Recruiting the Closer Dealing With a Deal Maker
Hearts on Fire is one of the fastest-growing diamond brands in the $60 billion diamond jewelry industry. The company’s distinctive pieces are sold by 500 retailers in 18 countries. With offices in China, the U.K. and the U.S., the company uses satellite crews to train retail sellers to promote the brand. It discovered, however, that sales performance was lagging at too many stores.
Diamond jewelry is the most highly sought-after category of luxury goods, and selling it requires the ability to close a deal on an item that often carries heavy emotional significance and a high price tag. Hearts on Fire vice president Peter Smith spends much of his time consulting with the retailers to boost sales.
"We form partnerships with the retailers to get them to the next level of sales, so we become deeply involved in their attempts to boost retail personnel performance," Smith says. "The key is to capture the right salespeople and establish the right fit. So we identify for them the best Hearts on Fire retail salespeople and try to bottle that to help our retail partners."
Branding strategy, pricing, product positioning and the competitive landscape all contribute to sales results, but 40 percent can be traced to sales skills and the performance of the sales force, according to Huthwaite, a sales performance consulting firm. As the single largest factor in driving revenue, sales skills differentiate companies in the retail world—particularly in luxury sales, where product features and brand identity are not enough to close the deal and sales skills drive value creation and profit-margin growth.
When Hearts on Fire learned its retailers were encountering major challenges with sales performance, the company decided to focus on the issue at its annual Hearts on Fire University in Las Vegas, a learning conference for more than 2,000 retailers. Before the conference, Hearts on Fire brought in Caliper, a management consulting firm, to assess the retailers' salespeople and identify how their personality strengths and weaknesses impact their work.
Caliper tested of 1,200 salespeople at the conference.
"We found that the retailers were hiring salespeople who were really suitable for customer service, not sales, so the shortfall in sales performance was a self-fulfilling prophecy," Smith recalls. "Retailers were hiring for communication skills and basic qualities, but not on the basis of whether candidates could close a sale. In the retail jewelry environment, that is the real issue."
Testing for a match
The Caliper results suggested that the Hearts on Fire retailers were recruiting sales personnel who demonstrated strong customer service skills but lacked the key traits needed to succeed in sales—persuasiveness, a direct communication style and solid organizational skills. The test pinpointed a basic mismatch in the personality traits of the retailers’ salespeople and the traits needed to sell successfully in the diamond jewelry business.
"Our basic finding for Hearts on Fire was that their retailers were selecting service people who have good levels of empathy but not the motivation to get someone to say ‘yes,’ " says Herb Greenberg, president and CEO of Caliper.
The inner need to have someone say "yes"—the ego drive—characterizes closers. "An individual with ego drive can close a deal even if there’s no commission," Greenberg says. "Ego drive is the hunger for ‘yes.’ "
Ego drive is an innate personality trait, not a learned skill. If sales employees have low ego drive and their performance is adequate, employers can train these employees in closing techniques, which may lead to small performance improvements.
"But if their ego drive is very low and their productivity is low, you have to let them go," Greenberg says.
Commission programs cannot motivate employees who have low ego drive, but they can motivate salespeople with ego drive to achieve even higher results.
Caliper’s research indicates that one in four candidates have strong ego drive and are suitable for sales jobs. Within that group, it is still important to match a candidate with the right basic personality traits to the specific requirements of a job in a particular industry and type of sales. If the industry or the particular job requires heavy cold calling, for example, the candidate will need persistence and discipline in addition to ego drive and empathy. Personality tests can measure ability to persist and levels of personal discipline.
Caliper surveyed more than 10,000 sales forces during a 15-year period and found that 55 percent of all sales workers lack the necessary levels of empathy and ego drive to be successful. Twenty percent have the right qualities but are not working in the right industry for their specific characteristics.
"That leaves about 25 percent who have the right qualities and are working in the right industry," Greenberg says. "They sell 80 percent of everything that is sold."
Overall, 70 percent of employees are in jobs that are not suited to them, according to Greenberg.
The problem is exacerbated by the fact that recruiters commonly source from within their industry. "The typical approach in recruiting is stealing employees from competitors, but this just circulates mediocrity," he notes. "You have to have the courage to look outside the field."
A growing number of studies now indicate that a candidate’s employment history and background may not provide relevant information about his or her suitability for a retail job. Greenberg notes that relying on employment history can be particularly unproductive for evaluating older candidates or those who are returning to the workforce after a break in employment.
"One retailer passed over a candidate because she had left a long career in teaching and had no sales experience," he recalls. "However, the candidate was not well-suited for teaching and never really succeeded in the job. She scored high on the test for sales skills and might have become a highly successful salesperson."
Identifying performance characteristics
Although sophisticated testing tools have been available for decades, retailers need to ramp up their efforts to update job profiles to reflect the performance characteristics that mark the most successful sales workers. On the basis of its 2007 analysis of methods for transforming the retail sales force for high performance, Accenture advises retailers to retool their recruitment and selection profiles based on analyses of the performance of the most successful workers in the current sales environment.
Accenture advises retailers to identify the two or three most critical segments of the workforce, which usually include customer-facing frontline associates and buyers, and then define what optimal performance looks like for those positions. This means evaluating the skills and experience that characterize top performers and the recruiting pools they came from.
This information can guide the development of selection tools and technologies to reduce the number of false positives—candidates who appear on paper to have the right skills but don’t succeed on the job. The flip side of this approach is to avoid false negatives—failing to hire candidates with the right skills for optimal performance because those skills have not been properly identified.
Accenture also recommends pushing the biggest part of the filtering work to the front end of the process so that costly human analysis occurs only after candidates have been screened based on updated performance criteria.
With an updated analysis in place, retailers can not only make the necessary modifications in the recruitment process, but also identify gaps between top performers and lower-performing sales employees so that effective learning and development programs can be tapped. Accenture also advises retailers to develop talent management programs tailored to the specific critical workforce segments rather than rolling out programs across the organization.
The process to retool the retail sales force at Hearts on Fire is ongoing. In August 2007, the company brought 15 retailers to Boston for intense sessions to follow up on the conference findings.
"When we asked them what keeps them up at night, 12 of the 15 retailers said personnel issues," Smith says. "We challenged them to start thinking outside their own retail category to find candidates with the right fit."
Hearts on Fire discovered that at a 10-store retail chain on the East Coast, one outstanding performer was hired on from the cell phone kiosk outside a store, and another was hired away from a gas station.
"You can find the right people if you look for personality traits instead of superficial stuff," Smith says. "You still have to do due diligence to ensure that they have integrity and the necessary work ethic, but you have to start with traits."
Too many employers believe that the largest recruiting problem occurs when you invest in a candidate only to discover that their work is untenable.
"A much bigger danger lies in hiring on masses of candidates with mediocre sales performance," Smith says. "The real cost to your business lies in people who are performing at 3 or 4 out of 10. It’s the warm-body approach."
The key point, as the Hearts on Fire retailers discovered, is to ensure that the performance criteria applied to the selection process match the actual requirements for success on the job. In the diamond jewelry business, that means selecting candidates with the ego drive necessary to close the deal.