Industry experience looks good on paper. But too much of a good thing could be problematic.
It’s safe to say nearly every sales manager has regretted at least one of his or her new hires. Resumes, interviews and even references can sometimes conceal the truth that the only thing a salesperson knows how to sell is themself.
While there are many mistakes that can be made in the hiring process, it’s our opinion the biggest mistake is exclusively hiring people from within your industry.
Retreads and tenderfoots
It makes sense that a manager would want to hire someone with industry experience, familiarity with their customers and maybe even an existing book of a competitor’s business that could be tapped into.
But be warned: Tenured salespeople from your industry are likely interviewing with you because they’re burned out at their existing company, and wrongly assume they can escape their frustrations by joining your team. It is more likely that in time you will discover their problems have followed them, or they find new ones to complain about.
Direct industry experience is not always the key to finding good salespeople.
Hiring managers should also be cautious of salespeople who are changing jobs with too little experience in an industry, as it may indicate they haven’t yet proven their ability — or desire —to succeed long-term.
Who to hire
Managers should instead look to hire from an aligned industry.
An aligned industry would be one that sells products or services your customer buys that are manufactured or delivered in a similar fashion to yours. If you sell garage doors, then the window industry is aligned. If you sell network management services, then the security/alarm systems industry would be aligned.
Your distributors are another source of potential new hires worth remembering. Your distributors may not exclusively sell to your industry, but they definitely know it, and that’s key.
The objective is to find people who have dealt with your customers or your kind of decision makers before, and will see their new role as an advancement in their career that moves them forward, not a lateral move.
Another important consideration is the environment a salesperson is coming from.
Hiring a top performer away from a competitor may sound enticing. But that person might not be able to handle the job you need them to do.
A salesperson who works for a well-known industry player with a large market share will rely more heavily on their company’s reputation and brand to close sales. That same high performer may struggle at a smaller company where brand recognition is weaker, and stronger selling skills are needed to demonstrate value.
In a similar vein, if a salesperson is coming to you with more of an account management background, they may have a hard time transitioning back into the daily grind of opening new accounts — even if they were the one who acquired all those accounts years ago.
The cost of a bad hire
There’s plenty of data to support the claim that a bad hire costs a company more than just that person’s salary. Bad hires have the ability to demotivate entire sales teams, making lost revenue hard to quantify. We’ve seen estimates ranging from 25% all the way to 125 times the bad hire’s base salary.
In short: waiting to find the right salesperson is better than making a rushed decision and hiring the wrong one.
The wrong salesperson is usually hired when a manager has the “anybody is better than nobody” mindset. This thinking however, elevates a short-term staffing problem over the long-term strategic goals.
No hire is certainly better than the wrong hire, when the wrong hire could soil your reputation, and lose business today that the right person could win tomorrow.
Working with a bad hire
Given the current issues with staffing and turnover, sometimes you’ve got to work with what you’ve got.
If that’s the position you find yourself in, be sure to establish really clear metrics. Proper management and coaching might be just what a struggling salesperson needs to turn things around.
Also, remember most companies tend to hire too quickly, and fire too slowly. When you see an issue you’ve tried to fix and you can’t, it might be time to make a change.
The Hiring Manager’s Secret Weapon
As we’ve seen, hiring is hard when a person is good at selling themself, and the hiring process relies solely on resumes, references, interviews and gut instincts.
That makes it critical to understand behavior and motivation of a potential hire, so they can be coached and incentivized properly. Believe it or not, salespeople aren’t all motivated by money, meaning sales contests, spiffs, and bonuses won’t always inspire everyone to take action. Don’t leave your hiring decisions up to chance. Take a scientific approach to talent management with a system that’s proven to help you find, hire and keep the best people for your organization.