Startups · Education

How do I get and recruit sales reps to sell my product/service?

Eric Roubal Principal Engineer at AtTask, Inc.

December 30th, 2015

What would be the best approach to recruit commission-only motivated sales people that believe in my startup's cause?   I see competitors doing this successfully yet I'm unable to search out their techniques other than posting to their own website. 

Anonymous

December 30th, 2015

I haven't seen commission only sales people work out since late 2001.

You need to pay a small draw. The 80/20 Rule is King. In most cases the startup has yet to find an offer that customers will pay real money for, day in and day out. Therefore, it is unfair to expend the sales people's time without some tangible form of payment.

Tom Jay

December 30th, 2015

I had good experience with Craiglist, simple ads.

I paid sales people a portion of the upfront sale and then a monthly payment since the system had a monthly fee.

If the product setup charge was $100 I paid $75 to the sales people and if the monthly was $50 per month I paid them $25 per month for 6 months but only if they were actively selling for me.

I had sales people all over the country, most lasted about 3 months,  a few lasted a year.

If a good sales person sold 1,000 units then they could receive on going commission of $ 25,000 per month as long as the customer continued to pay and they continued to sell for me. I did not cap the sales income.

I had a few good sales people but lots of average ones.

The good ones I made area managers and had them train the others and gave them a portion of the others income under them.

Worked well for 2 years, then the product died out.


John Currie ITERATE Ventures - Accelerating Science & Technology Ventures www.iterateventures.com

December 30th, 2015

Eric,

Simple answer .... show sales people how they will make a killing with your amazing product.

To recruit good sales people, you should have sold enough to have an ideal target customer, a sales/mktg "approach" model, a pricing formula and general negotiation process.

If you haven't worked out the sales model or know the target market ... not so simple.

Richard Harris Top 25 Inside Sales Leader, Public Speaker, 40 Most Inspiring Leader, Sales Trainer, Start-Up Advisor, SalesHacker

December 30th, 2015

It's pretty simple math. You have a multi-million dollar idea. Otherwise why would you be doing it? 

Then you want someone to come in and help make you a millionaire but have them assume all of the financial risk?  Great sales people won't do that. And as someone mentioned earlier, those specializing in disruption product/services don't need to.

Here's another way to look at it, as an engineer would you sign on for several months to build a product without any type of real compensation before it takes off?  If not, then why would you expect that from a sales person.

Unfortunately most technical founders and CEOs think sales people are easily dismissed, replaced, and / or replicated.  

Here is what you need to know about sales, it's expensive, very expensive. It's a long tail game and too often people focus on short tail. 

As it was said in MadMen. If you don't like how they make the sausage, get out of the kitchen.


Andrew Lockley

December 30th, 2015

Demonstrate your own ability to make a success of this! People will want to emulate you.

Rob G

January 4th, 2016

@ Eric, we are all just shooting in the dark here until we know more about how the $$ pencil out - primarily LTV/NPV.  you need to speak up or we are all just throwing $%it against the wall - no offense intended to those above making informed suggestions. 
let's stop beating around the bush here: 
It's imperative that you have a clear understanding of the calculus from a revenue and expense perspective - you are after all, expecting to compensate your sales people on revenue (or margin).  Based on a cursory look at your website and a very crude understanding of your product offering i have a hunch that a direct sales model simply won't pencil out - happy to be proven wrong. I encourage startups to start with a direct sales model, even if a direct sales model won't pencil out or scale in the long run, simply because there's no substitute for the high touch that direct sales give you with prospects, customers and partners early on.  If your model needs to transition (or start) to a marketing only model that's fine, but everyone needs to go in with their eyes wide open - no sense trying to fool yourself or your early team.  Believe me, a sales person worth anywhere near their salt will pencil out the numbers before the first cup of coffee is gone - assuming you want people with some grey-matter between their ears.  
SaaS startups that lack sales expertise, but have a co-founder with extensive marketing experience can be successful going with only marketing (no offense to the marketing folks) right out of the gate, but it's not clear that you have this skill on your team either.  That's (marketing) a very different discussion than "how do i get and recruit commission only sales reps to sell my product...".   
So, since you asked, for rough calculations assume that compensation for a sales person (or team) will roughly mirror that of a software developer (or dev team) with perhaps a somewhat broader scale from low-end to high-end. Forget adjusting for a risk premium just yet.  So, for talking purposes only and allowing for the usual adjustments such as location, a green CS grad will likely command somewhat more than a sales person with equivalent education and experience - very roughly ($50k-$70k V $40-50k), exceptions certainly abound on both ends of the scale.  On the upper-end a software developer with a MSCS and 10+ years of experience will likely command a bit less than a sales person with a MS/MA and 10+ years of experience (very roughly $100k-$180k V $100k - $300k+), though for sales people much more dependent on industry and track record.  Again, very rough numbers, but you get the idea.  The scale continues for equivalent titles (manager, director, VP, CXO).  The BIG DIFFERENCE is that it is very rare for a software developer to agree to base their compensation solely on directly measurable performance - i.e. "pay me on revenue" or "pay me when the product launches" or "pay me when we have x,xxx customers".  For a SW dev the calculus is typically very low risk and thus there is typically no to low risk premium.  For a commission only sales person the risk is very high, especially for a startup, and thus the risk premium is commensurately high - very high.   Limited dev resources in a startup magnify the risk even more for the sales person.  Imagine you are a commission-only sales person and you 'make' a bunch of sales, but you don't get paid until customers pay and customers don't pay until they have a working product or a certain feature set and that product or feature set is dependent upon the performance of the dev team... who are not compensated on revenue... or performance.  In your case your risk premium is quite high.  According to your website you are generating gross (net really) revenue (roughly) of $240k over 6-7 years or about $35-$40k/yr.  Even at 100% commission that won't get you past a cup of coffee.  So given that you don't have extensive experience in sales or recruiting, vetting, hiring and managing sales (or marketing) people and designing sales comp plans i just don't see how you can make this pencil out - unless i'm missing something.   If you can find a way to make the numbers pencil out, you still need to plan to hire a somewhat rare bird. This person doesn't necessarily need to have all the above experience (recruiting, vetting, etc.), but it would be a big plus if they did, but they do need to have at least mid-level experience in sales in an applicable industry, they need to buy 100% into your vision and be passionate about what you are trying to achieve and you will need to show them a very clear path to a risk-appropriate compensation plan that gets them out of bed every morning ready to perform super human acts.  And they probably should have significant marketing experience and a marketing degree because i have a feeling that you will need to transition away from a sales mofel to a marketing model very soon.  Again, in very rough numbers, that's probably a very clear and realistic if not conservative path to $100k ARR (their gross comp) within 6 months.  To induce them to perform super-human sales acts that's probably more like $200k ARR (gross, to them) within 6-12 months with some equity too. Obviously the clearer the path and the higher the passion and compensation the lower the comp can be.  Remember, just like developers who have passion and do side, open source projects, sales people are also passionate about certain markets/causes, but they need to pay the bills too.  

If you stand even a snowballs chance is hell of recruiting a commission only sales team worth the effort you MUST be very clear on the numbers and the risk and you have to be willing to compensate them very well and you MUST be willing and able to step through the numbers with the potential new-hires in a clear and convincing manner.  That's likely a detailed revenue and expense model of months 1-12 plus quarterly of years 2-5.  This model needs to get very detailed and must withstand the sniff test that any decent sales person will give it.  If you were going to convince a SW developer to build your product for you and compensate them only on a % of revenue or net profit what details would you need to show this developer?  

Often times it's hard for technical folks to get their arms around the concept of sales 'hacks' making at or above what technical people make.  Give the reputation that many sales people perpetuate and sometimes deserve that's no wonder. I'm a recovering engineer, i get it. I used to manage engineering teams and sales teams - i get it.  I also have a lot of experience selling (SW and SaaS), recruiting, vetting and managing sales teams and designing compensation plans.  I was a VP of sales for, at the time, the worlds second largest software company - publicly traded on the NYSE (still is).  I can tell you that there was always at least 1 sales person on my teams who's W-2 exceeded that of the CEO and all of the CXOs in the company.   That's just the way it works in sales and that's what you want - ethical sales people who will move heaven and earth to help you achieve your targets. 

Neil HereWeAre Want To find-close Business Online without competition Before They Google Search? We solve this problem 1(508)-481-8567

December 30th, 2015

How do I get and recruit commission only sales reps to sell my new/startup product/service?


First off, you need to understand that commision only sales reps are not pioneers
They won't spend time pioneering acceptance for a new idea because it takes lots of time and they dont get paid on the market creation/acceptance time it takes to make that happen. They get paid on sales.

Possible path - Manufacturer's reps. Here's why:

  1. Reps are specialized in particular markets and know to all the many different ideal users of your product and are respected by the target ideal prospects and customers in their markets as solutions providers. 
  2. Linking with them, you are no longer seen as the new kid on the block nor seen as a gamble but instead are now seen as part of the offerings that the respected manufacturer's rep has. You piggy back their existing and respected reputations and leverage that to get a fast start re actual sales.
  3. That's a fast start without spending a ton of money on market development since reputation building, value v need and credibility building even finding the right markets/buyers is already done by the Manufacturer's Reps Group.
These manufacturer's reps groups do work on commission so you would have to find the right group who sees what you have as a natural fit/add on to what they already offer and as a new revenue-profit stream from existing not just new customers. 

Remember, they too are not pioneers however so you need to pay attention on how you find them and get them onboard with committment to you and selling your pffering..

Approaching them so the Manufacturing Rep Firm will want and actully sell your product/offering: 

  1. State what you do and then ask them why you should select them and their rep firm to be your reps. 
  2. That turns the tables from you asking "please sell for me" to the rep firm asking "can I please sell for you". 
  3. It also gets their committment to making the sales flow and happen.
To find and recruit the right motivated and target market connected commission only sales folks who will then actully go and make lots of sales for you, Try this approach out.

I successfully used that approach as a manufacturer as the way we went to market. Best yet, you pay only for sales so the "cost" side of going to market is under control and the right sales expert selling for you v the revolving door does build a great business for you and themselves. 

Aaron Jun

December 30th, 2015

I think there's a tendency to discount the work of a good sales team in the tech industry. 

If you are serious about growing a business, you need to be as serious about bringing on a great salesperson as you are about the engineering and product side of the equation. It is very unlikely that you will find this person by offering only commission. You need to build in a big upside to their compensation, of course, but also offer at least a small portion of the total on-target salary as base. If you don't, you'll get an influx of people, sure, but no one particularly good, and it will cost you more in the long run to keep recruiting and training (however superficially) these people. Best to focus on hiring a truly good salesperson who can partner with you to scale the business beyond what your abilities would allow you to do alone. 

So the question becomes, How do I find a good partner for this? A few good interview methods I've employed and encountered are: 

1) Have them give you a mock pitch for your product, and then have them retool the pitch incorporating your feedback in a week's time or so; 
2) Have them speak to someone you trust within your network who has sold and been held to quotas before; 
3) Ask concrete questions about how they envision their process helping your outfit in growing sales numbers - things like how they'd prospect, what their sales cycles would look like, etc; 
4) Tell them how you are currently selling the product, and ask them to pick out a couple of places where they see an obvious potential for improvement. 

Unless you and your team have the sales cycle tuned precisely, it is unlikely that an army of commission-only salespeople would help you move the ticker up in any meaningful or sustainable fashion. Again, sales is just as important as the product itself, so don't shoot yourself in the foot by treating this function of your business as a mere afterthought.  

Mark Wing Client Engagement Director at Small Back Room

December 30th, 2015

Positive brand equity is the key.

Sales people operating on a commission only contract want to know that the product/service they are selling is a sure thing. So if you are supporting their efforts, with a powerful and clearly evident marketing strategy, this will make being involved much more attractive.

Louis Cammarosano Founder/Owner at Smaulgld LLC

December 30th, 2015

Some ideas

-show your potential sales candidates the same presentation you show investors-if it is compelling for investors, it will be compelling for sales people;

-consider offering options as well as commissions; and

-pay one sales manager cash/options with success in building teams and have him/her recruit and train commission only sales people