The Answer Is Sales and Sales Growth

Sales is the second most challenging position to fill and has one of the highest turnover rate.

Here are some shocking stats:

It’s morbid, I know. Unfortunately this is the reality for most companies. However companies solving this problem by hiring business accelerators.

It is crucial for any executive to take action when new solutions are born to improve inefficiencies. If not, they will be out of business because their competitors are using them.

We interviewed SeatNinja CEO, Michael Reinero on his experience hiring a business accelerator. SeatNinja is a software product that allows restaurants to seamlessly manage their front of house operations to increase their revenue.

Michael came from a big company background and decided to start his own company, SeatNinja. He heard about business accelerators before but was skeptical on the benefits of having one. Michael took a shot and he shares his experience with us.

Q: Some concerns that many companies have about hiring a business accelerator is the quality of the team. What has been your experience on the quality of having a business accelerator?

Michael found that it depends on the sales rep. His first sales rep Tucker struggled. His second sales rep Tony found his stride right away. “[As an executive] you can’t wait too long. Make sure that you find the right person”. Michael says that executives have control over the quality of who is going to be selling the product. If the first person doesn’t work out, that’s ok. Keep looking until you find the right one.

What Michael is paying for an outsourced sales rep is a little less than hiring his own sales rep. He mentions that when they made the switch from Tucker to Tony, he personally did not have to spend a lot of time training because it was up to the business accelerator team to do so. This saved him time from not having to retrain or look for a new sales rep.

Q: What advantages do you see having a business accelerator over an inhouse team? What are some disadvantages that you see on having a business accelerator team?

Advantages:

  • Ability to swap in and out employees without risk or costs and workers comp
  • Same or lower cost of employee
  • Decrease lead time on employee acquisition

Disadvantages:

  • Manage process remotely
  • Does not have as much control
  • May not have develop a relationship with the person

Q: What do some of your friends think about having a business accelerator team? What do your employees think? Has people treated you differently?

Michael shares that it really depends who he talks to. “The larger companies don’t see value in this, smaller companies are intrigued”, Michael explains. Companies are afraid about losing control. However he says that “the responsibility is the same, everyone still has to carry their weight whether its my employee or someone like Tony [from a business accelerator]”.

Michael tells us that it is important to “choose a [business accelerator] company that acts like they are part of your brand”. For example, avoid using a business accelerator that says they are helping with sales for your company. Look for one that wants to work with you and lets others know that you are a part of their brand.

Q: Is your relationship with your outsourcing sales team similar to that of your employees? Do you feel that they love their product as much as your employees would?

Michael explains that his relationship with Tony is getting closer, but is slow because he doesn’t see Tony everyday. He describes that his relationship is different because Tony sees Michael as a client, and will complain less because of it.

He feels very confident in Tony because he can tell that he does love the product and that’s why he’s successful. It’s a necessary prerequisite for any sales rep.

What are the costs?

The question that every executive needs to ask themselves:

  • How many total job vacancies do you have, and how much in total costs are you incurring?

Chances are it’s more than a few and it is costing your company hundreds of thousands of dollars a week! This is because it costs the average company roughly $20,000 a week for not filling a sales position. The scary part is that management is caved in on driving sales performance and do not realize that vacant sales positions are offsetting their sales on the back-end.

  • How much will it cost you if roughly 25% of your sales reps quit in that year?
  • How much will it cost you to then have 74% of the sales reps not engaged in their work?

On average, it costs anywhere between six to nine months of the sales rep’s wage to on-board them. This could mean anywhere between $30,000-$60,000 per sales rep depending on how much you’re paying them.

Because there is such a shortage of sales representatives, companies are poaching and offering them higher wages.

All the while, millennials are not known for job loyalty. 25% of millennials say they’ll leave a job within a year and 44% say that they’ll leave a job within two years. Not only do companies have to defend themselves from other companies poaching their sales reps, but their millennial sales reps are searching for the next thing.

The costs are different for every company, but I’m sure by now you can see why you need to find ways to prevent your company from losing millions.

In summary, outsourcing has become widely popular and outsourcing sales teams is becoming acceptable. As a recap of some of those benefits:

  • Ability to swap in and out employees that are not performing well without risk or costs like workers comp
  • Same or lower cost than having an employee
  • Saves hundreds of thousands of dollars from vacant positions
  • Decrease time spent on employee acquisition, training, and on-boarding

As an executive, it is your duty to assess the costs in dollars and time that your company incurs from having an in-house sales team. If it is substantial, it may be time to join the many companies that are using business accelerators to save millions.