Making an ROI on Your Salespeople

Making an ROI on Your Salespeople (Chapter 2)

Most businesses don’t actually know if their sales team is profitable.

In this episode, Jason breaks down how to turn sales hiring and performance into a measurable ROI engine, so you can stop guessing and start making confident, high-impact decisions.

What you’ll walk away with:

• Clarity on the true cost of a bad hire
  Understand how a wrong sales hire can cost $100K–$200K+ within 6–12 months—and how to avoid it.
• A framework to calculate ROI on every salesperson
  Learn how to apply 3x–5x return benchmarks and reverse-engineer compensation to drive profit, not just revenue.
• How to design incentive plans that actually drive performance
  Build clear, motivating structures that reward the right behaviours—new business, margin, and growth.
• A more effective way to hire (beyond gut feel)
  Replace instinct with data and assessment so you don’t hire based on experience alone and repeat costly mistakes.
• How to fix underperformance before replacing people
  Identify whether the issue is the person, the role, or the system—and take the right action.
• What high-performing sales teams do differently
  Clear role definitions, aligned targets, structured onboarding, and consistent coaching.

The bottom line:
Sales success isn’t about hiring more people, it’s about building a system where every salesperson earns their right to deliver a return.

CTA:
If you’re unsure whether your sales team is delivering ROI, or want a clear framework to improve it, connect with Jason or explore the Sales Trajectory approach.

Transcript

SPEAKER_00 0:22

Welcome to the sales trajectory podcast, where innovation meets execution in sales. I'm Jason Howers, your host, a 35-year sales veteran and lifelong student of the game. This podcast is for leaders and sales professionals with a growth mindset. You'll hear real sales stories about new products, motivating teams to prospect, and boost productivity. We dive deep into sales process, cutting-edge tech, and recruiting top sales performers. Let's get started. Currently recording this episode in Onomichi, which is in Japan. I'm here for a friend's wedding and also doing some work while I'm traveling. Today we're talking about chapter two making an ROI on your salespeople. Sales requires passion to succeed. Some people have it, some don't. It's possible someone you hired many years ago did have a strong desire to win, but they've lost it. A high percentage of sales managers don't know what their ROI is on their salespeople. I was the same. None of us were ever taught. Technology has helped us to better understand this, but many companies still haven't been set up to use it the right way. In this chapter, we dig deep into the areas that can help support sales growth and deliver a return on investment. When you've hired someone, imagine watching them drive down the road with the window down and $100 notes flying out. Recruitment moves very fast and changes quickly. And as an executive coach and recruiter, we get daily calls from sales professionals who have been made redundant. Many who know they're not potentially going to get that money again. But were they being overpaid because of industry experience and potentially sucking up company profits? Possibly. But to be fair, they were overpaid by inexperienced hiring managers. We also speak with some amazing candidates who are worthy of a higher dollar investment, but they tend to be the ones you won't see actively looking. But if the wrong person is hired and you've paid too much, then you've got a really big problem. That's when we bring in the experts with our sales DNA assessment before we hire, irrespective of someone's experience and that maybe they worked at the leading company in the industry. We want to be able to find out before you invest your valuable time and money interviewing someone to make sure they're a good fit. We had a story recently where two months into the role, we were contacted by a company, they weren't sure what was happening, there was missing components of the salesperson. But when we asked questions, there was no clear defined requirements in the PD, in the job description for this salesperson to be able to tick those boxes. So a lot of the times it's a good time to pause and reflect. If something does go wrong, instead of running to hire and replace someone that didn't work, it's a really good opportunity to sit back and go, okay, why didn't it work? What happened? What could we have done differently? How do we get to this position and start? Because sometimes it's like a revolving door, and we need to understand in more detail as to why it didn't work. We offer a deep dive into why it didn't work. We share leading statistics with you because before you start again, you really need to understand where you're at and what's happening. I know a lot of companies say, hey, look, I've got this covered. I've heard it before. We've recruited before. We don't need an external recruiter, or I'm sorry, we don't need your help. We're going to go this alone. And look, I understand that. I understand costs are important. I understand margin reduction is making an impact on business. But you've also got to look at the point right now that there's a lot of leaders running around juggling multiple balls, doing multiple positions. So if you are running around, you're not focused, you're not on your game, you could make a call and go, I'm going with gut feel, we're going to do it. And I've heard this many times before. And I've also seen somebody ring me back and go, gut feel didn't quite work it last time. If you look at the in-house cost recruitment breakdown, if you're doing it yourself, we've got a table. I'm happy to share this with the interested. But from a job preparation, it could take a couple of hours. You want to review what worked in the past and what you're looking for. And that can be approximately a thousand dollar cost. You need to write a new job advert. You can't just resurrect or resuscitate the last one. You need to invest time. There's a couple of hours to do that. There's another thousand dollars. You put the job ad up on Seek or leading platforms, and that's not cheap these days as well. By the time you put it up and you pay for the advert, you could be talking a couple of thousand dollars. If you're doing screening of candidates, that can be, you know, three to five hours and that can cost you another few thousand dollars. First interview. If you do five hours of interviews with two people up to five to ten candidates, that can cost you another $1,500. You come back around again with the second interview, that could potentially cost your business $1,500. You're doing reference checking by the time you do that and you're asking the questions and you burn a few hours, there's another $500. If you do a medical and police check, there's another $500. Potentially, costs to hire can be 20 plus hours of your time at a minimum cost of approximately $8,000 Australian dollars. So if you look at the hidden tag of hiring mistakes, whether you're in three, six, or twelve months later, if you look at the cost of a three-month onboarding program where you've you've put someone in the job, you've given them three months, they haven't worked, potentially it's already cost you $8,000 to start with in trying to hire somebody. You've then got three months at a cost of $45,000 where you've paid them, they've driven your car, they've put expenses on your hotels, on your credit cards. The six-month process here of unsuccessful hire, if they get to the end of probation, uh, you're talking $8,000, the initial cost, plus a potential another $90,000 cost. So if if someone doesn't succeed and they are put off or don't make their probation, you're talking nearly $100,000. 12 months in, you're talking approximately $180,000 plus $8,000, nearly $200,000 if someone's there 12 months and they don't succeed. It's a huge cost to hire. If you look at a mid-level, let's go six months, you're talking $98,000. So nearly $100,000. If you look at the cost to invest to work with a company like ourselves, where we offer a six-month guarantee, you can see the return on the investment is much better. Plus, you haven't had to go out, do all the hard calls, try and attract people, try and work out the performance from the pretenders. There's a lot that goes into it. And I think in a lot of cases that businesses are just looking at the cost itself instead of the overall package. So it's a huge disruption to your business and clients if you don't succeed. We've had clients where we've replaced 80% of their sales team with people who can sell. We were called in initially because of these clients' lack of sales. I'm talking multiple clients here, not just one or two. We were bought in to remove the responsibility from hiring managers who weren't skilled in recruiting. That's why we've written this book. Our priority is to get better salespeople in your business. Many of the other tasks of a sales manager can be burdened by having to hire. It's time consuming. It can be a pain. There's lots of false starts. A lot of clients who contact us are initially frustrated. They're feeling trapped because they've worked with other recruiters. Like I did when I was a hiring manager. And they're simply thrown candidates with industry experience by an external recruiter who potentially has under five years' experience in recruitment. They've been put into the position, they're rewarded fulfilling roles quickly, will place anyone with a pulse in front of you, hoping that your business will hire them. Potentially they'll fail. Then they'll be replaced, as per the agreement, with another salesperson with industry experience who could potentially fail again. It's like being on a hamster wheel. I've been there. At some point, leaders do need to eat some humble pie. We've all done it. You have to see the value in working with us to understand what we bring to the table. Our experience and specialty in training, coaching, and recruitment provides areas of improvement for our clients. We have a lot more buy-in than traditional recruiters. We're always committed to the long game. We have confidence that our candidates will last longer and data because we remove major barriers from not hiring the bottom half of salespeople when using our DNA assessment. We won't just put people forward unless we've got the data to back them up and you will see that. Think about it as a tool for your sales toolbox to enable you, as a sales leader or hiring manager, more confidence and science to recruit effectively. We have a few gaps that we tend to identify when we're looking to help leaders hire. If you're looking for a return on investment, we ask these simple questions. Are your current compensation plans motivating and driving the right behaviors? That's one of the big questions that we ask because if it's not, well then something needs to change. Can your team explain how they earn their incentives? And quite easily, they should be able to do this within a few minutes. It should be an easy yes. New hires have the right to see compensation and incentive plans if they're signing a contract. You need to have it ready to go. So there's no hidden surprises down the track for either of you. Be transparent. When you are hiring, are you attracting and keeping quality sales hunters? Sales professionals who will win new logos and increase sales with your existing customer base. If not, this is where you need objective data to guide your hiring and performance decisions. Are you confident your sales hires are going to be able to deliver a 3x to 5x return on investment? If you're unsure about any of these questions, then it's time to take a closer look. You need to understand ROI benchmarks for sales incentives. Our approach leverages data across both low sales, high margin, and high sales, low margin scenarios. Recognizing that our clients operate across a spectrum of business models. The impact of these variables is significant when determining how best to reward salespeople. It does depend on whether you're actively looking for new clients or whether it's about resurrecting accounts that you've lost or whether it's about growing new products with your existing clients. We provide 3X and 5X ROI benchmarks grounded in industry best practices. These benchmarks will change the way you hire forever, and they're designed to be adjusted and tailored to suit your business, product mix, and margin profile. It's important to understand this all upfront. It does take a bit of work. It needs to be incentives and commissions. It needs to be an appendix that attaches to your contract. It does need to be changeable because things can happen. If you're unsure about any of this, please reach out. We're happy to have a discussion. We're happy to sit down with you and create an incentive program that can motivate and generate new business opportunities for your team. We have our HR partner as well who can help you with precision descriptions and contracts for employment. It's crucial to fully understand your costs, particularly when considering new hires. If you factor in a ramp-up period, that is essential. It's also unrealistic to expect new employees to immediately start earning incentives within the first three, six, nine, or even twelve months. The specifics depend on your sales cycle and how you choose to structure key performance levers within the role. From a personal perspective, ensuring that new hires are meeting critical success criteria provides leverage. If they are not performing as required, then rewards can be withheld. This complexity makes it worthwhile to invest time in understanding the true costs and ROI of your sales team, especially as recruitment costs rise and quality candidates become hard to source. If we look at someone like manufacturing or trade, for example, we run examples with a 3x and 5x return on investment, and we cover off different margins and opportunities as well for you to adjust accordingly. It's important to look at the results because if you have triggers in there and say, for example, the salesperson hits their targets and then they get to the end of the month or the quarter and they look at it and they're like, well, I only earned like $600. Was it worth it? You don't want that. It's got to work for both parties. It's got to return provide a return on investment for the business. It's also got to provide an attractive target for the salesperson to earn and chase that. If you don't have this right and you're partway into the year, well, the wheels can fall off very quickly because the salesperson will give up. They're like, hey, I'm not going to make it. It's not achievable. And the old saying goes, if you're not paying any incentives in your business right now, then something isn't working. You've either got the wrong person in the wrong role or your mix of targets and remuneration incentives is not working. It needs to be looked at. What you don't want is for everyone to give up andor people to start leaving because they're not ever going to meet targets. It's essential to evaluate whether your current compensation plans drive performance, offer predictability and scalability, and motivate the right behaviors. If your organization is not paying out incentives, it may be a time to reconsider your approach. Techniques such as multipliers or interim adjustments can stimulate sales activity while ensuring both business profitability and salesperson opportunity is present. To assist with documentation and HR support, a free consultation is available on request. Proper documentation can prevent costly disputes over commissions, which are often sensitive topics. White paper available for business leaders, HR managers and sales leaders. It provides a detailed report and examples of what we're talking about. If you'd like a copy, please reach out via jasonhouse.com.au or personally to me. Here is a quick checklist for business leaders. If your salespeople have a high base, they might be too comfortable. Sometimes it's better to have someone with a mortgage and bills to pay who is potentially more motivated to chase new business. But many teams lack incentives to spark new business development. This is what you need to focus on. Is your current setup motivating growth or is it making it easy for salespeople to stay in the comfort zone? It's common for sales reps to get caught in customer service emails and with familiar clients, avoiding the ones that could potentially bring in new business. Bringing someone straight in off the street and paying them a high base is not going to help everyone. Quick recruitment story from nearly 25 years ago. A past client of mine was a very aggressive selling company in the timber industry. They bought hard and they sold hard. The owner, let's just say his name was Ken, called me one day and said, Jace, I've got a question for you. We've got a guy who we've interviewed for the job. You know him. Can he sell or not? I'm not here to be messed around, he said. And my answer was no. He wasn't an aggressive salesperson. He wouldn't have lasted. So I did this gentleman a favor. New business development is hunting. In this role, you're expected to generate a return on investment. Sometimes we need to ask the hard questions before hiring for BDM roles and capable of doing this job. Will you consistently hunt for new business every day? You want this person to earn the right at your company. Don't just hire for industry experience or because they're likable or available now, because sales is a hard grind. With sales targets, don't just hand over half of your business to a near salesperson, then reward someone for just doing the job. Make them earn their stripes. I know I did. It makes you appreciate the wins and losses much more. And make sure you reward for margin. If someone's selling at a higher margin, then consider uncapped incentives or even capped incentives, but never allow your salespeople to set the pricing. The number one reason that you could go broke is if you let your salespeople do the pricing. If you purchase more competitively, if there's a chance in the currency or there's a shortage and you can sell for more, then do it. Don't give your salesperson the right to sell what they want because potentially they'll go cost plus. I've seen it many times. I couldn't work out why we couldn't compete with some of the high-level importers. And it was because the salesperson was dictating the price. And in some cases, they were 20 to 25% cheaper than what we were. You need to work from the market rate backwards. That's my advice. Reverse engineer your pricing. What's the best price we can get? Sell for more margin. Reward your team for selling value and not just price. It's actually quite contagious when your salespeople win and they start to earn more because they build confidence. You'll see it change the conversations. I've always used to know if I was dealing with a procurement manager who worked for a company. It's a completely different story to dealing with someone who owns the business or someone that is rewarded for margin. You want your salespeople to sell like they own your business. It will give you a better return on investment every time. Guaranteed. Ensure that your incentive program is easy to follow. It should be able to be read on the back of a coaster or cocktail napkin in the bar having a beer. Remove obstacles for your salespeople. Give them a clear run at sales growth. If they divert back to their comfort zone, then you've got a problem. And regularly go back to a position description. Make sure they're doing the job they're supposed to be doing. Ensure they're clear on who to target. There's a lot of companies that are putting too much pressure on certain people, whether it's sales, marketing, operations, pricing, all these other areas, you need to remove the roadblocks and make sure they're actually doing the job they're supposed to be doing. Because it's very hard to performance manage someone off a precision description if it's not accurate or if they've been thrown all these other jobs to do. Get the right people in the right role and have a sales process and system that works that they can follow. And then you can scale. It's a game changer. And make sure you coach your people. Don't just let them be and hope that they will work out. They need guidance. Have your weekly one-to-ones. Make sure you're catching up with them regularly. Integrate technology to make it more efficient so you can see what's happening and how you can help these people. Underperformers typically get more time from leaders and overperformers. Spend more time with your top performers. Have drive time. Go and see key clients. Take them for a coffee. Take them for a lunch. See how you can help them. Can you get your bottom 50% of salespeople into your top 30% by investing in their professional development? The best option is to draw the line in the sand and coach them up or coach them out if they're not willing to do it. Underperformers must go. But make sure you understand their ability before you let go. That's why we use the sales DNA assessment, because I've seen it where companies have let go somebody and only to hire a new person and they're worse than the person they had before. Right now, the focus is on removing. The cost of doing business. So potentially by removing your worst performer and investing that money into building a high performance sales team will pay off dramatically in increasing your performance. A good time to pause and reflect and make sure that your business is running like a well-oiled machine. You should know your outputs, you should know your statistics, your win-loss ratios, the length of your sales cycles, and also why are you losing opportunities? This is a great area to understand more about if your salespeople are missing out on opportunities. Well then why? Because you can learn from your mistakes. What you don't want, and we see quite often, is where a sales leader or a hiring manager is recruiting a new salesperson and they're hoping they're going to fix all their problems. I'm sorry to be delivered the bad news, but it's probably not going to happen. That ends up our discussion today on chapter two, ChrysleBore recruiting. We hope that that provides value for you. If there's something out of here that resonates with where you're at in your business right now, or somebody else you know in the industry, please reach out. We're grateful for any referrals or anything we can do to help build high performance sales teams and align top sales professionals with leading companies. Have a great day. We greatly appreciate your time. Got a product that's struggling or launching something new? Reach out. We're inviting guests who want to make a real impact!