“Shaun, I am interested in starting an investment advisory firm and I want to hire sales people to market over the phone. I am looking to pay a 30% commission on a $120 service. That comes out to $36 per sale. I have never hired sales people before, so I am not sure if this is reasonable. If a sales person makes 10 sales a day he can earn around $90,000 a year, but are there any salesmen out there who can make 10 sales a day by cold calling? What is a reasonable number of sales per week or month that I can use as a benchmark?” Mike
Mike, good question. You have started in the right direction with your sales numbers, now you need to beef them up, put together a sales plan, then I will address hiring sales people.
You need your numbers to include, numbers of calls to get a lead, number of calls to get a person (vs. voicemail), numbers of leads to get a sale, and average sales cycle (time from a lead to a sale). On my sales team, we track these numbers and then we compare over months. We track to determine how our sales team is performing and forecasting future changes in our market (for example more or less calls to get a lead plus what type of lead). Our sales cycle is over many months and often years, so we set expectations for our team on the substantial effort (including cold calls) required to close one deal. Can your solution be sold in one call? Are you selling to businesses and / or to consumers? For example does it take 10 calls to make a sale (100 calls a day) or does it takes 50 calls to get 1 lead and 5 leads to get a sales, (ie 250 calls to 1 sales) therefore a sales person would need to make 2,500 calls (not possible) a day to make $90k a year.
Have you put together a sales plan? How many deals have you sold? Where did you get your leads? Have you personally made cold calls? Do you have a telemarketing script? In addition to cold calls, what other marketing are you doing (web, print, sponsoring)? Who is your ideal client? In your sales plan, I would determine the size of your market. Is your market the world (6 billion people), the United States (300 million), California (40 million), or New York City (9 million)? Or are you by markets: retail, healthcare, automotive, etc? Then you can determine how much you can grow your business and how much money you and your sales people can make? With this information, you can determine how many sales people you need.
Also, you may want to check out my response from March 26th on resellers. You can also consider outsourcing your calls to a telemarketing firm and/or you can partner with other companies to sell your solution:
Now we get to hiring. $90k a year sounds good for a telemarketer but if you are not paying a base salary and you do not have a history of paying commissions, how are you going to attract quality talent? I would also put together your ideal candidate. You can also look at my response on July 2nd for recruiting at a start-up.
Comment: in your business plan give yourself time to acquire clients. Sales cycles are always longer than companies would like. If you expect to start signing 10 clients a day in the first month, I expect you will be disappointed.
Good Recruiting and Building of your business. Let us know your how your business grows! Reader Feedback, please click the comments below to give ‘Mike’ additional information on 'Recruiting’ and I want your feedback on my response. Shaun Priest aka CloserQ.
Mike, good question. You have started in the right direction with your sales numbers, now you need to beef them up, put together a sales plan, then I will address hiring sales people.
You need your numbers to include, numbers of calls to get a lead, number of calls to get a person (vs. voicemail), numbers of leads to get a sale, and average sales cycle (time from a lead to a sale). On my sales team, we track these numbers and then we compare over months. We track to determine how our sales team is performing and forecasting future changes in our market (for example more or less calls to get a lead plus what type of lead). Our sales cycle is over many months and often years, so we set expectations for our team on the substantial effort (including cold calls) required to close one deal. Can your solution be sold in one call? Are you selling to businesses and / or to consumers? For example does it take 10 calls to make a sale (100 calls a day) or does it takes 50 calls to get 1 lead and 5 leads to get a sales, (ie 250 calls to 1 sales) therefore a sales person would need to make 2,500 calls (not possible) a day to make $90k a year.
Have you put together a sales plan? How many deals have you sold? Where did you get your leads? Have you personally made cold calls? Do you have a telemarketing script? In addition to cold calls, what other marketing are you doing (web, print, sponsoring)? Who is your ideal client? In your sales plan, I would determine the size of your market. Is your market the world (6 billion people), the United States (300 million), California (40 million), or New York City (9 million)? Or are you by markets: retail, healthcare, automotive, etc? Then you can determine how much you can grow your business and how much money you and your sales people can make? With this information, you can determine how many sales people you need.
Also, you may want to check out my response from March 26th on resellers. You can also consider outsourcing your calls to a telemarketing firm and/or you can partner with other companies to sell your solution:
Now we get to hiring. $90k a year sounds good for a telemarketer but if you are not paying a base salary and you do not have a history of paying commissions, how are you going to attract quality talent? I would also put together your ideal candidate. You can also look at my response on July 2nd for recruiting at a start-up.
Comment: in your business plan give yourself time to acquire clients. Sales cycles are always longer than companies would like. If you expect to start signing 10 clients a day in the first month, I expect you will be disappointed.
Good Recruiting and Building of your business. Let us know your how your business grows! Reader Feedback, please click the comments below to give ‘Mike’ additional information on 'Recruiting’ and I want your feedback on my response. Shaun Priest aka CloserQ.
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