what their roles are within the sales team. It's usual to allocate responsibility so that one member of staff looks after a particular account, product or territory. This allows customers to build a relationship with a particular account manager.

Use data such as sales-activity reports to keep track of how well your sales staff are performing and combine these with reviews where you can discuss results face-to-face. This will give you the chance to address any problems or issues.

Feedback from your sales staff can be very valuable in shaping business direction because of the close contact they have with customers. Of all the staff within your business they are likely to have the best idea of what it is that your customers want.

When do I need to hire a salesperson?

There is no pre-defined time at which a business should hire a salesperson. Every business has its own requirements, which can be affected by seasonal patterns, as well as the ups and downs of the economy. However, there are certain triggers you might have noticed in your day-to-day business dealings, which could indicate that you'd benefit from recruiting a salesperson:

Whatever the reason, once you consider hiring a salesperson there's one important question you should ask yourself - will I be able to deal with an increased level of sales? It's an essential factor to consider. There is no point paying someone to bring in new customers if you don't have the resources to meet the demand.

Start the search for new salespeople

Before you begin to look for sales staff you should develop an idea of exactly what skills, experience or training are necessary. Will they need prior knowledge of a particular market? Or the ability to use a certain piece of equipment or software? Is it preferable for candidates to show a strong sales record, regardless of their industry background? Write down these requirements to help put together a job specification.

Once you've got an idea of the sort of person you need, decide which recruitment method is most likely to be successful.

There are four main options for recruiting:

What to look for in a sales recruitment interview

Interviewing sales staff is an excellent opportunity to see how good they are at selling. If they are unable to sell their own abilities to you, then it's unlikely they'll be able to sell your goods or services confidently to your customers.

When considering the personal qualities that make a good salesperson, you should look for:

Ask about the candidate's past achievements. How many sales have they made for a previous employer? How did they help develop the business? How did they target potential customers and win sales from them? To guard against exaggeration, ask whom you can contact to confirm their claims.

The image your candidates convey is very important. Ask yourself whether you - and your customers - would be comfortable with this person as the public face of your business. Are they appropriately dressed? Do they listen well and speak articulately? Do they ask intelligent questions about your business? Make sure you are aware of the law on discrimination.

Remember that different sales techniques can be appropriate in different businesses. You need to hire a person with the specific sales skills you require. For instance, a rapid-sales technique may be ideal for high-volume cold-calling but not if you're selling a complex and high-value product or service requiring significant account management.

The induction process for new salespeople

New salespeople will need to familiarise themselves with your business - its products, its employees and its customers. You should plan an induction process that can also be used for any sales staff you recruit in the future.

Your induction process should cover the following:

Some salespeople will need a longer induction process than others. If a recruit is new to your business sector, they'll need more coaching than someone who has worked in your industry for several years.

It may be that some training is necessary - something that isn't just restricted to new sales recruits.

Consider accompanying a new salesperson on their first few visits to current or prospective customers so that you can make introductions and observe how well they are settling in.

Set sales targets for your salespeople

You need to set clear targets for your salespeople, linked to incentives such as commissions and bonuses - this motivates them and provides a clear indication of the kind of performance expected of them.

This process is crucial to the success of your business and needs to be closely tied in with the rest of your business strategy and planning. For further information about planning your sales, see our guide on how to forecast and plan your sales.

Be specific when setting targets for sales staff - break your requirements down into different areas, for example:

Look at your business and identify the factors driving its profitability - you should use these to drive your sales targets too. Different businesses may require very different targets. For instance, winning 200 new customers in a year might be a poor performance for a supplier of low-margin foodstuffs, whereas recruiting just two new customers might be a very good performance for a manufacturer of luxury yachts.

Make sure that the targets you set for your new sales staff are reasonable for the territory they've been allocated. Making things too easy may lead to complacency and lost sales, while making them too difficult can be demotivating and lead to despondency.

Set activity targets for your salespeople

As well as setting your salespeople targets for the number of sales you want them to make, you should set them activity targets. These are all the individual aspects of their day-to-day duties that your sales team will carry out as part of their jobs - and which should lead to sales. The theory is that if enough of these activities are carried out, they will significantly improve the likelihood that sales are made.

Activity targets might be:

This is an important area of the sales process, as continual efforts by your staff to generate new business leads may be responsible for keeping sales figures steady or on the increase. You may therefore wish to monitor this area of their work just as closely as the actual sales figures.

Measure the performance of your salespeople

You recruit salespeople because you want them to make a difference to your business sales. So how do you measure just how well they're doing?

One method is to analyse a salesperson's conversion rates. This is the number of visits, contacts or phone calls it takes to arrive at one sale to a customer. If, for instance, you calculate that it should take a salesperson 25 approaches per sale you have a good basis on which to gauge their progress. Likewise, if you employ several sales staff you can assess which of them is performing most effectively.

If you establish that sales targets are being missed you should investigate the reasons. One possible cause might be a lack of effectiveness on the part of the salesperson. However, it might just as easily be caused by one or more of these factors:

Whatever proves to be the source of the problem, act quickly to remedy it - and, where appropriate, let your sales staff know that their sales abilities are not the issue.

From time to time, find out what impressions your salespeople are making. You could try conducting a survey of opinions across the customer base, or on a smaller scale calling individual customers to listen to what they have to say. You might also try accompanying salespeople on their site visits to see for yourself how well they're connecting with customers.

The right pay package for your salespeople

If you're taking on salespeople for the first time it can be hard to know what pay package you should offer. Not surprisingly for such a target-driven role, pay packages tend to be based on results and usually include lots of incentives. It's important that you spend time at the outset deciding on the right combination of basic pay and incentives since this will be much easier than changing the formula at a later date.

The typical pay structure for a salesperson is composed of a fairly low basic salary with an additional amount of commission. The package will usually be called OTE or on-target earnings, meaning that if a salesperson hits the targets that you've specified for them, they will be guaranteed that amount of money. A higher commission can be paid if the person performs beyond this target. Such incentives naturally help to instil a desire for sales.

You can customise pay incentives to your business' benefit. For example, if the company's future is heavily dependent on the success of a new product, you might want to offer a higher level of commission for sales of that product. Linking sales with commission in such a way can therefore assist success.

Make sure that sales staff are clear from the outset exactly what financial rewards they'll receive for successful sales. This will avoid any future difficulty and mean that staff focus their energies on the right targets.

Finally, remember to think about incentives other than pay and bonuses as these can be more effective. Securing an order provides its own sense of achievement for salespeople, but when orders are not so easy to secure you need to think of incentives to motivate your staff.

Original document, Recruit and manage sales staff, © Crown copyright 2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Québec by Info entrepreneurs

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