You want to increase sales and enter new markets, and you know that means hiring more salespeople. But how can you be sure these new team members will turn out to be a worthwhile investment for your company?
They will--if you take a disciplined approach to hiring and invest the time and effort to set all your sales reps up for maximum success. That advice comes from Victor Ho, co-founder of FiveStars, a loyalty program platform for small businesses. He speaks from experience. The two-year-old startup has grown from 150 employees to 300 in the last six months--and 100 of those new hires have been sales reps. At the same time, the San Francisco-based company has also opened a new office in Denver. Despite that rapid growth and the perils that could go with it, tripling the size of FiveStar's sales team has paid off. The company is now adding merchants (its paying customers) five times faster than it was a year ago.
How does the company make it work? Here are Ho's insider tips for rapidly building a sales force the right way:
1. Fill sales positions--don't create them.
What do you do when faced with a sales rep candidate who has an incredible track record and potential, but you don't have an opening that's a good fit? Many companies will reconfigure their structure or create a new job so as not to lose that great candidate, Ho says. FiveStars won't.
"We don't want to hire people and churn and burn them as other sales organizations sometimes do," Ho explains. "Attrition is the hidden killer in local. We will pass on somebody if we don't think we have the structure that will make that person successful." This approach can create challenges, he says. "For example, we only allow one new rep per market. We thought if we prioritized setting every salesperson up for success, the results would come--and they have. Local sales attrition benchmarks are anywhere from 30 to 50 percent annual rep turnover. Ours has been less than 3 percent."
2. Treat field offices like new companies.
When you set up a new sales office in a new territory, the people who work there can wind up feeling cut off and far from the center of the action. "It's a big mistake to treat a new office as an extension," Ho says. So when FiveStars opened its Denver office, the founders treated it as if it were a whole new startup. One of the company founders actually moved to Denver for six months to be on hand while the new office was staffed and got up and running.
3. Make training new hires a top priority.
VPs and founders at FiveStars each spend two to four hours a month training new hires. "This investment in training to reduce ramp time is particularly valuable in sales," Ho observes.
Not only that, during the accelerated hiring period when FiveStars tripled its sales team, the company had some of its most experienced and successful sales reps devote all their time to training new hires. "Most companies wouldn't tell their best sales reps to stop selling and focus on training," Ho says. "But for us, making sure every individual rep is set up to succeed will end up being the best for the company. The result is we're getting reps up to speed and productive much faster than we originally thought possible--and our sales results have reflected that."
4. Only hire as many people as you can train--the right way.
"When designing our onboarding system, we prioritized scaling our culture and keeping the training personalized and engaging," Ho says. That means things like flying new hires in the Denver office to the San Francisco headquarters for two weeks of training, and holding new hire dinners and bourbon chats for them with the company's founders.
What if you want to hire new people more quickly than a process like this allows? Don't do it, Ho advises. "Once we had that system, we figured out how many people we could hire per class," he says. To maintain the intimate feel and personal connection, FiveStars determined that maximum was 15.
Most companies would figure out how many people they wanted to hire and then design a training system around that target, he adds. But he believes maintaining the right experience and making sure all new hires fully understand the company culture is too important. "We calculated it would take us six months to double the right way," Ho says. "The outcome has been tripling our sales force and maintaining sales metrics as we've scaled. Most importantly, people are coming out of onboarding with solid knowledge of our founders, our products, and how we talk about the company."