In my travels working with tech firms for the past 20 years, one thing I’ve learned is that bad sales hires are expensive. If a pattern of bad hires develops, the impact can be devastating. Ultimately, investing in excellent hiring practices and external support is far less costly than making bad hires.
Typically, a good sales hire for tech services or software will produce between $1.5 and $3 million in top-line revenue annually. That same salesperson will generally stay with the company for 5-7 years, sometimes longer. Pretty good numbers, right? The average gross margins in the industry are 25%-50%. That means that over a period of 5 years, one successful salesperson can result in a staggering $7.5 million in profit.
Conversely, an unsuccessful salesperson may convince you to hold on while they build a base and mature leads for 9 to 16 months. Depending on pipeline activity and your industry’s business cycle, you may feel that is necessary. Unfortunately, most of us try too hard to see positive qualities and hold on to optimism too long. With guidance from an experienced sales leader, you can set realistic and meaningful KPI’s. Doing so will save you from investing in a lost cause.
It’s a competitive market for talented sales professionals, and as a small business in the tech sector, the odds aren’t always stacked in your favor. Here are a couple of tips for improving your candidate quality.
Two quick tips to help you make better sales hires:
- Go outside your company to evaluate candidates, especially finalists. There are plenty of experienced sales leaders who can improve your hiring.
- Perform back-door reference checks. References that candidates provide you are usually big fans of the candidate. All too often, there are personal connections that prevent you from getting an honest depiction of the candidate’s real abilities.
Contact us today to help you build a successful sales team.
President and founder of Sales Oxygen – Breathing life into your business