SI Review: August 2012

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Selling on Steroids

Ways to enhance performance and increase sales

By Craig Johnson

From its inception, the staffing industry has been driven by sales. How to sell harder and better than one’s competitors has kept many industry professionals up at night. Today, we are proud to present results of a survey to help our readers with their sales force management. From selecting salespeople to approaching customers, the “2012 Staffing Industry Sales Force Effectiveness Survey” sponsored by Monster and conducted by Staffing Industry Analysts in conjunction with Towers Watson, a consulting company, highlights a few techniques employed by high-growth staffing firms.

The report is based on a survey taken among staffing industry executives across different segments.

High performing staffing firms taking part in the survey were defined as those with revenue growth of more than 25 percent over the past three years. Here are the sales practices that helped set them apart from low-growth firms, which reported revenue growth of less than or equal to 3 percent over three years.

Selling Smart

  • Actively use cold calling to generate sales leads.
  • Pay for performance: Top performers get the most incentive compensation.
  • Hire sales talent right out of school.
  • Make effective use of customer relationship management (CRM) software to manage the pipeline of sales opportunities.
  • Identify skills and behaviors most needed for sales success and develop recruitment, selection and performance management practices based around them.

Here’s a deeper look at those techniques:

Cold Calling

It was a bit counterintuitive to find cold calling on the list of effective sales practices of fast-growing staffing firms. Some consider cold calling old school.

However, 54 percent of high-growth “cold calling of potential clients by salespeople” ranked as one of their most important sources of sales leads. In comparison, 33 percent of low-growth staffing firms said the same.

“Cold calling is an appropriate tactic for acquiring new business when the customers’ buying process is transactional,” says J. Mark Davis, a senior consultant at Towers Watson who worked on the survey. “In that context, it was a fact that a lot more of the high-growth firms cited cold calling as the No. 1 source of sales leads.”

Further, “I think what it shows is simply a penchant for being more proactive on the part of the sales force in terms of making something happen instead of waiting for the phone to ring,” he says.

Pay for Performance

When it came to rewarding top performers, high-growth staffing firms felt they did a better job than low-growth firms.

The survey found that 51 percent of high-growth staffing firms thought they had “significant strength” with alignment between pay and performance. In comparison, only 37 percent of low-growth firms did.

“Aligning pay with performance generally implies not only paying incentive compensation for the right behaviors and results, but also that the best performers earn the most pay,” according to the study.

Davis says that in organizations where the selling role is fairly prominent, top performing salespeople can earn two to three times the amount of incentive pay over an average performing salesperson.

Most people get into sales, at least in part, because the deal with the company is different from other types of employees, Davis says. More of a salesperson’s pay is at risk, but the upside is the possibility of greater reward.

Paying top performers significantly more is important because the potential for higher pay helps attract top performers to an organization and it helps firms retain the top performers they already have, Davis says.

School’s Out

Also, 18 percent of high-growth staffing firms responded “we tend to hire salespeople with little experience/ directly from school” when asked from which industry they tended to hire the majority of their salespeople. That compares with 8 percent of low-growth firms that did the same.

Davis says it could be that fast-growing companies are interested in really training somebody in their way of selling and their culture rather than bringing in more experienced people from elsewhere who may have more defined expectations about how things should be done.

Low-growth firms were more apt to hire from industries that employ the people they place, with 18 percent saying so, compared with only 6 percent of high-growth firms.

And 35 percent of low-growth firms hired from within the staffing industry, compared with 22 percent of high-growth firms.

CRM Software

When asked which best describes their company’s use of CRM software high-growth staffing firms also felt they did a better job than low-growth firms.

Thirty-three percent of high-growth staffing firms reported “we use purchased CRM software and utilize it effectively,” compared with 18 percent of low-growth firms.

In fact, low-growth firms were more likely to not use a CRM at all at 22 percent compared with 12 percent of high-growth firms.

Skills and Behaviors

High-growth firms also identified themselves as doing well on competency-based candidate selection for sales employees. Twenty-two percent of high-growth firms cited it as a “significant strength” compared with only 11 percent of low-growth firms.

Of low-growth firms, 48 percent described themselves as only “adequate” as far as a competency-based candidate selection process compared with 31 percent of high-growth firms that says the same.

“Competencies define the skills and behaviors required for success in a given role; having them well-defined tends to improve the effectiveness of the recruitment and selection process,” according to the report.

Follow the Growth

Overall, for those following the growth, the survey found that high-growth staffing firms are meaningfully better at acquiring the best talent by using competency-based selection criteria, differentiating on the basis of performance, using cold calls, more effectively using CRM, were more likely to use behavioral based interviews to identify sales talent and less likely to hire right out of school instead of from within the staffing industry.

“High-growth companies in the industry really focus on selecting the best talent and rewarding them well,” according to the report.

And the time may be right to follow their strategies.

The survey also compared firms by size and by segment served. Staffing Industry Analysts’ corporate members can download the full report by going to www.staffingindustry.com.

Craig Johnson is managing editor, staffing publications, at Staffing Industry Analysts. He can be reached at cjohnson@staffingindustry.com.

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Methodology

The survey took place from Jan. 18, 2012, through Feb. 6, 2012. Of the 423 respondents, 393 reported the growth rate of their firms. It was conducted online with phone-based interviews supplementing the responses.

Senior executives comprised the majority of respondents. Eighty-one percent of respondents were in CEO, chairman, president or chief operating officer roles.

Thirty-two percent of the respondents came from industrial/logistics staffing firms, the highest percentage. Thirteen percent were office/clerical firms, 12 percent were information technology staffing firms and 10 percent were healthcare staffing firms. The rest came from other segments or left the question on segments blank.

The number of salespeople employed by firms in the survey ranged from 2,000 to one, but the median number of salespeople was three. Approximately 75 percent of respondents reported having five or fewer full-time salespeople. In the survey, 375 respondents reported the size of their sales forces.

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