Hire Locally. Don’t Screw it Up.

Every kiwi business person who has done business in the US has a hiring story.  

And not one of the good ones.

The most consistently made mistake in the US market is hiring the wrong people.  Why?

I have a theory (from 20 years of living in the US) that Americans – and in particular the genus ‘American Salesperson’ are all good at selling at least one product.  Themselves. We fall for it every time – the confident, smooth, well-groomed and super friendly guy (usually) who talks fast.  

Sales in the US is a strong professional career choice.  Good salespeople in the US make very very good money when they are successful.  But we usually hire the person who is great at selling themselves, and who is a bum when it comes to selling your great products and services.

The difficulty of making great local hires often leads New Zealanders to ‘fly in’ to the market to do the selling themselves.  This might work in the short term, but it’s not sustainable. You need to build a local team.  

So how can you avoid making these mistakes?  Here is where about 20 years of pattern matching comes in:

• Great salespeople are rarely out of a job.  If you want to hire a great salesperson, you may need to steal them from someone else.  If a salesperson is out looking for a job, you will need to dig into the reasons and get comfortable that they are not just missing their current quarter targets and see the writing on the wall.
• To find these unicorns (and a really great great salesperson is a unicorn), you will need to do a lot of legwork on Linkedin and through contacts in the industry, and possibly hire a recruiter.
• I’ve never seen a resume where the sales rep didn’t hit their numbers out of the park.  It seems that everyone is above average! In a couple of cases, I have asked to see their W2 if I’m in real doubt.  A W2 is a tax filing form provided by an employer that details their income. It can’t be faked. Note that in some states you can’t ask a prospective employee what their current salary is – so make sure you are within the law before you ask this.  At the very least you need to dig in to the information: what was the quota; how was it structured; how was it paid; what deals put them over the top; who were the customers and what products and services were sold. Dig in!
• Digging into the information means talking with references.  I often see this task handed off to HR to ‘check’. If you do that, you will get platitudes.  You need the truth, so you need to get on the phone and ask some open-ended questions. In the litigious US you will most likely not get any flat out negative statements, but I have found that you will get a good understanding by listening carefully to what the reference says – and what they don’t say.  At the least they can confirm whether the person hit their numbers, and how they hit their numbers (many small deals, one wild swing at the fences, deals they legitimately closed or deals that they were just one member of the team).
• Don’t overpay base salary.  A Kiwi company once told me they paid a US sales rep a 200k base salary until they realised they had made a mistake (all numbers in this section in USD).  Sales packages in the US are much more highly weighted to commission than we are here in NZ.  
  • In the Enterprise Technology space a good senior rep (ie one with 10-15 years of success) is likely to make 100k to 150k in base and between 2 and 3 times that number on target – without a cap.  I have known (and employed) reps making well in excess of 500k, and in some rare instances, over 1m. But their base was still in the 125k range.  
  • Mid-range reps and reps in non-tech industries are more likely to be in the 75k-100k base range, and juniors as low as a $40k-$50k base, with 2x – 3x that base when they hit target.   
  • A great enterprise sales VP who will build a sales team and get you from 10m to 50m in revenue will be asking for around 250k to 300k in base and double that on target, plus equity.  You are buying a sales team architect/engineer here – they will design and build a team to execute on your sales vision. And if you get the right one, they will be worth it, and some.
• A great recruitment and leadership partner like Ben Anderson can help with advice on salaries and recruiting.

The bottom line is that you will have to spend more time on hiring in the US than you do in New Zealand, and be particularly sceptical of US sales hires.  Recognize that your pattern matching algorithms don’t work in the US, and that your cultural queues and biases are not appropriate to that market.  

Don’t regret a single dollar that you pay to a great salesperson, regret every penny that you pay to a bad one.