“Your Most Important Decision”

Here’s a tip from Barry Shamis, who is without a doubt the most knowledgeable person in the world on recruiting and hiring winning retail employees

Imagine this situation.  You are competing against two other retailers for the same customer's business.  One retailer is the 900-pound guerilla (the best known) in your market and the other is a competitor of about the same size.  You have the best brands, the big retailer has the most market stare and name recognition, and the third competitor has the lowest price.  Who gets the business?

The answer is extremely predictable.  The company that gets the business is the one with the best salespeople.  Good salespeople turn out more sales regardless of the circumstances.  Are you going to win the next time you find yourself in this position?

The best opportunity you have to impact the productivity of your business is every time you make a hiring decision.  Good hiring decisions propel you to success.  And, all the managing, coaching, systems, training and technology CANNOT help you recover from
a hiring mistake.

Over and over again I see examples of companies with inferior products, over-priced products, and poor reputations win the business.  Why?  Because they have the best salespeople.  The retail market is as competitive a market as you are going to find.  If you want the edge in the battle for business, upgrade
your sales force and you have the best chance of succeeding.

Most businesses suffer from the 80-20 rule.  You get 80% of your revenue from 20% of your salespeople.  This applies to hiring as well.  For years I have listened to business owners' talk about hiring five and keeping one good person.  This is a terrifically costly way to do business.  Let's translate some of the costs so you can see just how much this flawed strategy is costing you.   Here's an example:

You hire John to sell in your downtown store.  After a month, it doesn't look good.  After 90 days it is really bad.  But since you need the floor coverage, you hang in there.  At six months you give up and let John go.

This all too familiar scenario happens time and time again.  Unfortunately, you get lulled into believing that all you lost was six months of salary and benefits.  Nothing could be further from the truth. In addition to salary and benefits
you lost six full months of sales opportunities, management time, administrative costs, and training costs.  How many customers or potential customers were lost because of their interaction with John?

And these are just the obvious costs.  Some of the hidden costs you may not have considered are vacancy costs, replacement costs, customer costs, separation costs, and employee morale costs.  The final cost is loss of competitive edge.  Just think of all the business you lost because you were outsold. 

Let's look at a salesperson with a $20,000.00 base salary and an annual quota of $200,000.00.  Salary and benefits for six moths cost $13,000.00.  It cost
you $2,000.00 to recruit the person.  You spent $1,000.00 on a training period and sales materials.  And those are just the hard dollar costs.

Your soft costs begin with lost opportunity.  If John had been successful, how much revenue would he have generated?  You have to add 50% of your
annual quota to the total for lost opportunity (Cost - $100,000.00).

How about your time?  Would you have been more productive using your time working with someone who was generating revenue (Cost - 15% of your
annual compensation - $30,000.00)?  Make sure you add separation and administrative costs (Cost - $1,000.00).

And the two real intangibles in this equation are employee morale and customer cost.  Your good employees resent having a non-performer on the staff.  It makes them took bad and they have to work harder as a result.  And, there is cost with your customers as well.  They have to deal with a sub-par person, which can sour the relationship.  (Cost - What is the cost of one lost customer?)

Your cost of one hiring mistake is roughly $147,000.00 without counting the cost of low employee morale or lost customers.  And here is the really sad part - if you do make this hiring mistake, you have to do It all over again, doubling all the numbers!  How does $294,000.00 for each hiring mistake sound?

Now you can see why the "hire a bunch and keep a few" staffing strategy is a mistake.  The good news is you are on your way to fixing the situation as we speak.  The first step in upgrading your sales force is to recognize the problem.  Next, you have to put a great recruiting and hiring process in place that gives you the highest probability of hiring top talent.

You have to start by knowing what you are looking for. This sounds so simple but is at the heart of most hiring mistakes. Begin by outlining your sales cycle.  Understanding the mechanics of your sales cycle is crucial to understanding
the type of person who will be successful.  Just because a person was successful at another job does not mean they will be successful on your job.  Test your top performers so you can build a profile of the successful person.

At each step of your sales cycle, what behaviors are necessary for success?  The answer to this question is the key to building an effective performance-based success profile.  Build a list of all the behaviors necessary for success on the job.

Now the question that I am sure is swimming through your mind is, "How do I figure out if the person sitting across the interview from me behaves this way."  Let me start by saying that if you rely on gut feel, interview behavior, and
the person's track record, you are doomed to fail.  That's right, these typical measures are not the best way to predict success on your job.

There is a more reliable and much easier way to get the information you need.  Simply get examples from the person's experience where they had an opportunity to demonstrate these behaviors.  And find out what they did.

Here's an example. Requirement: Rapport Building Skills.  You would ask: How did you connect with the last person you sold to? How did you open the conversation?  How did you establish a bond?  What questions did you ask?  How did you use the answers to help your sales?

Hopefully you can see from this line of questioning that the person knows how to establish rapport and their answers will be full of examples. This is just one example of many that you should get during the interview.

Once you realize the economic impact recruiting and hiring has on your business, you're ready to take the steps necessary to get on track. You just can't leave your recruiting and hiring to chance. Recruiting and hiring top sales talent has to be your top priority.