How long do you give a salesperson to establish themselves?
Discussion
I brought someone into my team who had experience within the industry.
People I've spoken to seem to think it takes about 6 months for a salesperson to establish themselves before sales start flowing; I'd have expected more like 3 if he was already established in the industry with contacts etc.
I can see he's getting out there, lots of meetings, loads of positivity, really busy etc and he's getting in front of some major names (some we've struggled with in general that he's come in and said 'i know them' and gone to see them the next day).
He's paid £40k basic with a £450 a month car allowance and 5% of invoice value for what he sells, an average job is somewhere between £1,000 and £100,000.
How long do you give someone with a fantastic prospect list but in terms of actual fact isn't covering themselves?
We agreed at interview that £1,000,000 was achievable per year (so he'll be earning £90k), the rest of the team are doing an average of around £50,000 a month.
My question is, at what point do you cut your losses after promises of 'these will drop soon, definitely' ?
Edit: I should say that this is a product that isn't necessarily a win or lose, i.e. he's not selling photocopiers and people don't have to make a choice between suppliers, it's an energy efficient technology that you either take or you don't. We're mega busy hence expanding the team.
People I've spoken to seem to think it takes about 6 months for a salesperson to establish themselves before sales start flowing; I'd have expected more like 3 if he was already established in the industry with contacts etc.
I can see he's getting out there, lots of meetings, loads of positivity, really busy etc and he's getting in front of some major names (some we've struggled with in general that he's come in and said 'i know them' and gone to see them the next day).
He's paid £40k basic with a £450 a month car allowance and 5% of invoice value for what he sells, an average job is somewhere between £1,000 and £100,000.
How long do you give someone with a fantastic prospect list but in terms of actual fact isn't covering themselves?
We agreed at interview that £1,000,000 was achievable per year (so he'll be earning £90k), the rest of the team are doing an average of around £50,000 a month.
My question is, at what point do you cut your losses after promises of 'these will drop soon, definitely' ?
Edit: I should say that this is a product that isn't necessarily a win or lose, i.e. he's not selling photocopiers and people don't have to make a choice between suppliers, it's an energy efficient technology that you either take or you don't. We're mega busy hence expanding the team.
well if the guys making the effort and really does have the right contacts i'd be tempted to ride it out.
as long as he's putting the effort in and he has a verifiable track record back him up. try talking to him yourself rather than venting here. don't go in all bull in a china shop approach. sales is one of the toughest things to do, even with the right contacts and the right products at the right price it sometimes is more about building relationships in the short term for longterm gains.
give your guy all the support you can, and it will be one less thing on his mind when he's pitching.
as long as he's putting the effort in and he has a verifiable track record back him up. try talking to him yourself rather than venting here. don't go in all bull in a china shop approach. sales is one of the toughest things to do, even with the right contacts and the right products at the right price it sometimes is more about building relationships in the short term for longterm gains.
give your guy all the support you can, and it will be one less thing on his mind when he's pitching.
Pretty much what I was hoping to hear and very much what I thought.
I'm not a micro-manager, and it's not something that has become an issue just yet, I was just after some feedback as to when it should become an issue.
Very likeable and friendly guy, offers great support to his peers to the extent that he's probably helping them make sales which is hard to put a value on. But ultimately if he's not covering himself then there will come a time when it needs to be raised.
I'm not a micro-manager, and it's not something that has become an issue just yet, I was just after some feedback as to when it should become an issue.
Very likeable and friendly guy, offers great support to his peers to the extent that he's probably helping them make sales which is hard to put a value on. But ultimately if he's not covering himself then there will come a time when it needs to be raised.
The bigger a company is, the longer it takes to change suppliers. My current employer has a large number of approvals and authorisations for most expenditure, and it can take 3 months or more even if nobody has an objection. That's especially true if he's going for big contracts rather than small ones. It'll take quite a lot of work to get the business started.
I know you are saying you don't want to micro-manage, but it might be worth taking a more active role with this guy if you're worried. For example, ask him whether you would be any use in any of the sales meetings with big potential customers, to show that your company is really serious about it.
I know you are saying you don't want to micro-manage, but it might be worth taking a more active role with this guy if you're worried. For example, ask him whether you would be any use in any of the sales meetings with big potential customers, to show that your company is really serious about it.
Without knowing more about the product it's difficult but I'd not be faffing about with £1k sales for £50, it's not worthwhile. And if it's anything like my industry £100k sales take a lot more time to develop. And without being cheeky I'd be after a good chunk more than £5k (albeit I don't get £40k basic).
That said if he's getting appointments etc then you'd think it'll come, as long as he's not being a busy fool and/or swinging the lead.
That said if he's getting appointments etc then you'd think it'll come, as long as he's not being a busy fool and/or swinging the lead.
OP, you have omitted some fairly crucial info.
You both agreed £1m annual sales, but what about ramp up? What did you agree his FIRST year sales would be?
How long did it take the rest of the Salesforce to reach their stable £50k pcm? A month? Six months? Two years?
You say you are unhappy with progress, but does the sales guy think he is on target or behind?
You also mention that “an average job is somewhere between £1,000 and £100,000.” Which is a fairly unusual profile.
Does this mean that the remaining guys do 50 sales of £1k per month, or one sale of £50k?
I suspect that with a better grip on the numbers, you will find it easier to get the Salesguy on track.
Also, slightly off-topic, but with commission based on revenue rather than profit, can you protect yourself against a salesguy discounting a £100k job to £50k so that he earns half his commission, but you lose money on the job?
You both agreed £1m annual sales, but what about ramp up? What did you agree his FIRST year sales would be?
How long did it take the rest of the Salesforce to reach their stable £50k pcm? A month? Six months? Two years?
You say you are unhappy with progress, but does the sales guy think he is on target or behind?
You also mention that “an average job is somewhere between £1,000 and £100,000.” Which is a fairly unusual profile.
Does this mean that the remaining guys do 50 sales of £1k per month, or one sale of £50k?
I suspect that with a better grip on the numbers, you will find it easier to get the Salesguy on track.
Also, slightly off-topic, but with commission based on revenue rather than profit, can you protect yourself against a salesguy discounting a £100k job to £50k so that he earns half his commission, but you lose money on the job?
swerni said:
I work in vendor land, I've been revenue based for about 15 years.
There are discounts I can't go beyond without higher approval,
The higher the discount the higher the approval.
Escalated approval is one way to manage larger value sales.There are discounts I can't go beyond without higher approval,
The higher the discount the higher the approval.
I’ve built MI systems for a couple of sales forces. Whilst we gave the junior people commission, the more senior guys are compensated according to gross profit, which means that they are much more closely aligned to shareholders, which can only be a good thing.
AB said:
Very likeable and friendly guy, offers great support to his peers to the extent that he's probably helping them make sales which is hard to put a value on.
Just a thought, really, but the helping others thing is something to be avoided. Bit like the threads we get on here where people want car salesmen to be experts - the last thing his manager wants is someone who is the "go to guy" for questions but never sells anything.Being likeable and friendly probably isn't great either if the sales are generally one-offs, but obviously different if it's about establishing a long-term relationship.
I've no idea about this particular business but strikes me the basic is quite high vs commission. That's sort of mid level field sales engineer in industry but their bonus would be far lower. For £500K to £1M scale of business cost of sales seems pretty high by the time all employment costs have been taken into account.
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