Before they ever start actual recruiting, good sales hirers sit down and really plan out a new hire’s career, every step of the way. They project what the new successful rep can and should earn in each of their first 5 years in the business.
Most of us who have been sales managers have put together sales projections. Year after year, we write stuff down on our spreadsheets. But then when we get to the end of the year, turns out it’s not all that accurate. The trick is, you have to start at the most granular level in order to wind up with a reasonably accurate projection. And a good, accurate five-year compensation plan and projection is a terrific recruiting tool for you.
You go through year by year and realistically project what kind of activity they’ll be required to do, reasonable activity for a serious salesperson. Then lay that up against a solid closing ratio. Figure year by year, what this new salesperson is going to earn for you. And then based on your comp plan, how much will they earn for themselves?
Look at sales help wanted ads. Lots of claims about earning big money. Consider the power YOU get by saying, “Listen, if you make 4 presentations a day, 5 days a week, and you have a reasonable closing ratio, then your first year, you can expect to earn $65,000.”
And then, depending on your product or service, from the 2nd year on, you show what they earn each year, plus the residual income from prior years. When you can show an applicant what they’ll be earning five years out, your sales position is suddenly seen very differently from the others. Seven year, ten year, long-term clients tell me that a codified sales hiring system makes a big impression on applicants. They get better quality applicants accepting their sales position than ever before. When an applicant sees that you really projected out, it gives them confidence in your promises.
Everybody wants 6 figures. But unless it’s a super lucrative sale and you’re hiring senior sales reps, it’s tough to project $100,000 first year. Depends on the market. We’ve got clients in Minnesota. More elk than people there. Cost of living is way lower than it is for our clients in New Jersey. So it depends on market. If they’ve got a shot at 6 figures in the 2nd or 3rd year, I think that’s reasonable.
Most of these ads that claim $100,000 income have nothing behind that number. No research. No science. The applicant knows it’s BS. But when you show a projection and reasonable benchmarks they can really hit to get to $150,000 in year 5, you overcome their resistance to a performance-based compensation agreement. Suddenly, it all looks very doable.
And you have an approach that wows your applicants and eliminates your competition.
This is Alan Fendrich with Advanced Hiring System. Give me a call.