Selecting Exceptional Salespeople Ep 392

Summary Notes


Alex Hormozi, owner of and host of the discussion, emphasizes the importance of selecting naturally talented salespeople over extensive training. He shares personal anecdotes, including an emotional milestone when his business first succeeded without his direct involvement and the story of a natural salesperson, Mario Negretti, who excelled immediately. Hormozi argues that companies should focus on hiring individuals with innate sales abilities, similar to how elite institutions like Harvard select top students. He advises that if paying top dollar for sales talent isn't feasible, one must cast a wider net in the hiring process and maintain a low tolerance for underperformance. Hormozi asserts that exceptional salespeople prove their worth early on, and cultivating a high-performing sales team requires cutting underperformers to elevate overall standards.

Summary Notes

Selecting Exceptional Salespeople

  • Paying less for salespeople requires talking to more candidates to find exceptional ones.
  • Low tolerance for slow sales performance is necessary; quick success in closing deals is expected.
  • A full sales cycle without closing indicates the salesperson may not be top-tier.

"When we're selecting for exceptional salespeople, if you pay less, you have to talk to more people to find them, and then you have to have low tolerance in terms of how quickly they make a sale. And I would say for us, if someone has done a full sale cycle and they haven't closed the deal, I already know that they're not a killer."

This quote emphasizes the importance of efficiency and effectiveness in sales. It suggests that investment in hiring may reduce the need to sift through numerous candidates to find a high performer, and that quick success in sales is a strong indicator of a salesperson's potential.

Emotional Impact of First Non-Owner Sale

  • The first successful sale by someone other than the owner was an emotional milestone.
  • It signified the potential for the business to operate and grow without the owner's direct involvement.

"I remember I was driving back home and I got this text and it said, hey, we closed two sales today, and there had been four people who had walked into the business. And I had to pull over to the side of the road because I got so emotional, I got teary because it was the first time that someone else had ever sold something besides me."

The quote captures a pivotal moment for the owner, realizing the business could thrive with sales made by employees. It underscores the emotional journey of entrepreneurship and the significance of building a team that can sustain the business.

Introduction to Hiring Excellent Salespeople

  • Alex Hormozi introduces himself and the purpose of the video: to guide on hiring and recognizing great salespeople.
  • He shares his company's success and his experience in building sales teams.

"And if you don't know who I am, my name is Alex Hormozi. I own It's a portfolio of companies that now does about $85 million a year. And the reason for this video is, I want to walk you through one of the most important steps, which is how do you hire excellent salespeople and how do you recognize great salespeople?"

Alex Hormozi presents his credentials and the context for the video. He aims to share valuable insights into hiring sales talent based on his considerable experience and success in the field.

Recognizing Talent Over Training

  • Sales training is beneficial, but innate sales talent can be more impactful.
  • A personal anecdote about Maru Negretti illustrates the potential of natural sales ability.
  • Great salespeople can intuitively close deals, even without formal training or knowledge of the product.

"And he ended up closing this first lady who walked in the door for paid in full. And I remember walking in, like, completely dumbstruck. I was like, he didn't even know what the pitch was, but she walked out giggling, happy, so excited to start. And what that moment taught me was that it is good to train salespeople, but it's better to take great salespeople and then just point them in a direction."

This quote recounts an event where a naturally talented salesperson achieved success without prior training, demonstrating the power of inherent sales ability. It suggests that while training has its place, the raw talent of a salesperson can be a more significant asset to a business.

Selection and Success at Harvard

  • Harvard's reputation does not solely come from producing the smartest individuals; it stems from their selective admissions process.
  • The innate intelligence of Harvard students is a significant factor in their success.
  • The quality of teaching at Harvard, while high, is augmented by the already exceptional base level of student intelligence.

"Harvard doesn't produce the smartest people. They select the smartest people, and then they put smart professors in front of them."

This quote emphasizes the notion that Harvard's success is largely due to its ability to select highly intelligent individuals, rather than solely its educational offerings.

Importance of Talent Selection in Business

  • Service companies like McKinsey, Bain, and BCG excel by creating a large talent pool and selecting the best from it.
  • The concept of winning through selection is highlighted by Estrutt Cathy's (founder of Chick-fil-A) HR philosophy.
  • Alex Hormozi suggests that selecting individuals with innate abilities, particularly in sales, is more effective than extensive training of less naturally inclined individuals.

"You win the championship in the draft."

This quote from Estrutt Cathy's HR head at Chick-fil-A underlines the importance of selecting the right people for success, which is a belief that Alex Hormozi shares, especially regarding sales roles.

Training vs. Natural Ability in Sales

  • Sales roles benefit from individuals who naturally possess rapport-building skills and dynamic energy.
  • Investing training time in individuals with a high baseline ability yields more significant improvements than training those with lower innate skills.
  • Hormozi argues for the efficiency of training naturally talented salespeople over those without a predisposition for selling.

"I could spend 10 hours to take someone from a two to a four and a half, or I could spend the same 10 hours taking someone from a six to a nine."

This quote illustrates Hormozi's perspective on the efficiency of training individuals who already have a natural aptitude for sales, as the return on time invested in training is greater.

Recruitment Strategies Based on Compensation

  • Companies that cannot offer high salaries must put more effort into the recruitment process, including running ads and leveraging networks.
  • When a company can offer competitive pay, it should focus on recruiting top salespeople who are already employed.
  • Recruiting from companies within the same industry can reduce the time it takes for a new salesperson to become productive.

"If you cannot pay super handsomely... then you need to look harder and you'll need to interview more people."

This quote acknowledges the challenges faced by companies that cannot offer high salaries and the need for a more rigorous recruitment process to find suitable talent.

Sales Cycle and Type of Sale

  • Understanding the sales cycle and type of sale is crucial in evaluating a salesperson's proficiency.
  • Different types of sales include transactional, long, software, and coaching program sales.
  • Fewer variables in the sales process allow for quicker assessment of a salesperson's abilities.

The type of sale, is it a transactional sale? Is it a long sale? Is it a software sale? Is it a coaching program sale, whatever it is, right? There's so few variables that we're changing that they can immediately jump and go, which also allows you to make a judgment on their proficiency faster.

The quote emphasizes the importance of recognizing the type of sale to streamline the assessment of a salesperson's skill level, as the complexity or simplicity of the sales process can impact their performance.

Innate Talent vs. Training in Sales

  • Top salespeople and trainers often exhibit natural sales ability from the start.
  • Examples of naturally talented salespeople include Jordan Belfort, Bradley, and Grant Cardone.
  • Alex Hormozi himself had closed thousands of deals before undergoing formal sales training.
  • Hormozi believes in the importance of selecting the right salespeople rather than focusing solely on training.
  • Training is seen as a way to reinforce a salesperson's innate talent.

All the guys that I know who have taught sales were exceptional salespeople day one. Bradley started selling cars when he was 18 years old, and was the top salesman at 18 years old when he started. And he was like, I just found something I was really good at.

This quote illustrates the concept that many successful sales trainers were naturally gifted in sales from the beginning, as exemplified by Bradley's early success in car sales.

Jordan Belfort talks about how he didn't know how to train anybody in his book. And then all of a, then he, for the first time, ever, wrote out a framework to explain the straight line sales system, which became his book and all that kind of stuff. But up to that point, it was just what he naturally did.

The quote discusses how Jordan Belfort's natural sales ability led him to create the Straight Line Sales System, which was a formalization of his innate sales process.

I do think that if we are selecting salespeople, I think it's much more about selection than it is about training. The training is to remind them how good they are, not necessarily to make them good.

Hormozi argues that selecting naturally talented salespeople is more effective than trying to train someone who lacks innate sales ability. Training serves to enhance existing skills rather than create them from scratch.

Investment in Self vs. Company Training

  • Individuals have more time to invest in themselves than a company might invest in an employee.
  • Self-training can be more time-intensive but beneficial for personal growth.
  • From a business perspective, finding a good salesperson is more cost-effective than extensively training a mediocre one.

Like, you have you all the time, so you can train you in all your off hours, and you're spending your own time to invest in yourself.

This quote highlights the advantage individuals have in self-improvement, as they can dedicate personal time to enhance their sales skills beyond what a company might offer.

But from a return on investment perspective, the cost of finding a good salesperson compared to the cost of training a bad or mediocre salesperson is significantly lower.

Hormozi emphasizes that from a financial standpoint, it is more efficient for a company to hire a salesperson with natural talent than to invest in extensive training for someone less skilled.

Sales Training Models

  • Some companies adopt a model where they hire anyone and subject them to an intense culling process.
  • An example is 24 Hour Fitness, which hires broadly and retains only those who can meet high requirements.
  • Successful salespeople in such models are often those who can withstand rigorous demands.
  • Training in these models focuses more on company processes and tips from experienced salespeople rather than on fundamental sales techniques.

They take on anybody who has a pulse, and then they put them through a ridiculous culling process, and then 10% of people make it in the first 90 days, right? That's their process.

The quote describes a hiring model where the initial selection is broad, but the retention is based on a challenging elimination process that only a small percentage of new hires survive.

Importance of Sales Skills in Business

  • Sales proficiency is essential for running a business, especially for small businesses.
  • Practice and repetition are key to improving sales skills for those who are not naturally talented.

You have to get good at it because it is core to running a business, especially a small business.

Hormozi stresses the necessity of being skilled in sales to successfully operate a business, underlining the importance of sales proficiency as a core competency.

Learning to Close in Business

  • Closing is a critical skill in business that needs to be learned and mastered.
  • Investing time in learning to close is beneficial for personal skill development and future talent recognition.
  • Training oneself is more valuable than spending excessive time on an underperforming employee.

"Business, is learning how to close, right? And so if you take time to learn it, it's okay. It's a skill that you're going to add in your arsenal, and then it'll allow you to recognize good salespeople in the future."

This quote emphasizes the importance of learning how to close deals as a fundamental business skill, which also aids in identifying competent salespeople.

Selecting Exceptional Salespeople

  • Exceptional salespeople are crucial for a business's success.
  • Lower salaries may require speaking with more candidates to find exceptional talent.
  • A quick ability to close deals is a strong indicator of a salesperson's potential.

"And so when we're selecting for exceptional salespeople, which is what I'm saying, selecting for exceptional salespeople, if you pay less, you have to talk to more people to find them, and then you have to have low tolerance in terms of how quickly they make a sale."

Alex Hormozi suggests that finding exceptional sales talent may involve a larger candidate pool, especially with budget constraints, and emphasizes the need for a low tolerance for slow sales results.

Performance Indicators for Salespeople

  • The first sales cycle is a critical performance indicator.
  • Salespeople who don't close deals in their initial cycle are unlikely to be top performers.
  • Continuous improvement is expected from those who demonstrate initial success.

"If someone has done a full sales cycle and they haven't closed the deal, I already know that they're not a killer because every single killer I've ever had closes deals in their first cycle."

Alex Hormozi identifies the first sales cycle as a benchmark for assessing a salesperson's potential, suggesting that the best salespeople show their capability early on.

Team Culture and Performance

  • Removing underperforming team members can improve overall team culture.
  • High standards and expectations set the tone for a world-class team.
  • A strong team will quickly integrate or reject new members based on their fit and performance.

"If you get rid of the people who are dragging the team down, the culture of the team will improve. And I promise you, whenever you cut bottom, the top moves up."

Alex Hormozi argues that eliminating underperformers can have a positive impact on team dynamics and performance, ultimately raising the standard of the whole team.

Hiring Philosophy for Sales Teams

  • The best salespeople have innate talent and are typically "born" rather than "made."
  • Hiring should be based on a strong positive intuition about the candidate's potential.
  • A rigorous recruitment process or poaching from similar businesses can yield the best talent.

"The best salespeople are born, in my opinion, not made. We can select for those people either through recruiting them directly from people who have very similar businesses to us, or we have to interview many more people."

Alex Hormozi shares his belief that the most effective salespeople have an inherent talent for the role and that finding such talent may require targeted recruitment strategies or extensive interviewing.

Tolerance for Non-Exceptional Performance

  • Tolerance for mediocre performance decreases with experience.
  • Exceptional performers are usually identifiable early in their tenure.
  • More training is not always the solution for underperforming salespeople.

"The longer I've been doing business, the shorter my tolerance for somebody not being exceptional is because every person that has been exceptional, I know immediately."

Alex Hormozi expresses that his patience for underperformance has diminished over time, as he has learned to quickly identify exceptional talent.

Conclusion and Welcome to the Community

  • Alex Hormozi concludes the talk by welcoming newcomers to his community, "Mosy nation."
  • The talk ends with an appreciation for the audience and a goodbye.

"Thank you, guys. Appreciate it. If you're new to Mosy nation, welcome. Bye."

This closing statement shows appreciation for the listeners and extends a welcome to new members of the community, ending the talk on a positive note.

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