Hiring the wrong person for a sales position can be costly for a business. Not only do you have to spend time and money training the new hire, but you also lose out on potential revenue that could have been generated by a more qualified individual.
This could potentially amount to a serious impact on a business’ revenue.
In this blog post, we discuss the cost of hiring mistakes and the tools that can help you make better decisions when it comes to hiring salespersons. We will also provide some tips on how to reduce turnover and improve your sales team’s performance.
In order to properly discuss the topic, here’s a breakdown of the costs involved (and actual damage…) when hiring the wrong person.
- 3 months – Average time to fill sales position
- $15k – Cost of hiring
- 3 Months’ salary – Cost of training
- $75k – Average first-year salary + Incentives
- $2.1m – Average Tech sales rep yearly Quota
Let us not forget the impact a bad sales rep can have on the company’s reputation. With their almost exclusive interaction with customers, a company’s reputation will live and die with its sales reps. An inadequate salesperson can damage a company’s reputation and thus not only impact the lost quota they failed to deliver but also cause a ripple effect on future business.
Besides the direct impact above, the effect a bad hire can have on the company culture and productivity tends to be underrated. As we are witnessing a rise in teamwork culture, especially within Tech companies, the need for good chemistry between coworkers is more crucial than ever. One rotten apple can create a toxic “ambiance” jeopardizing corporate culture and employer brand that’s taken years to build!
According to Harvard Business Review, bad hiring accounts for approximately 80% of employee turnover. This is a major factor in team chemistry making it even more difficult to sustain a good working rhythm within a company – directly reducing productivity and thus affecting revenue.
As you can tell the cost of error can amount to millions…
So what can we do about it? Investing in your Hiring Process is the starting point. The Onboarding process is even more important.
Hiring, of course, should not be taken lightly, it is an important process that needs to be given adequate time and resources – starting with the Screening process.
Having a well-defined screening process in place will help you sift through the initial pool of candidates and narrow down your options to a more manageable number.
Define what criteria are important for your business and do not compromise over them, well-defined KPIs are critical for both you and the salesperson in creating a mutual understanding of what is expected from them and help you to evaluate whether they can perform.
But what happens after they sign-up?
This is where you need real, accurate, and comprehensive Data + Data + Data = Insights
The more data you can log regarding your business the better the insights you will be able to draw from it and in sales, this is particularly true. Not only is it vital to know as much as possible during the hiring process, the onboarding and run-in process – the first 12 months of employment – are even more critical (and costly in case of a hiring error). This is a “blind” period during which it is extremely difficult to make an educated decision regarding your new salesperson’s performance and true potential.
Acquiring data about your sales team daily allows you to both monitor and optimally support their productivity. Analyzing their performance with them to gain insights into how they can improve is a major part of every learning curve yet when the data is subjective and is viewed through the eyes of the salesperson it is hard to understand what went wrong and how to improve. This means that we should only rely on objective, accurate and comprehensive logging and monitoring tools, that are also automatic and do not impede sales folks’ efficiency.
These tools are of great value for monitoring the team’s performance and revealing a bad hire early – thus significantly reducing the cost of mistakes. This monitoring can be done by analyzing the data logged by the team within the company CRM and understanding how they are performing daily.
OK, but what data should we be monitoring? And how do we make sure the data is real, accurate and comprehensive, and most importantly – objective?
The accurate documentation of the interaction itself with the customer is the most sought-after data for gaining meaningful insight. The integration with the business email and the CRM is of course a good start – enabling the capturing of email interactions with clients into the company system where it can be assessed. But these days it is merely an insufficient start.
Cell phone communications with clients (voice, message, Whatsapp, etc.) provide both the salesperson and the training team with objective data regarding the quality of the conversation. Allowing the team to reflect upon the calls and determine what is required of the salesperson in order to improve their performance. Not only is this information important to the company who can train their reps efficiently and reveal “bad apples” earlier, the sales reps themselves can analyze and improve, boosting productivity across the board.
There is a clear rise in demand towards versatile and flexible communication with customers in recent years. This rise in demand is reflected by the sales reps, with an estimated 60% of business calls made using cell phones. Furthermore, remote work models only increase the need for flexibility and cell phone use by employees.
The acknowledgement of the importance of this documentation is not a new phenomenon. Traditionally the use of landline work-only phones enabled seamless, easy logging of all of this precious data. Yet as we have established this is no longer the case and thus obtaining and documenting these interactions has become an organizational nightmare that requires utilizing various different solutions in a cumbersome fashion.
The difficulty of this process results in a glaring blind spot, that inhibits the companies’ ability to make use of the knowledge in both training and sifting through the salespersons as they complete their training in the company.
How would you feel knowing that after investing all the money into the early stages you still weren’t able to get it right? Even more so, knowing there was more you could’ve done.
This is where solutions such as Mobile2CRM come into play. Enabling logging and capturing of voice, message, and Whatsapp into the company CRM with full transcription and even advanced summarization features. Not only does it allow accurate, objective and full logging of the data – Mobile2CRM also helps businesses gain insight with AI analysis features that create insight from blind spots.