Part 11: How Small and Mid Sized Firms Grow

In this part of the series: How Small and Mid Sized Firms Grow discusses how to hire, manage and motivate sales reps, account reps and business developers.

In most all companies everything starts with sales. Unless you have a monopoly, work for the government or have an endowment you need to obtain and retain customers and clients. In some organizations sales is done via marketing such as advertising, emails, or some other indirect sales approach, but this is still a sales function. Others use good old fashioned sales tools such as telemarketing, field sales calls, networking, sales seminars and the like. We are not going to deal with the pros and cons of theses approaches, but rather what it takes for the person in sales to do their job well. That means to obtain and retain customers and clients by whichever means are used. Customers usually connote someone who buys your products or services; a client usually means having a closer relationship and some degree of loyalty. Please note that in this brief commentary we can only provide some highlights and this is far from all there is on this subject.

Here are some facts to bear in mind when thinking about hiring and retaining the best sales reps:

  • The average turnover rate of sales reps is 26%
  • 10% of the sales force is actively disengaged
  • Jack Welch’s, the highly effective chairman of GE terminated the bottom 10% of his Reps each year
  • The total cost of replacing a sales rep is 38% of their salary
  • The top ¼ of sales reps generates 57% of new business, as the lower ¼ lost more business than they gained

HIRE So what does one need to do when hiring good sales reps? Many companies find that referrals from existing staff tends to be a very good source as they already fit the mold and are likely to have acquaintances with similar traits. There is also no substitute for in depth interviews to get beneath the veneer of someone who makes a good first impression, although companies like Google take this to an extreme of a dozen interviews or more.

TRAIN When bringing someone new onboard manage and train them in the ways that fit in well with your culture and current methods. Someone new trying to change things that are already working well does not usually work. Train new sales reps along side an experienced solid producer, bring them along slowly and monitor their productivity and efficiency. After they understand your organization they should then be able to make positive changes to the ways things are done.

MOTIVATE Everyone needs something to turn them on. For some it’s money, others recognition, others it’s the knowledge of a job well done, others it’s competition, etc. For sales reps it is usually a blend of these with money being the primary item, with a healthy mix of recognition and perks. We recommend having a modest base with a high commission, usually with steps and risers with higher rates for the best people you can’t afford to lose.

Our next blog will discuss hiring, managing and motivating recruiters.

To see all articles in this series please go to

Optimal Management is the premier management consulting company to the staffing industry. We act as mentors to owners and managers to maximize their sales, profits and value of their company. We become an extension of our clients operations and are there for all of their staffing and business needs, from sales, marketing and compensation plans, to finance, M&A, general management and everything in between.

We welcome your questions as to personal and business challenges you face in order to grow.


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