There are three parties to our deal, the reps, you, and me. In that order. Let’s look at all three.
1. The Rep
Let’s look at it from the rep’s point of view. If the rep does not like what is offered, then it’s a moot point what we think.
A fraction of the U.S. work force is in sales. A fraction of those will consider a commission-only position with a further fraction finding a work-from-home arrangement with no expense reimbursement acceptable. Of this population, a small fraction is available and looking for positions. A small fraction again are worthy of being called a closers. This is our target audience. There is a lot of competition to reach these reps.
I know how to reach them and how to close them. It starts with my being extremely selective on what projects I take on. The reps will be selective too. After all, they are betting their ass (livelihoods, family, house etc.) on the gig. It’s a matter of credibility. Closers only respect closers. I’m a closer.
Beyond this is the set-up. What can we offer in terms of pay, leads, training, support, career advancement and so on.
I offer realistic sales training that reps enjoy. It’s based on a psychologically engineered™ sales process. What’s the point of having reps say the wrong things over-and-over with a positive attitude? Once we dial in the process we know what to teach and can mass-produce closers.
Sales training and optional role-play sessions are done via conference calls once a week. I create a team (intranet) site that has training manuals, sales policy guides, and so on (password required). I also coordinate any required technical and product training that you provide.
I create an environment that maximizes personal freedom while demanding accountability. I treat reps like adults and demand they act that way. I offer advancement not just with a project but also across projects. Reps need to qualify each week to stay on the team. I have high standards.
Reps that can meet these standards are in demand and can be choosey. They want to see a significant upside for their risk and efforts. First, the product must be salable, and in sufficient quantity, price, and commission rate to see $5K to $10K at the low end and $10K to $20K and more at the high end.
That’s all it takes. Simple, eh?
2. Your Company
I know you want sales. You may be in a hurry. But first you need to protect your company’s reputation (brand). I know this and always make it a priority. I will not mass hire just to show head count on a team. I recruit fast (second) but carefully (first). I want the same quality that you would look for to fill a W2 salary position working in your office. I primarily recruit college graduates with successful sales experience. They will be expected to be professional and have superior communications skills. I demand work history documentation, references, and ID copies.
For startups, there is a limited window of opportunity to capture the market. If it looks like you are successful then the interlopers will show up, copy you, try to undercut your prices, steal your customers and take the market for themselves. Technology can be copied easier than a winning sales force can be created. Your best barrier to build an overwhelming army of reps to bring in the best accounts. You will own the relationships that are the market. Get there fast, first and set the bar high so that those looking at your market decide (wisely) to make a living doing something else.
Lastly but very important is to ensure your liability is zero for the sales team. I typically set it up so the reps sign IC Agreements with me and we have a separate (business services) agreement. Both agreements indemnify you completely as far as the sales team goes. No wrongful termination or discrimination lawsuits, no state or federal tax authorities going after you saying your IC’s were W2s and demanding back taxes, penalties and (worse of all) minimum wage payments.
Oh yeah, sales… you want lots of sales. OK. That’s what I do.
3. Sales Team 1
My services are in high demand. There are hundreds of thousands of prospective clients. I get many inquiries every week. I can only build and run so many teams. Obviously I have to screen proposals stringently and can only consider those that look the most promising.
The company has to be viable and a player. Products must be in demand and salable. They must enjoy unique advantages making it easy to differentiate from any competitive products. They must have high margins so the game has an upside worth pursuing. The company must be able to deliver on its promises to its customers, the reps, and to me.
I have to compete against all other sales positions the reps may be offered. I can do this if I have enough margin to pay a high commission and performance bonus. The exact rate depends on the probable sales volume considering product, competition, pricing, training and other factors. Not some fantasy spreadsheet projection.
Trying to scrimp on my margin is counterproductive. First, I won’t be able to entice and retain reps (closers). Second, ask yourself if you’d rather have X% of a small number or a little less than X% on a huge number. If sales are high enough and prices go up because the team is good enough to properly communicate value, then your margin with me will be more than without me. Life is too short. Higher margins mean faster ramps which mean huge money that you would not see if you grew slowly (if at all). You can exit earlier with more money and start another company in the time it takes to diddle around counting beans. Third, I won’t take the deal.
I pay the reps, sales director overrides, recruiting costs, and administrative overhead out of the margin. What’s left is my profit. If that number does not make me excited I will pass.
I always operate as the sole sales team. I do not get involved in messy situations with multiple teams. I will act as your VP Sales… you wouldn’t have two VPs would you?
I operate nationally and internationally, never regionally, unless it’s the first step to national.