Over the 15 years I owned Newfangled, I made the mistake of hiring a salesperson more than once. The idea of a dedicated employee whose job is to find clients and who operates mostly on commission was too attractive an opportunity not to bite on. But it never worked out. There are many reasons why a creative services firm should probably not hire a salesperson. I’ll give five below.
But before I give those reasons, I need to make an important qualification regarding the distinction between sales and marketing. Sales, properly speaking, is a process of qualification, persuasion, and negotiation that takes place after a prospect indicates their interest in your services. Sales therefore should be distinguished from marketing, which consists of the efforts we make to find opportunities for selling. So if you need a salesperson to help you qualify, persuade, and negotiate an abundance of leads that you can’t handle yourself then yes—maybe you should hire someone for sales. (Although I’d suggest considering an existing employee with proven client-facing skill, who knows your services inside and out, for that role.)
But most of the time, when owners of design and marketing firms are thinking about hiring a salesperson, they do so in the hopes that this person will generate new leads and find new clients. That activity, properly speaking, is what marketing is for—and hiring a salesperson before you’ve addressed some key issues in your marketing usually is an exercise in futility.
Here are five reasons why hiring a salesperson before addressing marketing usually fails.
- Tenacity cannot make up for poor positioning. The biggest marketing challenge common to most design and marketing firms is a failure to identify their key area of expertise. Instead, we want to be able to offer anything to anyone so long as they have a decent budget. Unwillingness to focus on a key discipline, and resistance to applying that discipline to a particular industry, is the basic marketing problem most agencies face. It may well be that a talented and aggressive salesperson might network, email, and make calls with more tenacity than you, but unless he or she has a focused target to pursue, most of their effort will be wasted. But if you do focus your firm, it will become much easier to find prospects—and under those conditions, why would you need to hire the salesperson in the first place? Besides, there are other reasons why you might want to reconsider this idea.
- Compromises in prospect qualification. Commission structures are attractive for business owners because they limit risk. They also provides motivation for the salesperson. However, commission structures also build incentive for the salesperson to close as much business as possible. This incentive often compromises important prospect qualification standards. When you feel that a prospect, though willing to pay your fee, is not a good fit, the salesperson loses out on their commission. Owners may feel pressure to say “yes” to unqualified prospects—even when they know they should be saying “no.” Note: If the idea of saying “no” to a prospect that is willing to pay your fees seems unthinkable to you—there may be other problems to address.
- Over-promising. The practice of under-promising and over-delivering is a wise principle. It leads to satisfied customers and a strong reputation in the marketplace. But commission based sales motivate the other way. Commissions lure salespeople to promise whatever is needed to close the sale, and account managers and producers end up holding the bag. As a result, though a salesperson might increase your overall revenues, if those clients are unprofitable, you’ll wish you had lower revenue—with more profit in the end.
- Combining project management and sales. Sometimes when an owner and potential salesperson are negotiating over the ratio of commission to base salary the idea that the salesperson might also function as an account manager for the clients is considered. The owner thinks this will pad their commitment to their base salary. But in practice sales activities and client service activities create conflicts. A salesperson should be focusing their time and energy on finding new clients—networking, calling, emailing, etc. A project manager should be as accessible to the client as possible. A salesperson functioning as a project manager is not selling or building their commissions. A project manager who is often out of the office or on sales calls will frustrate clients. If you hire a salesperson, you need to let them sell.
- Controlling growth. A commission based salesperson is and should be motivated to close as much business as possible and make as much money as possible. While this is generally also the goal of the business owner, in reality controlling the pace of growth can be much more complicated. There may be stages in a company’s growth where the business owner might focus on improving profit margins on existing business rather than adding more new business—or at least slowing down the pace of new business. While these considerations are appropriate for the owner, the commission based salesperson will rightly be frustrated when he or she hits the ceiling for bringing in new clients.
For all these reasons and more, I found that hiring a salesperson for the purpose of finding new business or generating leads was never very effective. If you are struggling with new business, the solution is more than likely to give more attention to marketing and the hard work of positioning your firm. Hiring a salesperson just won’t get that job done.