At this week’s Workshop Wednesday, Lucas Price, former SVP of Sales at Zipwhip and founder and CEO at Yardstick, shares his insights on how to hire and build a high-performing sales team.
When he joined Zipwhip, they were at a quarter million in ARR, and he took the sales team to over $100M before it sold to Twilio for almost $850M. During that time, he wasted a lot of money on failed sales hires and decided to learn everything about hiring sellers.
Sales Hires Have the Highest Failure Rate
It’s a costly problem to have. The distance between top performers and everyone else has never been wider, and most sellers aren’t hitting quota at many organizations. The opportunity cost of a failed sales hire is typically around 80% of their annual quota, and the difference on your top line between hiring someone who succeeds and fails is about 70% of whatever their quota is.
Often, that hiring decision is a half-million to a million-dollar decision. So, set up a process that leads to accurate decisions while not losing to indecision.
As a sales leader, the people you hire affect your career trajectory and the career trajectory of everyone on your team. That’s your legacy as a sales leader. Hiring a salesperson that’s just 10% better will compound. The seller ramps faster and sets new standards for what can be accomplished with your organization.
That small difference becomes huge over time, especially when multiplied across a team of new hires.
Keep Your Hiring Standards High
Interviewing is believed to be the most predictive part of the hiring process, but it actually isn’t. Part of the reason we fail at this is the average interview is only about 10% better than flipping a coin and predicting job success.
If you boil down the easiest, simplest steps for interviewing, there are four steps.
- Consistency
- Scoring
- Behavioral questions
- Work samples
Consistency – ask every candidate the same set of interview questions.
People tend to overestimate their ability to evaluate candidates. What happens is that you’re conversing with one candidate about overcoming objections. Then, you chat with another about prospecting. You try to evaluate them against each other, and as humans, we think we can make that evaluation. We can’t.
You need to have the same conversation lined up for what you’re trying to evaluate.
Scored – all interviewers use a scorecard.
In most interviews, the decisions are made within the first couple of minutes based on how much you like the person. With a scorecard, you may like the person and then get to the scorecard and realize they do not have a demonstrated history of being resourceful or a high achiever.
Using a scorecard reduces a lot of the cognitive bias that enters interviews by breaking down candidates, component by component.
Behavioral interview questions and work samples
We’ll talk more about behavioral interview questions further down in this post. Work samples are the most effective part of the evaluation process. Role plays make the best work samples.
You’ll spend most of your time on the four things above. Other parts of the process are required to succeed and maintain a high hiring standard, specifically:
- Defining traits needed for success in your role and a good plan to get there.
- Having a strong pipeline of candidates.
- Bringing in the right types of candidates.
- Closing top candidates.
These four practices will help you close top candidates by showing you have a well-organized company. But that’s not enough. Top candidates tend to be picky about career opportunities, and you have to provide a great career opportunity for them.
Interview Skill Basics
This might seem remedial, but many people on your team are doing interviews wrong. You should strive to build rapport with candidates during the interview process, so they have a positive experience and are more likely to open up, giving you the information you need to make your evaluation.
Interviewing is the smallest amount of power that sometimes goes to peoples’ heads. You see interviewers trying to show off how smart they are by showing the candidate they’re wrong. “Interviewing candidates isn’t the place to get psych needs met,” Lucas says.
Another critical point for interview skill basics: You don’t need more than four interviews.
Google did some research and found that, before making a decision, all interviews after the fourth one have a 1% chance of changing the hiring decision. The fifth and sixth rarely change anything. You can’t keep sending people through interviews when building an efficient scaling process.
Behavioral Interviews
A more formal name is competency-based behavioral interviews. To do this, you need to start by determining the competencies and traits that lead to success in your role. This isn’t a definitive list of sales competencies. There are lots of variants across sales roles.
The right type of sales experience is critical for many sales roles. Still, Lucas sees many hiring processes that look for the wrong kinds of experience, overvalue the wrong types of experience, or use experience as a replacement for carefully considering traits or competencies.
You see this with entry-level jobs with sales leaders who only hire ex-college athletes instead of focusing more on the traits common in many college athletes.
The Counter to Behavioral Questions Are Situational Questions
Situational questions aren’t very effective, but they’re common. Situational questions are hypotheticals that usually start with “What would you do if…” Interviewers like these questions because they’re easy to evaluate. It’s easy to assess if a candidate got it right, but is that useful?
A situational question might be, “What would you do to get started if you were assigned 1,000 accounts in your territory and needed to prioritize them?” This question might indicate if someone is smart, but they also might have read something smart on the internet. You want someone smart and effective, and finding those people with situational questions is hard.
Rewrite the question above as a behavioral question because you only have four interviews to get it right. Behavioral questions ask for a detailed walkthrough of a relevant situation to the job. “Walk me through a time when you had a large number of accounts in your territory and needed to prioritize them.”
It helps you determine their effectiveness, thought processes into past decisions, and what lessons have been learned.
Don’t ask too general or too specific questions. Interviewers, who are left to their own devices, use way too many questions in their interviews. You lose comparability when you ask too many questions because some candidates are faster or slower than others, so some get more or fewer questions than others.
How many questions should you ask in a single interview? Three.
Example Behavioral Questions
This example is for a sales role that needs to build pipeline. You have the question, the competencies being evaluated, the guidance above applied specifically to this question, and some of what to expect for an answer.
The aim is to have a level of specificity that matters for this role and no more. If the company is selling into a lead-poor environment and the seller will need to build pipeline, then you probably want to eliminate sellers who have never done that.
If they have experience building pipeline, you want to know the details of how they did it so you can evaluate their adaptability and resourcefulness.
This example might be used to sell against established competition and bring a new framework to market. You can’t just fill out an RFP. You have to show buyers there is a new way of doing things and that it’s worthwhile. You want to find sellers who can succeed in this.
The last example of a behavioral interview question is only useful in a specific context. You wouldn’t want to use this question in SMB or transactional sales.
The takeaway? When you think about scaling a process, build out this type of guidance to go along with the interview process. It will scale the interview skills and effectiveness of your organization.
How to Use Scorecards
This example is for evaluating a candidate’s demonstrated history with these competencies and the scoring to go along with it.
Some interviews won’t collect all relevant data, so you won’t score the ones that aren’t relevant. When writing these goals, think about 60 days, 180 days, or even two years from now. What would make you look back and say this was a successful hire or a hiring mistake?
This helps illuminate what should go in the goals. You also want to put the how and why in the goal. What is the goal specifically, and how will you achieve it?
Another thing that goes along with scorecards is the number of items on it. You want to limit it to 3-6 competencies and 4-6 goals. It’s easy to come up with 25 or 30 items that seem essential to you, but you won’t be effective at evaluating all of them, and people will lose trust in the process by seeing the failure rate of too many judgments.
The Most Predictive Individual Step is Role Play
This example gives the candidate info about the pitch and buyer and allows them time to figure out what to say for a cold call role play. After a few minutes, end it and have the candidate self-assess. Share something positive and a room for improvement every time.
Doing this every time lets them know it’s not personal or they did poorly, so always give two pieces of feedback. Then, have them do the role play again and see how they incorporate the advice. You’ll learn a lot about coachability here.
Here is an example of a discovery role play. Provide these three items to the candidate about the scenario. Giving them a LinkedIn profile with ICP and a recording of what a great discovery call for your org looks like allows them to prepare and listen to what good likes for your company.
Key Takeaways
Hiring is the key to sales leadership success. Being great at hiring makes everything easier in sales management. The key takeaways are:
- Analyze the traits that lead to sales success for your company.
- Build an interview plan that includes structured, behavioral interviews.
- Use role plays to predict success.
- Use scorecards to reduce cognitive bias.
