One morning last December, 22-year-old John Harrell, a business marketing major at Cal State University, Chico, stepped into an office to start a high-stakes role-play. He’d pose as a salesman from IT staffing firm TEKsystems. His performance, part of a sales competition the school’s Seufferlein Sales Program runs for its students, would be assessed by judges from companies he hoped would hire him after graduation.
His would-be clients, IT managers Lonnie and Kyle, seemed to wish they were anywhere but in this meeting to discuss whether TEKsystems could provide them with IT staff.
When Harrell laid out a brief agenda for their conversation, Kyle cut him off: “Look, what do you guys do?” he growled, palms up as if getting ready for an argument.
Harrell gave him the 15-second elevator pitch and got to the point, “Anything right away you want me to address?”
“We need quality people. I want to understand how you guys are different,” Kyle shot back.
Harrell didn’t bite; he asked another question: “What positions are you trying to staff for?”
When he got an answer, Harrell quickly ran through his company’s track record and screening process. But Lonnie interrupted: “Honestly, I’ve sat through a lot of these meetings. Every company says they’re going to do this for us.”
At that, Harrell dropped his presentation to talk results. “We have a 99-percent retention rate. … I’m not here to ask for money in any way. What I want is the chance to show you guys that we have what it takes. I’m going to have three resumes per position on your desk Monday afternoon. You can be the judge from there. … Just give us an opportunity to sell you today. How does that sound?”
The managers wouldn’t sign a trial staffing agreement, but they did agree to look at the resumes. And they said they’d meet with him a few days after that. And though Harrell didn’t make his sale, his performance with that hostile audience landed him a No. 1 ranking in the competition. And since few university business programs offer sales training at all, Harrell should be a hot commodity when he graduates in June.
Thirty-nine percent of business-to-business buyers select a vendor because of the salesperson’s skills rather than price, quality or product features. Chally Group
The challenge of finding sales talent keeps some companies from growing or even surviving. That’s why sales training boosters say it’s time for university business schools to turn out graduates who can take sales jobs and quickly hit their numbers without months — or even years — of on-the-job training.
$100,000 Per Failed Recruit
The Internet may have reshaped the way things are bought and sold, but it’s hardly made salespeople obsolete. Thirty-nine percent of business-to-business buyers select a vendor because of the salesperson’s skills rather than price, quality or product features, according to data from the Chally Group, a business sales consultant. And in a 2011 survey of more than 400 companies by researchers at DePaul University’s Center for Sales Leadership, firms reported that 43 percent of their business came from new rather than existing customers. “Sales is the lifeblood of any company,” says Tom Kandris, CEO of PackageOne in Sacramento.
Skilled sellers are to companies what good draft picks are to pro sports teams, so finding and keeping them costs big money. Firms spend more than $29,000 per sales hire when advertising and staff time is included, the DePaul survey found. It took an average of six months to recruit a new hire, and turnover ran 33 percent in the first year alone — just one-fifth of recruits lasted more than three years. The average cost of a single turnover is almost $100,000 when recruitment, training and lost sales costs are figured in, the study found. In a survey last year by Manpower Group, sales representatives ranked among the ten hardest positions to fill.
The small pool of qualified hires makes the job tougher. Owen Taylor, principal at Owen-Dunn Insurance Services, is trying to bring on four new agents this year, which he says will be a stretch, even while the state unemployment rate hovers near 7 percent. And the major problem that medical device sales recruiter Linda Hertz sees is candidates’ lack of formal sales training. Hertz, who runs the Los Angeles-based Linda Hertz Group but recruits in Sacramento, has trouble placing people who didn’t receive sales instruction in college and then took sales jobs at smaller companies that didn’t offer formal training. “Everybody thinks they don’t need a degree to be a salesperson,” she says. “They don’t understand that it’s a profession.”
The New Sales Landscape
There was a day when getting customers to like you was enough to succeed in sales. But now, knowing the names of clients’ children or what they do on weekends gets you only so far. The Internet makes researching products and services easier than ever, so most buyers come to meetings knowing what they want.
DePaul’s Suzanne Fogel says that’s why today’s salespeople need deep knowledge, like skills in complex, multibuyer methodologies that allow them to manage high-volume bulk sales, such as a fleet of heavy equipment to a city. They have to be able to crunch complex numbers to make the business case. They have to master the latest sales technologies, like salesforce.com, which allows managers and salespeople to track a range of accounts and assess the likelihood of landing a contract. To move up, they need sales management and business communication skills. Hertz adds perhaps the most important skill of all: the ability to assess customer needs instead of pushing a company’s products.
But even most big corporations don’t offer training that hits all of those areas. Tim Heinze, academic director for Chico State’s program, served as a territory sales field manager for a major American car company before he moved into his current job. The training he got, he says, was too short and impractical. And it wasn’t built on a foundation of established sales theory, so he had to learn most of what he needed to know on his own.
Can Universities Fill the Gap?
That’s where business schools could come in. But sales training is missing at most of them. Of the 479 business programs accredited by the Association to Advance Collegiate Schools of Business, only 101 have a sales curriculum of at least three courses, say the DePaul researchers. And just 15 offer either an MBA in sales or a sales-oriented graduate curriculum. None of Sacramento’s higher-ed business schools run a sales program, though some offer one or two sales classes.
Of the 479 business programs accredited by the Association to Advance Collegiate Schools of Business, only 101 have a sales curriculum of at least three courses. Center for Sales Leadership, DePaul University
Research shows that schools could dramatically improve companies’ sales staff recruitment. Those hired from university sales programs significantly outperform their peers in their first year on the job and express higher levels of commitment to their companies, according to a study that appeared last July in the Journal of Marketing Education. A survey conducted by DePaul researchers at one major company in 2007 found that for salespeople hired over a 10-year period, those who graduated from sales education programs hit their break-even points 30-percent faster, and their tenure with the company averaged 40-percent longer.
Some local businesses are asking for help. Peter Johnson, who directs the University of the Pacific’s Westgate Center for Leadership and Management Development, says he gets a “fair number” of requests for sales training and that there’s “definitely a need out there.”
One source with experience working in academia locally (who asked to remain anonymous to preserve relationships with former colleagues) says university-level sales training is sorely needed but that “the people who are making the decisions are full-time Ph.D.s who don’t have an appreciation for sales and tend to glamorize marketing. You’d like to hire more practitioners, but [faculty] let their egos drive their decisions and not the practicalities of what the curriculum should look like.”
Programs like Chico State’s have moved in the opposite direction, retooling to meet the demand. After launching in 2008 with 12 students, the school’s professional sales program has grown to more than a hundred.
The school offers students hands-on practice grounded in sales theory. A sales lab equipped with cameras lets them run through role-plays, mock interviews and elevator pitches. The school hosts intercollegiate and intra-school sales competitions, for which students spend two months in training. Those culminate in nerve-wracking, 12-minute role-plays, like the one Harrell performed, that are live-streamed to a panel of judges who work for the program’s corporate sponsors — meaning students’ performance can drive whether they get a job offer. Most of them do; more than 90 percent of Chico State students with a sales degree have sales jobs within three months of graduation, Heinze says.
Corporate sponsors help pay for the program, and for good reason. They get access to the program’s best students by manning recruiting tables at school events, serving as judges at the competitions and having announcements about open positions posted in classrooms.
And hiring the right staff to run programs like this is getting easier, Heinze says. Talented salespeople are more interested in teaching in a university setting as they move on from their careers to get higher degrees. Programs like Chico State’s are built around one or two Ph.D.s who have a sales background and two or three “clinicians,” retired sales executives with masters degrees who serve as adjunct lecturers and provide the front-line sales instruction.
Can Generalist Programs Work in an Age of Specialization?
But with industries developing ever-more complex niches, some contend university programs might not offer training that’s specific enough to be valuable. Though Johnson has been asked about offering a sales class, he feels each industry’s needs are too specific for generic training to be helpful. Stephen Bender, CEO at Warren G. Bender Co., says that while there are some essential core competencies in sales, there are also “methodologies that are very particular to the product or service being sold. I believe that while it would be good for colleges to dip a toe into the world of sales orientation, it’s impractical to think that what they could teach students would be universally applicable.”
Heinze agrees to a point, acknowledging that there is more specialization than ever. But he argues that sales theory generally applies to all industries. Sales training in the academic setting can’t cover all of the bases, but it does offer students the foundation they’ll need to hit their sales targets in whatever industry they enter, he says. And Hertz thinks a salesperson’s key skill — understanding customer needs — transcends industry boundaries.
If nothing else, having sales options in university business schools could raise the profile of a profession that Taylor thinks has been unfairly slighted. In sales, every day is different, and salaries typically are higher than in other jobs with similar training, he says: “There’s no better career.”
For all its importance to business survival, companies tend to fail miserably at hiring sales staff. A 2011 survey of more than 400 firms by DePaul University researchers found that hiring one seller costs $29,000. But a lot of that money flutters out into the ether; a third of recruits don’t make it through their first year.
Seventy percent of colleges now say online education drives their long-term growth strategies. And, where for-profit universities once dominated online MBA programs, now highly rated business schools like Kelley and the University of North Carolina’s Kenan-Flagler Business School offer them.
In a world with automated bill paying, direct deposits and DVR, you may be thinking “what will they automate next?” If you’re a business owner looking for seasonal help or another employee, then I have good news for you. Automating your hiring process can not only save time and headaches, but it can also help identify the best applicants easier than ever.