I was recently reading Randy Komisar's "The Monk & the Riddle". It's a great book and provides an fresh perspective for entrepreneurs on starting a business in Silicon Valley.

In the book, Komisar talks about the different type of CEO needed at each stage of a business.

First you need a "Retriever", able to fetch together the founding team and resources. Next it's the "Bloodhound" who sniffs out the market and sets direction. Thirdly you have the "Husky" who pulls the company towards it's goal.

I thought these were all great metaphors for the different types of interim sales manager that you need at different steps in the evolution of a business.

It also reminded me of an article I posted on Ecademy back in February, Are you a "Renaissance" Salesperson or "Coin-Operated Rep"?.

This looked at how you need different types of salespeople at each stage of a company and/or market.

Renaissance Reps were the visionaries. Enlightened reps were interested in refining the sales process and, finally, "coin-operated" reps (I love that phrase) do what you would expect... go out and fill the order book.

One of the things I see most often when speaking to clients about outsourcing sales is that they fail to understand the type of salesperson they need for the stage they are at.

Hiring someone who simply wants to sell "by the numbers" when you haven't got an established and repeatable process is always going to fail. At best, they'll burn through your prospects and then retreat defeated.

Of course, as Komisar points out, that's when you'll need the last category to pull you out of the deep stuff... the Saint Bernard.

Labels: entrepreneurs, interim sales management, sales, start-ups

An very useful book for any sales manager is John Davis' Magic Numbers for Sales Management: Key Measures to Evaluate Sales Success. This book covers how to measure over 50 aspects across the sales process, from sales planning through to sales performance and review.

In one chapter, Davis covers Independent Sales Representative Analysis.

"Sales management have three basic choices when building their sales force: 100% company-employed sales people, an independent sales force, or a combination of these two"

In essence, the formula compares the overall costs of an employed sales force with that of independent sales representatives and calculates the break-even point below which you outsource and above which you bring it in-house.

To me, this is too simplistic.

The chapter concludes that companies need to consider their situation and longer-term strategic goals. "Costs will influence their decision" says Davis but "other, harder-to-control factors" should be considered.

In my experience, sales outsourcing decisions are seldom made with a straight cost comparison. The most common factors influencing a company's decision to outsource sales include:

Internal capabilities - if the company does not have, or is unable to attract, the capabilities to build a strong sales force, outsourcing to a contracted company is a good option.

Time to market - recruiting a sales team from scratch takes time. An outsourced sales force can bring immediate "feet on the street".

Conserving capital - recruitment fees, infrastructure and tools (laptops, cars, etc) mean that building an in-house sales team is a significant capital investment. A sales outsourcing partner will typically work on fee plus commission structure which can get you in the game for a lot less that hiring your own team.

Fixed versus variable costs - for start-ups and early stage companies this is often the biggest attraction of outsourcing sales.

Of course, costs are an important factor, but strategic value usually plays a more significant part of the decision to outsource your sales force.

Labels: interim sales management, sales compensation, sales outsourcing

Having spoken with many Interim Managers I find that they tend to fall into one of two camps: Serial or Parallel.

Serial Interims are probably what most people consider to be the classic type. They work on an assignment in a full-time capacity for a length of time (usually 3 to 12 months) and then, when they complete it, they move onto the next gig.

But, just as many entrepreneurs have started describing themselves as "serial" or "parallel entrepreneurs", this second category exists in the interim market.

In fact, I would describe myself as a "parallel interim manager", in that I work on a portfolio of client assignments at the same time.

It's a bit like the portfolio worker concept identified by Charles Handy.

It could be that this mode of working is more suited to smaller businesses and start-ups, which are my clients. The necessity to run multiple projects is usually due to clients wanting my expertise without the capital commitment of hiring a full-time Sales Director.

Also, I've personally found that sales and business development are processes that can be effectively segmented into activities run in parallel. Some care needs to be taken not to start two assignments at the sames time (which is when they are most intense and require full commitment) but generally the model works well.

Many of my associates also take this approach, running client or their own business projects alongside other engagements. Again, this is typically a good fit for small businesses or larger companies that want an interim for special project or strategic initiative (such as to validate a new market).

The classic serial approach is best for stop-gap or "business as usual" interim work. However, the reality is that interims are rarely used for "business as usual" within the sales function.

Labels: entrepreneurs, interim sales management

I was reading a recent article published within Call Centre Focus, the UK's #1 customer contact magazine, which looks at the growing market for interim management services.

The article publishes results from a survey on interim management which shows that demand is strongest for interim general managers (33%). This is followed by finance managers (21%).

According to the report, the third function with strongest demand is sales and marketing managers with 11%.

This certainly echos our experience and view of this fast growing market.

As more companies use general interims and recognise the value interim management services bring as an efficient resourcing option, clients begin to seek specialist solutions to specific issues.

Sales & marketing has always been a function with a huge impact on business performance. Any change within a salesforce is high risk where mistakes can cost a company years of profits.

For us, the answer is to hire high quality interims with a solid track record in sales and marketing.

Labels: interim marketing management, interim sales management

It's always interesting when I speak to clients about our fees how different expectations vary.

In all sectors, if you want to hire an interim manager then you generally expect to pay more than if you employ someone direct. This is because interims are hired for a number of benefits beyond their cost per day. As always, Wikipedia provides a good perspective on these benefits Interim Management.

However, regarding interim sales management roles, there is a difference.

Sales compensation packages include a basic salary and then an OTE (On Target Earnings) element. For many companies, this is usually set at something like a 60/40 ratio.

(I could post a separate blog entirely about Sales Compensation, it's a big topic)

So, let's assume you are launching a new product line into a non-aligned market. You want a Sales Manager to focus exclusively on the product until it has gained traction in the market (after which you plan to introduce the product to your existing sales team). This is often a good strategy as sales teams can be reluctant to promote new products lines over the ones they earn most of their commission from. Plus the new product may require market or technical knowledge that they do not have.

You decide that the employed position would attract a 60k GBP OTE (split 40k basic and 20k commission). I would consider this a mid-level package. In some sectors, such as industrial IT, it could be lower. In other, such as high-value BPO sales, it would be higher.

Typically, you would also have accelerators, quarterly targets, etc, but let's keep it simple. Also, I'm assuming that the OTE is based on some sound business plans, rather than a rough guess.

When you factor in National Insurance (currently 12.8%), holidays, benefits such as car allowance, health-care, pension, etc - then that 60k package will cost you 314 GBP per day.

Add to that a recruitment fee of around 25% of the package, which means you're paying an additional 15k up-front to hire your new sales manager.

So, how does this compare with interim rates?

There's a general industry rule called "the one percent rule".

Someone who would normally attract a 60k OTE package would cost around 600 GBP per day (or 1% of the annual salary)

In our experience, this is a reasonable guide but the market rate can often be lower than this.

Why? Typically interims are senior, over-qualified individuals who have made a lifestyle decision to become a consultant or interim manager. They usually have a portfolio of interests and, as such, put a premium on flexibility.

So, often, the market rate to attract the right sales manager to an employed role can be comparable to hiring an interim on a part-time contract.

If we take the example of the 60k GBP employed role. Whilst the total cost of employing this person would be 314 GBP per day, it may be possible to engage an interim for around 400 GBP per day.

That's a small premium for flexibility, experience, immediate access and reduced risk.

Plus it saves you the up-front recruitment fee of 15k GBP!

Other factors to consider that will affect the daily rate include length of the project (longer term normally equates to lower rates), level of risk (turnarounds with high risk of failure attract a further premium on daily rates) and, of course, how sexy the project is.

Working for a great name in a great location can be so attractive to some candidates they will discount their standard rate to get the gig.

Labels: interim sales management, sales compensation, sales consultants