The Sales Dodo: Design an Offer That Commences the Sales Marriage
October 28, 2008
The offer stage of a sales talent screening program takes preparation and finesse. But the good news is that there are many parallels to sales that can be applied to this phase.
By Lee B. Salz
After a lengthy screening process, your hiring committee feels they have found the right sales candidate for the company. Now comes the tricky part, how do you design an offer and go through the offer stage of the process without damaging the relationship with the candidate?
Many companies are not prepared to go through the offer stage of the hiring process and wind up damaging the relationship with the candidate. This leads to one of two unfortunate conclusions: Either they lose the candidate or the candidate comes on board with scar tissue. Applying some of the best practices from the sales world into a sales talent screening program helps to avoid that scenario.
Preparing a Qualified Offer
The offer stage of the hiring process parallels the proposal phase of sales. Best practices in sales say that you don't present a proposal until a thorough needs analysis has been completed. If a salesperson is presenting a proposal to a prospect, he has acquired the information needed to design a solution, has discussed budget, has a full understanding of their solution requirements and has set an expectation on pricing. This is certainly the case if the sale person is going to be successful in winning the account.
When looking at this process in contrast to the offer stage of the sales talent screening program, many of the same best practices from sales hold true. During the screening process, information needs to be gathered from the candidate to determine their financial requirements. Unfortunately, many sales talent screening programs focus exclusively on screening the candidate for "fit" but do not consider the needs for the offer phase of the process. This leads to a last-minute scurry to mine the information from the candidate or they design the offer blindly. Neither of these are best practices.
In sales, it is said that if you are going to lose, lose early. This prevents you from making a huge investment in a relationship that will not generate revenue. The parallel to screening sales talent is to understand the financial requirements of the candidate early enough to stop the process before over-investing in the relationship. There is no point in continuing a process with a candidate that requires a compensation level 25% above what you can offer. This probably seems logical, but hiring executives rarely focus on this as a de-selection element early in the process.
Just like discussing pricing with a prospect, the financial needs discussion requires finesse. The candidate knows that you are asking questions about their financials, just like a prospect knows a salesperson is fishing for budget information. The better-skilled salespeople tell their prospects, "I don't want to waste your time by getting you excited about a solution that will not fit in your budget constraints…" In much the same way, this discussion can be had with the candidate, "I don't want to excite you about an opportunity that might not be a match for your financial needs. As you look at making a change in position, what thoughts have you given to your compensation requirements?"
With continued finesse, you can dig further into the mix of salary versus commission. Some candidates may rebuff this discussion as they feel the information will be used against them. In some instances, they are justified for having that concern. Hopefully, that is not the case in your company. (We'll come back to this point later.) The bottom line is that the two goals of this phase are to gather information that allow you to formulate an offer and to de-select those candidates whose requirements exceed your financial package.
 Making the Proposal
In sales, the proposal phase should not be like a magic show. The prospect should not be shocked by what is included in the proposal. In essence, the proposal is the documentation of what has already been discussed. No surprises. The same holds true for candidates. The time to review the compensation plan details is not after they are hired, or even at the offer stage. The compensation plan should be reviewed at the point where you have a genuine interest in pursuing the candidate, and when they have a complete enough understanding of the company that they will be able to comprehend the compensation plan.
One of the core requirements associated with any process is that it is measurable. The offer phase of the sales talent screening program should be measured statistically to determine effectiveness. The key statistic is number of offers made versus ones that are accepted. If the acceptance level is less than 80%, the process should be reviewed by asking the following questions.
1. At what point of the process are the candidate's financial requirements reviewed?
2. When it is known that the candidate's financial requirements exceed the package, is the candidate removed from the process?
3. At what step is the compensation plan reviewed with the candidate?
4. In what level of detail is the compensation plan reviewed with the candidate?
5. How often is the initial offer to the candidate rejected, and subsequently, negotiated successfully?
The last bullet in the list above ties back to my opening position about damaging the relationship. Again, this ties back to lessons that can be learned from sales. Many years ago, a procurement training specialist shared a pearl about the counsel he gave to salespeople who asked about pricing strategy. He said, "Provide us with the best pricing that you feel comfortable providing and either way you are happy." This always puzzled sale people so he explained further. "If you provide your best pricing and are selected, you are happy because you won the account. If you are not selected because we found lower pricing elsewhere, you are happy because you would not have been happy at that price point. Again, either way you are happy."
Consider this when making an offer to the sales candidate. Develop an offer based on what was learned from the candidate that represents the best offer you are willing to make. Early in the process, tell the candidate that you don't negotiate offers, but rather put your best offer on the table upfront. It demonstrates a professional message to the candidate and reduces their fear of attempts to lowball them. When companies negotiate offers, while they may win the candidate, they damage the relationship. This person is on-boarded with the worst scar tissue of all—a lack of trust. The salesperson will always be on the look out for the company to try to cheat them.
As with any component of the sales talent screening process, preparation is the key to success. Organize your team and design a process that achieves your desired results. This will allow you to create long-lasting, fruitful sales marriages.
Lee B. Salz is a sales management guru who helps companies hire the right sales people, on-board them, and focus their sales activity using his sales architecture methodology. He is the President of Sales Architects, the C.E.O. of Business Expert Webinars and author of "Soar Despite Your Dodo Sales Manager." Lee is an online columnist for Sales and Marketing Management magazine and the host of the Internet radio show, "Secrets of Business Gurus." Look for Lee's new book in February 2009 titled, "The Sales Marriage" where he shares the secrets to hiring the right sales people. He is a passionate, dynamic speaker and a business consultant. Lee can be reached at lsalz@SalesArchitecture.com or 763.416.4321.
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