You’re ready to hire
your first (or next)
homecare sales rep.
Besides all of the
other questions that
likely go along with
that hire like...
how much do I pay
them... salary or
commission... what
should their quota
be, at some point
you (or someone at
your agency) is
going to ask...”how
long before they
start producing?
Great question.
The first part of
that answer is
“however long it
takes, you’d better
have budgeted for
it”, meaning that
you’re going to be
making an investment
in the “ramp up”
time for any new rep
until they are
consistently
producing the amount
of admissions you
require. This
investment should be
calculated based on
the average
reimbursement and
profit per admission
and the expected
monthly “carrying
cost” of your new
hire. If the amount
they bring in is
less than they’re
being compensated
(total
compensation...
including salary,
payroll taxes,
bonuses, expenses,
etc.) then the
balance that is left
over is your
investment.
Calculating this
cost in advance can
really help in the
hiring process,
because if you have
a prospective sales
hire and during the
interview you see a
dollar amount (let’s
say $20,000 for
instance) hanging
over their head...
it makes your
decision that much
more important, and
that much easier.
Are they worth the
investment of $20K
(or $10K or $50K...
or whatever)?
So, on to the time
frames. The best way
to predict your
return on investment
is to plug in the
amount of homecare
AND sales experience
that your new hire
has. You can come up
with some general
guidelines that will
help you ascertain
how long until
you’re seeing
CONSISTENT results
from this person.
Experienced
homecare sales rep
– 90 days. Period.
End of story. Ok...
maybe not, but
somewhere in this
time frame, an
experienced sales
rep from one of your
competitors should
be able to settle
in, learn your
accounts (and begin
to generate new
ones) and have
enough time with
your team to
integrate themselves
and bring in the
admissions. If the
time frame is
significantly longer
than this, you’ll
have to question
your capabilities to
staff the incoming
referrals and the
capabilities of the
sales rep
themselves.
Sales
experience, but no
homecare experience
– Six months. How
dynamic is the home
healthcare industry?
With ongoing changes
in regulations,
caregiver
availability,
disease management
programs and
technology, it’s a
tough thing to get
your arms around.
Just when you think
you know it, it
changes yet again.
Think about if you
were to enter a new
industry that was
heavily regulated by
the federal and
state governments,
had multiple payors
(paying different
rates for the exact
same product), had a
demand much higher
than you and your
industry peers could
supply and had both
accreditation bodies
and government
entities evaluating
your every move...
how easy would it be
for you to learn?
How long would it
take you to feel
comfortable going
out to speak
intelligently about
it? I’ve seen six
months as a good
benchmark for an
experienced sales
rep to get enough
knowledge and
repetition that they
can consistently
produce the desired
admission results.
Homecare
experience, but no
sales experience
– Six-nine months.
Sales is easy...
really. If you get
up each day and make
professional sales
calls you’ll get
some result from
your actions. That
said, there are
great homecare
people, that are
dedicated to the
mission and to your
patients that would
be great
salespeople... but
not tomorrow. Even
someone who is very
comfortable with the
industry isn’t going
to be a great
spokesperson for it
in a few weeks.
Why?
You need some
repetition (read:
practice) to get
good at something.
Now, if you take the
different types of
sales calls that are
required in this
industry (inservice,
cold call, second
call, formal
presentation, etc.)
and multiply those
by the types of
referral sources
(ALF’s, hospitals,
geriatric care
managers, etc...)
you’re going to have
a lot of
combinations of
sales call types
that you need to
work on. It’s going
to take some time
and account
development for your
new sales rep to get
through each of
these types of calls
enough times to get
proficient in them.
No homecare
of sales experience
– One year.
Certainly you’ll
love it if you begin
to see consistent
results much sooner,
but with this
combination of (or
lack of) experience,
your new hire really
needs to get their
hands around the
industry and a brand
new (and
challenging)
profession before
they contribute on a
regular basis. These
are the people that
you meet in
restaurants, banks,
grocery stores...
wherever. When you
meet them you think
“hmm... that person
would make a great
addition to my
agency... if only I
could figure out
where”.
Now you know...
maybe.
There is no
guarantee that these
sales reps will EVER
develop their sales
skills enough (or
learn enough about
our industry) to
become successful.
You’re taking a
fairly large risk...
but I’d rather
invest in someone
who is willing and
eager to learn and
do the job each day,
than someone who
merely wants a job
everyday.
Please bear in mind
that the above time
frames are merely
estimates based on
my experience in the
industry and in
sales... your actual
timelines could be
shorter or longer.
The key is to have a
plan for how long
your new person will
take to “ramp up” to
the ultimate goal
and to make sure you
and your financials
are ready for it. It
does no good to
bring in an
inexperienced sales
rep and set them up
for almost certain
failure because the
training plan wasn’t
set and the “success
timeline” was too
short. In that case,
you’re probably
better off not
hiring that
person... simply
wait until you find
the experience
combination that can
fit the timelines
you have in mind.
Someone asked me at
a recent conference,
“how do I know when
it's time to hire my
next salesperson”?
If you use the rep
carrying cost
divided by the
average net profit
per episode (based
on the number of
admits you’re
planning for this
new rep), the answer
is... as soon as the
numbers dictate you
hire them. If a
territory (or group
of accounts) can
reasonably generate
enough admissions to
justify someone
going out to sell
them, start the
hiring process.
I’d love to hear
your feedback on
this issue’s
featured story and
your experience with
hiring different
combinations of
sales and homecare
experience. Email
Michael and
let’s talk.
