I regularly catch up with Directors and Managers of Fire & Security businesses throughout the UK to discuss industry trends, challenges and needs, and potential solutions to help them grow.
Recently I met the Managing Director of a small but growing Security business whose goal has been to add £1 million revenue to the business within a 12 month period. Unfortunately, over the last year, that goal had been and gone following a period in which the company had hired 2 Business Development Managers in order to achieve these results. One year on and the company were behind on budget, the Business Dev Managers were gone and the Managing Director was having to go back out, sell, and bring in new clients himself, fighting fires and having limited time to focus on anything else.
The Business Development Managers that had been hired were purely hunters, focussed on new client acquisition, they interviewed like James Bond but turned into Mr Bean the moment they were on his payroll. One in particular booked over 200 meetings in a 5 month period, producing only 17 proposals and zero revenue. Something clearly wasn’t working.
We’ve all heard that the definition of insanity is doing the same thing over and over again whilst expecting different results. However although the client agreed that this approach wasn’t working, when discussing the possibility of changing the brief and hiring an excellent Account Manager from a similar industry who could efficiently farm, the Director started to get a little uncomfortable, questioning why he should pay a salary to someone to deliver on existing business, plus the fact that it may not be possible due to the number of systems and intricacies in the marketplace (see my previous blog discussing the necessity for product knowledge in a great sales hire here).
Hiring in your own image
Looking for solutions we spent some time reviewing the current business and clients the company had. The Director was excellent at Business Development and a great hunter, and really been trying to hire in his own image, expecting his staff to give the business the same 18 hours a day that he had been doing. However, upon reviewing the existing business growth potential, we worked out that by bringing in a Farmer, the company would be able to vastly increase the turnover by Farming the current accounts alone.
A business will have clients who spend a certain amount per year; depending on how much they spend we can divide them into categories such as A clients, B clients, C clients etc. Let’s say of these clients you have 3 A clients who spend £100k p.a. with your business, 10 B clients who spend £40k p.a. and 50 C clients who spend £5k p.a.
The accounts can then be divided into Keep, Attain, Re-Capture and Expand, with the Expand accounts having growth potential over the next year, perhaps they have 12 sites and you are currently working on 2 for example.
If you could move just a small proportion of C clients to B, B to A, and A to A*, there would be a mass generation of turnover from within. See the below infographic.
It’s important to remember that you have already done the hard part with these clients: they have already bought into your business.
Research and estimations vary; however, the White House Office of Consumer Affairs has said that the cost of acquiring a new customer is six to seven times more expensive than retaining an existing one. Not only that but repeat customers spend, on average, 67% more. Therefore rather than hiring a hunter to develop new business, it makes much more sense and will result in a lot less cost in terms of hiring, time, and money, to get a farmer who could take these relationships and grow them, yielding extra revenue. There will then also be an increased pool of candidates as more individuals are better at farming than hunting.
Whilst the Director – an extremely good hunter – had been trying to hire in his own image, we agreed that recruiting the right Account Manager (Farmer) would enable him to pass the majority of his accounts to someone highly capable thus adding much needed extra revenue and freeing his time to be spent on the highest value activities such as business development and financial defence with a view to doubling growth once again and building a much more replicable formula. He could now play to his strengths whilst maintaining some control over his assets and relationships,
Finding the right hire for your needs
How do you know if your candidate pool is suitable for your needs, be it a farmer or hunter? Will they have the right attitudes, behaviours, knowledge and skill to fulfil the role and save the need for 12 months of your valuable time, lost opportunities & money invested before parting with them and starting again?
My suggested first step would be to sit down and put together a proper performance job brief to identify the attitudes, habits and behaviours that you’re looking for, and ensure that all parties involved in hiring agree on this. Psychometric tests and analysis enable you to do expand on this and then match these briefs against the profiles of potential hires. Not only does this ensure that you are able to question further during the interview, it will also result in less wasted time during the interview process, helping to identify if those involved in the hiring have a different ideal candidate in mind before you start the process.
What are your thoughts on hiring hunters v farmers? What do you think the benefits are of each type of person?
Psychometrics should be considered as part of a properly thought out assessment process and plan for the role you hope to fill. We are able to help you throughout this process and offer advice, sit in on interviews and ensure that you achieve the results you require saving you both time and money. Please don’t hesitate to get in touch for further help with your hiring process, staffing strategies to boost your business, and more.