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Our research shows that when it comes to sales reps, one size does not fit all: The characteristics of high performing sales reps depend critically on the sales model. There are, of course, certain skills and traits that every good salesperson should have. But the characteristics that separate good from great salespeople are different for those selling into single-industry vertical markets and those selling functional products into horizontal markets that cross several industries. Startups and growth private equity companies that find and keep great salespeople—by recruiting for the right personality traits, training them in key skills, and maintaining a culture in which they thrive—will be at a significant advantage.
Having a great sales team is critical to driving growth. Sales efficiency is, after all, the growth engine—the “oxygen,” in Bessemer Venture Partners’ words—for tech firms. As Peter Kazanjy, the Co-Founder of TalentBin put it: “The ability to attract, hire, and onboard successful sales reps and execs is an enormous competitive advantage, especially if you’re up against ossified incumbents.”
Yet many growth stage ventures do not perform this basic task very well. We surveyed 44 growth companies with an average of $35 million in funding and $40 million in revenue. More than 40% of these companies reported that at least half of the sales reps they hired left within three years. And successful reps often are hard to retain: 36% of our survey respondents reported that more than 10% of their highly successful sales reps left within one year of joining the company. This high churn is costly. Companies must put more effort into the recruiting process to yield successful reps and then must go back to the well when they can’t retain those reps.
So how can a company attract and retain the right sales reps for their business model? To answer this question, these 44 growth companies participated in our proprietary Sales DNA survey, which asks sales reps about their particular skills, such as networking, prospecting, resource management, and product knowledge; their “intrinsic” personality characteristics, such as extroversion, diligence, and empathy; what motivates them—rewards? professional growth?—to succeed; and the cultural enablers of success in their company, such as entrepreneurship, strong leadership, and the like. Separately the companies provided us with a ranking of their sales reps from strongest to weakest performers. We were then able to identify the characteristics that most distinguished the highest performing reps from the weakest performing reps; in other words, the secret sauce—the characteristics that high performing reps have that their weakest team members don’t.
The big surprise? We discovered that one size doesn’t fit all. Our analysis shows that what differentiates the high performing reps—and what growth companies should therefore look for and cultivate when building their sales forces—depends on what and to whom they are selling. Sales reps selling an industry specific or ‘vertical’ solution have very different challenges than reps selling a ‘horizontal’ solution such as HR services solutions. The capabilities they need and their sources of motivation reflect these differences,.
Vertical reps who sell into particular industries must have deep knowledge of those industries. Their job is to convince skeptical customers, who think they are the experts in their own businesses, that they need a new product. These reps therefore need to convince their prospects that they know the business better than the prospect does. In this environment, dominance is the key personality trait that separates high performers from the rest of the team. Reps here must be able to take charge, lead a conversation, and sell with confidence. They enjoy being the center of attention, and can hold court with customers. They are goal-oriented, focused on convincing customers that they know the customers’ business even if their company is young or lacks name recognition. And they have strong intrinsic problem solving intellect that they use to think on their feet and show customers how their product is relevant.
Beyond their personalities, high performing reps excel relative to their peers in certain key skills. They are considerably better at building trust-based relationships that enable sales. They listen, pick up on customer cues, and are seen as authorities in the field. They are good at handling objections, and know the sector well enough to anticipate and respond to concerns or issues that customers raise, and to tailor their offerings in turn. Finally, they have strong time management skills, know when to leverage specialists to communicate their points effectively, and have expertise in account planning, driven by an ability to gauge potential targets accurately and develop their strategies accordingly.
While most reps are motivated by financial rewards, top reps are also motivated by a sense of autonomy. They derive satisfaction from having ownership over their work much more than the rest of their team.
Horizontal reps have a very different challenge. They don’t specialize in an industry. Instead, they pursue multiple verticals simultaneously. With a much wider funnel for generating and converting leads, they must excel at both building the network to open the top of the funnel and the skills to prioritize the pipeline so they aren’t wasting their time. The persona of the high performing horizontal rep therefore is quite different from the high performing vertical rep. In terms of personality, the highest performing horizontal reps have strong problem solving ability and enjoy challenge. They are persistent and competent. They know their products and solutions are helpful for all sorts of clients and will put in the time and effort to craft a compelling value proposition for each customer. At the same time, they need to be—and are—comfortable with uncertainty. They are emotionally stable, dependable, and resilient, important traits when you are pursuing, and likely to be rejected by, multiple leads.
The skills that most differentiate high from low performing horizontal reps are deep knowledge of their products and features, along with the ability to ask customers the right questions and answer their objections. Together, these skills enable the best horizontal reps to craft winning proposals for customers across multiple sectors. They are also highly skilled in pipeline management—building a strategy, identifying leads, and tracking those leads to a closing even without a market base defined by a single sector. They are much better lead management, ensuring they aren’t wasting time pursuing prospects that aren’t going to convert into customers.
Top horizontal reps are motivated by competence—they seek to demonstrate excellence and gain satisfaction from knowing they have what it takes to do a good job. They want to be the best in their field, and to expand their portfolio of duties and responsibilities.
Understanding the makeup—the “DNA”—of high performing growth sales reps allows companies to design their recruiting and retention programs to identify, hire, and retain the best reps. Of course, all companies need to hire salespeople with certain traits that constitute a minimum bar—things like product knowledge, assertiveness, and closing ability. But our analysis reveals the differentiators that make salespeople in different cohorts not only good, but great. Growth companies need to be clear about which sales model they are following, and then they should tailor every stage of the sales recruiting and retention process to take advantage of the distinctive characteristics that predict success in that model.
They first have to find the right people. This is especially true with respect to intrinsic traits, which generally cannot be taught. Vertical companies will sometimes, for example, turn away dominant personalities because they worry about fit within the startup team culture. Our research suggests this is a mistake. Dominant personalities are critical to success in vertical sales environments. Similarly, horizontal companies should not just look for great salespeople, particularly from big competitors, but should screen for reps who are intellectually and emotionally flexible enough to handle the stress of being a product advocate in a diverse selling environment.
How can growth companies screen for these traits? At the very least, they should consider more widespread use of interview guides and personality tests. Only 25% of our respondents reported using an interview guide, and only 25% reported using a personality test as part of their interview process.
Sales force recruiting should also take skills into account—here too an interview guide is an especially important tool. But unlike intrinsic personality traits, skills can be taught. Training is therefore a critical part of developing a high-performing sales team. Yet in our study, a majority of skills were not covered in coaching at least half of the companies we surveyed. This is a critical gap. Increasing the coverage of in-house training and coaching programs could deliver significant benefits by taking those reps with strong intrinsics and doubling down on inculcating in them the skills needed for success, like trust building for vertical reps and pipeline management for horizontal reps.
Finally, our insights into what motivates high-performing reps suggest that companies can improve their retention of such reps by making sure that they have a company culture and incentive structure that aligns with what motivates their high performers.
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Every company that participated in our survey had room to improve. Some companies, for example, got the intrinsics right—they were good at screening for and hiring the right people—but then failed to develop in their salespeople the skills that matter. Others had the opposite problem. But our conclusion across the board is that growth companies are wasting valuable resources in building their sales teams—hiring the wrong reps and not training or coaching them to succeed and incentivizing them to stay.
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In tight funding markets, making the most out of every seller is critical. The prize for getting this right is growth. But doing it right requires executives to be just as scientific and data driven about sales recruiting and training as they are about any core business process like product engineering or financial management. Leaders who embrace the challenge of rigorously finding, hiring, training, and retaining great sales forces will see outsized rewards for their companies.