We all do it. It makes sense. Why wouldn’t you?
They are a proven entity; a low risk option; you know they can do the job.
They already have some product knowledge so it will take them less time to become profitable for the business.
They have contacts in your target market; contacts they can easily get a meeting with.
They won’t absorb valuable hours out of your week for product training.
They will bring market intelligence and valuable information on our competition.
These justifications a very compelling. I couldn’t tell you how many times I’ve had a recruitment brief to recruit “someone who has sold our products and who has sold to our market.” There are many reasons why you might hire people from your competition or even develop an entire recruitment strategy centred around hiring people from your competition.
But it’s not always a great idea, especially if this is your ongoing recruitment strategy. Why?
If you think about a recruitment decision as having long-term impact on your business, one that you will feel the consequences of in 12 months time and onwards; if you’re aim is to have the very best talent available to you; the highest sales producers, on every hire; if you intend to attract professionals that will forge a career with your company, consider this:
Let’s say you are looking to hire only sales performers that represent the top 20% of sales people in Australia. (By the way, if this is not your strategy, why not!?) Now let’s take it one step further and say that any new comer has to have worked in your industry, selling the same or similar products to the same or similar markets (OK, so they are currently employed with a competitor).
How many sales people work in your industry? This varies dependent on the industry, so for the sake of this exercise, let’s say there are 200 serious sales people in your industry in Australia (lucky you, if there are 200 of them). So you have 40 people (the top 20%) in your potential talent pool of candidates to select from. Where around 30% of sales people are on the market at any one time, the majority of these are not top performers. That’s why they are looking to move. So let’s say only 15% of the top 20% (40 candidates) are on the market at any one time (and I think I’m being generous here). That brings your talent pool down to 6 candidates in Australia and you have to find them. Oh, and by the way, how many of these 6 people live in your city within Australia? You can see where I’m going with this. The fact is, you need to get lucky to score a great sales person from one of your competitors. Whether you like it or not, if you have an ongoing strategy to hire from your competition exclusively, you won’t end up with sales people that represent the top 20% of sales people in Australia, let alone your industry. You’ll end up settling for what is available within your industry at the time, which will rarely be the industry’s best. However, you have taken a low risk option; a proven entity; you won’t have to train them and they will bring their clients with them… right? Are you looking long-term, or even mid-term? The problem is, none of these factors are a measure of a great sales person that will have significant impact on your company’s bottom line in the long run. You’re simply taking the seemingly safe option, not the most effective one.
However, a sales person that is in the top 20% of sales people, who is not reliant on bringing clients across, who can actually sell… Wouldn’t this be a better long-term option for your company than to hire a mediocre sales person from a competitor? After all, even if they can bring over some clients from your competition, if they are not a true sales performer, how will they reach their target in year two? Or is that when they will leave for another of your competitors who is offering more money? Are you thinking long-term? If you had have been thinking long-term two years ago, what would your sales team look like now?
OK, I know what you’re thinking. “Who’s to say that a sales person that sells another product or service can transfer their sales skills to your industry and be successful? These sales skills are not always transferable across industries.” I agree. I’ll come to that later in this article.
Here’s some other factors you may want to consider when hiring people from your competition, none of which are show stopping reasons not to, but should be strong considerations.
1. Large expectations Often someone who moves across from a competitor is expected to bring their clients with them. This is rarely a realistic outcome. Sales people can find themselves in a difficult position when telling a client “I know I said that ABC & Co’s product was the best in the market, but this product is really the best product on the market right now”. This is just one of the many obstacles that a sales person is faced with when attempting to bring a client base across. If they are successful in doing so, due to some form of loyalty or relationship with the sales person themselves, then how long will it be before they take these clients to one of your competitors when they move again?
2. Longevity and Loyalty What did you offer to the sales person to encourage them to move from a competitor to your company? Was it money? What ever it was, how long will it be before another of your competitors offers an even better deal? They’ve already told you they will move for better conditions, so what’s stopping them from moving to one of your competitors when they receive the next head hunt call? You may have a good answer to this. Let’s hope you do.
3. What do you like about the way your competitors do business? Or more importantly, what don’t you like? I say this because you are potentially going to spend the next few months debating with your new recruit over the best way to do things in your industry and finding your company’s values are continually undermined as your new starter struggles to break long formed habits. This inability to conform to your company values may spread to other staff. Before you know it, your company’s ‘way of doing things’ has been diluted and begins to resemble that of your competition. Of course I’m being a little dramatic here as these issues can be averted if managed correctly. But this scenario can sneak up and catch you unawares over time if not managed closely.
Now, let’s say you knew how to select sales talent from outside of your industry, talented sales people capable of performing as well, if not better than those in the top 20% of your industry, who could successfully make the transition. If this were the case, you could select from a significantly larger pool of candidates. You could actually afford to select exclusively from the top 20% of sales professionals in Australia, as there would be so many more available to you.
So, am I saying not to hire people from your competition? Not at all! In fact, if you can manage the above factors and continue to attract the very best of your industry to your company, you’re obviously on a great path. However, in reality this is rarely achieved. What you can often end up with is a team of sales people from your competition, made up of your competitor’s left-overs. Let’s face it, they won’t easily let go of their top performers.
What I’m saying is, hire people that represent the top 20% of sales people in Australia. Hire great sales people. If they happen to have worked for a competitor, that will be an advantage in getting them up to speed earlier. But make sure you hire on skills and competencies, not on whether or not they have worked at your competition. Therein lies the challenge! How do you qualify skills and competencies in an interview? What skills and competencies are most important to qualify? And furthermore, not every selling environment is the same and just because you are a great sales person in one industry, doesn’t mean you can transfer these skills to any industry. In my experience, many sales managers simply have not been given the knowledge and training to do the following:
1. Identify the critical environmental selling factors that exist in their industry that will most certainly exist in a selection of other industries. These factors can be used to determine other industries to consider sales talent from, thus significantly widening the talent available to you when making a hiring decision. These factors may include such things as
value of sale,
length of sales cycle
market segments targeted
level of decision maker they are selling to
product or service technical similarity
commodity Vs value selling
structure of the sales process These are among many environmental selling factors to be considered when deciding if a person’s sales skills are transferable to your industry.
2. Some sales managers lack the knowledge to accurately identify and isolate the skills and competencies required of a sales position in the company.
3. Of those that can identify the requisite skills and competencies, most have not been given the knowledge and training to conduct an effective interview, incorporating situational and behavioral questions to qualify the vital skills and competencies.
After all, when in your sales career did your sales manager or mentor sit you down and teach you how to do these things? It simply doesn’t happen. We learn to rely on gut feel and instinct, but these things alone have brought many a sales manager undone. Qualifying sales people in an interview remains a real challenge for most. Add to this that they are interviewing sales people! Even a mediocre sales person can normally sell themselves and build rapport. Now, if you are a Sales Manager hiring right now, I certainly don’t admire your position if you are using gut feel and intuition as your key guide.
Over the past 10 years, I have interviewed over 3000 high level B2B sales professionals. I now work with sales directors, mentoring them in the development of robust, successful sales recruitment strategies; from identifying required skills and competencies and formally documenting them, through to sourcing, screening, interviewing, assessing and securing high performing sales talent. We also show sales managers how to use highly sophisticated assessment tools to benchmark existing sales performers within their organisation, enabling them to judge incoming sales talent based on benchmarks created from their top performing sales people.
Let me leave you with this thought. If your sales team was made up of the top 20% of sales people in Australia, what would your sales team and your sales management career look like today?
We’ll be releasing a white paper later in the year to help guide sales leaders through the maze of recruiting top performing sales people, so watch this space. In the mean-time, I’m happy to talk further if your sales recruitment strategy could use a fine tune or perhaps even an over-haul. My email address is steve.ludlow@ludtec.com.au.
Steve.
