Once again we’re digging into the Vantiv partner email bag to see what’s happening on the front lines of our channel. We’ve done that on this blog not once (creating a candid org) but twice (moving to SaaS) this year and received great feedback each time. Today we feature a recent exchange I had with the CEO of a POS reseller about best practices for paying, onboarding, and managing a new outside sales rep. This is one of the most common questions I hear in my role as a Reseller & ISV Business Advisor for Vantiv partners.
To protect the reseller’s privacy, all names have been omitted (except mine) and some minor edits were made to the text. But other than that, this is the unvarnished truth about running a reseller business in today’s ever-changing channel.
I’m about to hire an outside salesperson to sell point of sale systems locally, namely to restaurants. We have not hired and deployed an outside person in many, many years because we were always growing from inside or referral. Our current salesperson came from the industry and no training/tracking was required.
We are looking for someone that will generate leads, not work existing accounts much and not leads generated by our marketing efforts. So the specific advice I require is:
- Pay scale including expenses, etc.
- What should my expectations be for performance?
- What should I do to track the efforts?
And to be clear we want to hire someone that is going to cold call restaurants both in person and via phone, email, etc. We have the expertise here to do the demonstrations. In the beginning, we are just looking for more contacts and leads, not for this person to be a restaurant POS expert. Let me know what you think.
Here was my reply to this high-initiative, growth-oriented reseller:
Thank you for the note. First, I wanted to say I think you’re making the right move looking for someone to train vs. requiring the new hire to be a POS restaurant expert. This strategy will open up your “hiring funnel” to a much wider range of candidates. As you said, understanding POS and restaurants is trainable … having high character, a strong work ethic, a positive attitude, etc. is not trainable.
Pay scale including expenses etc.
- Base salary with a non-capped bonus/commission structure is most accepted among resellers.
- Many resellers absorb this expense by offering an approx. $30k base and a very high commission rate early in their tenure. Future years would have a lower commission rate. That way if the candidate does not generate big sales, you are not out a big expense.
- I’ve seen that many resellers have to offer a first-year target of $60-$80k to attract “a good guy.” You could go lower if you are hiring a less experienced person and will train them for the long-term. Future years could need a target of $100k or more/equity to compete with other resellers.
- These figures are not hard-and-fast; it depends on the cost of living for your area and their experience level. The key is to show them the opportunity while still enabling them to make a decent living while they build their sales.
- Many resellers also offer SaaS/residual bonuses (e.g. 25% commission of the 50% in payments revenue the reseller receives).
- Mileage is typically covered. I recommend separating this from their pay – don’t just say “we will pay you X dollars per month for mileage.” Require them to submit a reimbursement form every week or two. That will help you manage how much driving they’re doing – too much, too little, or just right.
- If you feel that’s too much management overhead for you, I’ve seen other resellers give the outside rep a stipend each month via a gas card to cover the expense. The fixed fee allows you to control your expenses and doing this via gift card avoids confusion that the money is part of the rep’s base pay.
What should my expectations be for performance?
- Because this appears to be a new position, I’m thinking you don’t have a good apples-to-apples comparison. So I think it’s key to make your best guess as to what would be appropriate during their learning curve (it would take approx. 12-18 months for them to get to full speed) and then stay close to the person so you can make adjustments appropriately.
- Let them know this is a new position and you need to have a trust/cooperation between the two of you to set the appropriate expectations. I know that seems open-ended, but too often I’ve seen sales management get burned by guessing too high a quota and losing the salesperson … or they guess too low and don’t get adequate performance. Make your best estimate but inform the candidate that you may adjust the targets based on data and what’s appropriate.
- Resellers I have engaged with hope to get 1-2 new sales in the first three months and begin to see steady/growing sales six months in. It often takes about 12-18 months to reach full competence and to hit the appropriate sales cycles.
- In the interview process, you need to get the candidate to commit to regularly increasing their activity level until you are satisfied. Again, to me that is more honest/realistic than guessing a number.
What should I do to track the efforts?
- The key to tracking their efforts is staying close to them for an extended period of time. I’ve always said “there’s no substitute for a competent manager staying close to a situation.”
- Early on, this person would need to shadow you and/or your top salesperson to fully understand how you want them to engage with customers. The inclination might be to have them sell – start producing ASAP – but the shadowing plan I’m suggesting is an investment in them (and your company) long-term.
- I would spell out a 13-week training program that details your expectations of them for each week. At the end of each week you will meet to review how they’re tracking against the training program.
- I would also conduct a regular meeting (monthly is a fine cadence) to review the job description and how they are pacing against it.
- If you have PSA software, it should have functionality where the salesperson tracks their sales activities (phone calls, stop-bys, emails, appointments, demos, proposals), and you can gain insight into what they’re doing through that.
- If you don’t have that software, you should develop some forms for the categories I mentioned above that the salesperson needs to complete on a daily basis.
- Reviewing these activity reports, along with updates on their “sales funnel,” would be the foundation of a weekly meeting with them.
- And back to my original point about getting close to the situation, I would call some customers the reps is calling on to see their perspective of the salesperson. On more than one occasion, I’ve caught a salesperson misrepresenting who they were talking with.
If you would like to connect for a phone call, just let me know and I would be happy to schedule that. Thank you for being a Vantiv partner & have a tremendous day!