In this article, we will walk through some simple examples with some basic numbers to better understand what your B2B Sales Compensation plan could look like. RevenueHire will help you and your sales managers create a customized compensation plan based on their organization revenue goals, but the compensation ideas outlined in this article provide a great starting point for how to structure a compensation plan. We will cover the ratio of base pay to commission, a real world example for a particular open sales req, plus creative ways to offer bonus compensation on top of the base salary and commission.
Here are five common mishires anyone who has been a part of a B2B sales team should be able to readily recognize. Every sales hiring manager has had to deal with a scenario where she or he was expecting to land a top performer, and instead ended up with one of these individuals. Most of these individuals, with the probable exception of Sales Type #5, are wonderful people who in all likelihood make great team members at happy hour, but almost never become top sales performers.
1. The Relationship Salesperson Who Can’t Close.
This individual is excellent at building what at a glance appears to be an impressive pipeline, and may offer to bring in an entire database of contacts from previous organizations. He or she loves schmoozing at tradeshows and initially impresses you with the number of appointments she or he can set and how long those appointments last…but the opportunities are always set a few months out to close, and his or her prospects are always coming up with reasons for why they aren’t quite ready to buy.
Steps 2-4 in the Revenue Hire 7 Step Hiring Method will help you avoid hiring this “Mis-hire” Sales Type. Step 2, The High-Tech Candidate Assessment, will evaluate data about the candidate’s previous organizations as well as the candidate’s LinkedIn information and the candidate’s professional online footprint. Revenue Hire also uses deep assessment questions to assess the candidate’s strengths and weaknesses that would be indicative of her or his ability to be a strong closer. Any red flags that would indicate that the candidate may potentially be inflating numbers or past influence on the success of previous employers will be noted.
Steps 3 and 4, The Role-Specific Interview and Sales Simulation, will include a series of behavioral interviewing questions to assess the depth of the candidate’s ability to negotiate effectively, as well as reveal the candidate’s propensity to gloss over details or pivot to different subjects when fielding particularly tough questions.
2. The Seasoned Rep Who Had an Eight-Figure Deal Once Upon a Time.
This individual brings a wealth of selling expertise and practical tips to your team, but hasn’t closed a deal in a long time. He or she might often be a Lone Wolf, unwilling or unable to provide detailed notes of his or her appointments in your CRM, if this person is even getting appointments at all. The Eight-Figure Deal she or he had was with a well-known technology company, and the prospect of landing just one of these kinds of deals in the next year was enough to convince you to hire him or her. But, this person simply is not a team player, and seems unwilling to do much hunting of her or his own.
Steps 4 and 6 are important for recognizing this potential mis-hire. By injecting sales role-playing scenarios into the interviewing process, Revenue Hire is able to easily spot situations where The Seasoned Rep/Lone Wolf is incapable of adapting to new environments, learning about new technologies, and playing well with cultures whose success is dependent upon team players. When Revenue Hire interviews a candidate, it drills into what the story is behind the numbers–if the numbers don’t add up after extensive review, then the big deal closed at a big company was probably too good to be true.
3. The Rep Who Only Farms.
Speaking of not doing much hunting…we’ve all encountered the rep who worked for an impressive organization and helped win new business for that organization on a regular basis, but it turns out that he or she has never hunted for new logos a day in his or her life. This rep has only provisioned orders from existing clients, and pushed well-oiled buttons to insure that that the new business came in. This Rep may have very impressive communication skills from talking to big-name clients on a regular basis, but will soon be getting shown up by your entry-level BDRs as they become more adept at getting and setting appointments and assisting with working leads to close.
Revenue Hire will initially drill into a prospective rep’s hunting acumen during Step 2 of its 7-Step Method. If minimum criteria for assessing the rep’s ability to prospect is met, then we go into more detail in Step 3, where a Role-Specific Interview can paint a detailed picture of the rep’s skill set. Also, we make clear from the start of the interviewing process how much prospecting will be required for the role, so that no candidate will find this surprising later in the interviewing process.
4. The Internal Referral You Couldn’t Refuse.
This mis-hire is someone’s cousin, brother, nephew, etc. who sold magazine subscriptions or used cars, and is a quick learner. Of course, there are always hidden gems who have just been waiting for the right opportunity to shine, but if you are looking for a top-revenue performer out of the gate, are you willing to take a chance on this kind of person?
It should be obvious that by engaging Revenue Hire to find your next top sales performer, you are already making the right choice to stay away from the family/friend sales referral. If you absolutely feel like you must give your boss’s nephew a shot, then why not send him our way and let us put him through the paces of our 7 Step Method so that you can have an accurate and objective comparison of The Internal Referral against a true top sales performer?
5. The Jekyll and Hyde Rep.
Within the first three months of hire, this individual will become an angry, negative, energy vampire with your team, but smiling, personable, and likable with prospects (until a prospect “crosses” him or her). This individual was highly likable during the recruitment/interviewing phase, and cracked jokes with everyone, but a lack of a thorough recruitment methodology failed to uncover this person’s dark side. A well crafted behavioral interviewing method that has been purpose-built for B2B salespeople would have uncovered potential red flags that would have made you think twice before hiring him or her.
Step 2 of the Revenue Hire 7-Step Method will give us almost complete confidence that no Jekyll and Hyde Reps are going to get through to the final stages of the hiring process. We apply pressure on the candidate that simulates the kinds of pressure a rep will be under to meet quotas and negotiate deals to close to quickly get an idea in the first couple of minutes of this step for how the candidate will react. If she or he can’t build rapport with a stranger who is asking him or her questions they didn’t prepare for, ie, non-standard phone screen questions, we will see how the candidate responds when the candidate has to think on his or her feet. Steps 3 and 4 of the hiring method will turn up the requirement to perform well under pressure even further. Revenue Hire has had its share of candidates getting up and leaving, handing up and sending them hate mail later. Revenue Hire meets the Hyde of the Jekyll and Hyde rep so you and your team don’t have to! This additional, sales-specific interviewing methodology saves our clients the headache of dealing with those energy vampires when monthly quotas are on the line.
However, we all know that there are incredibly charming people who can fake their way through just about any simulated vetting process. Step 7, the cultural interview, makes it that much harder for the unwanted sociopath to convince all hiring stakeholders that he or she is exactly what your team was looking for.
Based on the hiring manager’s requirements, Revenue Hire can partner with client companies to conduct Cultural Interviews for a specific role, so that all hiring stakeholders who have been very close to the candidate during the hiring process are given a chance to take a step back and let a third party, highly-objective point-of-view scrutinize the candidate to ensure that he or she is the right fit for your company culture.
Finally, we should reiterate that Revenue Hire’s 7-Step Method has proven to yield the right fit for a sales team over 90% of the time. If, for whatever reason, you do discover that Revenue Hire has helped place a candidate that wasn’t the right fit for your sales team, Revenue Hire guarantees its carefully recruited sales talent, so if your new employee doesn’t work out within the first 3 months, we will provide a new candidate or issue a credit toward future hires.
Sales hiring managers are often too busy to headhunt their own talent, though they may be best equipped experientially and intuitively to recognize top performers, and many have deep networks of reliable connections that they can leverage.
What’s more, sales hiring managers often have their own quotas to reach in addition to managing their sales teams.
Relying on internal recruiters often proves to be less-than-optimal, because internal recruiters themselves don’t have time to “dig in” past the initial years of experience and sales numbers provided on a resume. Internal recruiters essentially rely on the information a candidate provides on a Resume, CV or LinkedIn profile, and perform a basic 15-30 minute phone screen to confirm that the candidate is correctly representing herself or himself, and is still actively seeking the opportunity.
Large external recruiting firms that claim to have a sales hiring focus often source and recruit salespeople across the entire experiential spectrum, from entry-level BDRs to seasoned account executives. Recruiters at these firms are given req quotas of their own to fill–and so it becomes a matter of quantity over quality that drives how they will recruit for you.
It is commonly understood that 20% of the sales team drives 80% of the revenue. With the above hiring methods, you are essentially playing a numbers game–you continually recruit and churn sales reps until you are fortunate enough to land a top performer (who stays with your organization long enough to help you realize real revenue gains).
A better and more cost effective approach would be to leverage a sales recruiting firm that has a singular focus and methodology in place for getting the right top-performing rep for your team the first time. Here’s how Revenue Hire can make this happen…
In a preliminary meeting, Revenue Hire will have a conversation with the hiring manager to ensure they have the right information to develop the right profile. The profile will be based on the hiring manager’s revenue goals, primary roles and responsibilities of the sales person, the selling environment, sales cycle and deal size. At this time, Revenue Hire will also discuss the compensation component as well and help the hiring manager develop it if they are still working to finalize it.
First, Revenue Hire creates highly customized, role-specific employment ads for your open sales position. Next, Revenue hire leverages industry-leading technology to source, screen, and assesses each candidate, creating a detailed picture of sales aptitude and company fit.
The next two steps are key differentiators in how Revenue Hire delivers sales hiring managers top performing talent. Revenue Hire doesn’t depend on the sales hiring manager and her team to evaluate candidates in-person, which inevitably means that the sales team is pulled away from valuable time that could be spent setting appointments and closing deals. Revenue Hire conducts rigorous personal interviews with each candidate, analyzing professionalism, honesty, people skills, and a range of considerations unique to each role.
The Sales-Simulation Evaluation is a real game-changer in terms of ensuring that a candidate is qualified to sell to your vertical market, and capable of handling himself or herself in real-world selling situations. Every salesperson has participated in sales role-playing exercises, and most sales managers will admit that they would like to spend more time sharpening their sales team members’ skills and honing their messaging by conducting role-playing exercises. However, how many salespeople are required to participate in role-playing exercises, PRIOR to joining the team? Most professionals have participated in informal “lunch interviews” that are designed for the hiring manager to see how their candidate behaves when her or his guard is down, but this kind of interviewing technique doesn’t deliver the same type of confidence in the candidate’s ability to perform as a hunter, relationship-builder, negotiator and closer. Industry-specific, improvisational role-playing exercises give the hiring manager complete confidence that the candidate will be a top performer when selling to the required vertical market.
After this step, hiring managers are presented with 2-3 well-qualified candidates who are best suited to the role, with detailed assessment information about these candidates. Then, cultural interviews are conducted to determine which of the qualifying candidates has best personality fit for your unique corporate environment. While cultural fit has fallen out of favor to some degree in recent years, Revenue Hire, like most recruitment professionals and hiring managers, know that when cultural fit interviewing is done well, it makes all the difference in ensuring that a candidate will fit in well with a particular organization’s culture. When cultural fit recruitment is done poorly, it can often eliminate outstanding candidates who are capable of acting as challengers who can help reshape the status quo when the status quo is preventing teams from realizing their potential. More negatively, bad cultural fit interviewing and recruitment can begin to look like discrimination. Revenue Hire recognizes these pitfalls and works closely with hiring managers to make sure that cultural fit means the final candidate will be motivated to sell as a top performer at the hiring manager’s organization for some time to come. This guarantees stable revenue forecasting and eliminates high employee churn rates.
The final step in the process consists of a detailed presentation by Revenue Hire to management on details of new hire’s strengths, experiences, and areas of potential struggle, supporting a seamless transition into training and sales success.
To sum it up, Revenue Hire has systematized the best practices of sales recruitment, while including in each step of the process recruitment and assessment techniques that are role-specific, culture-specific and industry-specific to the hiring manager’s open req. Ultimately, this speeds up time-to-hire, because the hiring manager is spending less time on re-hiring salespeople who prove to be either underperformers or poor fits and high churn rates are eliminated. As a sales manager, you get your time back–you are not spending all of your time assessing new candidates to replace churned employees, and onboarding ones who were ill-equipped for the role.
If you are a sales hiring manager who is ready to build a team of top performers who will meet and exceed your revenue expectations, click here to contact Revenue Hire now, or give us a call today at: (512) 348-5939!