Posted: 06/1999

Wanted: A Few Good Sales Reps
By Susan Helen Moran

In an executive suite in downtown Chicago, John Shave, the 33-year old president of
Globalcom Inc., an integrated communications provider (ICP), paces across the floor
analyzing 1998 W2s, stack rankings, sales reports and personality test results of a
prospective sales employee.

Shave is not alone in his vigilance when hiring salespeople. As telecom service
providers expand their product offerings and coverage, many executives are adopting
rigorous hiring practices, which–along with vigorous training, management and retention
practices–are essential components in growing and building a sales force.

Shave says the personality employment-screening test, developed by an independent
consultant, helps cover questions he may forget to ask in an interview. Candidates who
pass the test go into the field with a top Globalcom sales rep for three days of pounding
the pavement, selling multiple telecom products to downtown Chicago businesses. Then, the
candidate must jump through personal interview hoops with Globalcom’s director of sales,
operating manager and Shave himself.

Once hired, the pressure doesn’t stop. New sales reps must meet a preset quota within
the first three months or they’re out.

"[Our approach] may seem tough and abrasive, but I have Qwest [Communications
International Inc.], Frontier [Corp.], Teligent [Inc.], Allegiance [Telecom Inc.] and
about six other major carriers to compete with," Shave says. "[Unlike AT&T
Corp.,] I’m doing this all without half a billion dollars sitting in my operating
account."

And his strategy seems to work. Presently, the 18-person sales team is writing upwards
of $130,000 a month in new business for Globalcom. Shave expects to grow the force as the
carrier continues its metamorphosis from an agent to a reseller to a facilities-based
carrier offering multiple telecom services, including high-speed Internet access and
advanced data services.

Hiring

For most telecommunications carriers, attracting good reps is difficult. Referrals from
inside the carrier, professional recruiters, job fairs, college campuses and Internet
postings all are avenues taken by today’s telecom sales managers to find good salespeople,
says Cathryn DeMartino, vice president, Executive Search Division, the Lucas Group,
Atlanta.

Vince DiBiase, chief sales officer at ICG Telecom Group, Englewood, Colo., prefers
hiring from employee referrals. ICG has two direct sales forces, which sell local dial
tone, high-speed dial tone access to the Internet, long distance, frame relay and digital
subscriber line (DSL), among other things. Its commercial sales team of more than 175 reps
sell to small and medium-sized businesses, while its 32-person national account sales
force sells to Internet service providers (ISPs). ICG covers several city markets in
California, Colorado, Texas and elsewhere and owns a total of 29 switches.

When an ICG sales rep recommends a former colleague for a sales position with ICG, and
that former colleague is hired, DiBiase pays the rep a $500 finder’s fee. "Also, you
have a team thing going on there where you may not otherwise," he says.

In addition, DiBiase uses his five inside recruiters and many outside recruiters,
including more than 10 in California alone. A candidate will interview with three sales
managers and ride along on sales calls with ICG reps for two half days. "People tend
to be more open with sales reps than with a manager in an interview," DiBiase
explains, adding that the field trip promotes a sense of responsibility on the part of the
ICG rep to show the candidate the ropes when hired.

DiBiase prefers to hire reps with telecom backgrounds, but finding them is difficult in
the shrinking telecom and sales labor pools, he says. "We are accepting less
technical reps these days–guys in the copier business or the office-supply business with
sales backgrounds," he says.

Globalcom’s Shave requires at least one year of telecom experience and an understanding
of the "cold-call nature of the business" from prospective sales employees.

In comparison, at least 80 percent of the reps hired by CIMCO Communications Inc. have
telecom experience. "We feel [our] salespeople must already understand the
industry," says Bill Capraro Jr., CEO of the Oakbrook, Ill.-based reseller. "We
are doing voice and data integration and our sales is a lot more technical these days. If
you are just doing voice, you could probably get away with hiring sales reps without a
telecom background," he says. CIMCO has about 35 direct salespeople and 15
integration specialists. "In the past, we could teach a salesperson about long
distance. Now, there’s too much to teach," he says.

Not all telecom sales managers agree that telecom experience is a top priority in
hiring, however. Tom Sterbenc, senior vice president of retail sales and customer service
at Vienna, Va.-based Cable & Wireless Inc., believes that the skill set needed to sell
today’s telecom services is about the same as a few years back. "The human
relationships stay the same. You sell yourself. You try to understand your customers’
needs. The marketplace and setting has changed in an unprecedented way, [but] I don’t
think you need a ‘higher type’ of person to sell the new products. The same [types of]
fine sales professionals can still do the job."

Traditionally, 21st Century Telecom Group Inc., Chicago, required telecom and sales
experience from its new reps. About 18 months ago, however, the carrier began offering
internships to college students. Susan Quandt, senior vice president of sales at 21st
Century, decided to follow the Enterprise Rent-A-Car model of growing the sales force by
hiring college students for entry-level sales positions.

"We recruit at the state colleges and smaller private colleges, [looking for
outgoing individuals] who may have been members of sports teams, fraternities or
sororities," Quandt says. Reps who are hired right out of college start out going
door to door selling the competitive local exchange carrier’s (CLEC’s) cable TV service in
the residential marketplace. "The job is 80 percent attitude and 20 percent
technology," Quandt says. "We expect to triple our sale force by year-end, and
that’s a real challenge in recruiting."

Other telecom managers emphasize the need for caution when hiring potential direct
sales personnel directly out of college. "Bringing in college students is a 50/50
proposition," says Globalcom’s Shave. "You must cultivate, train and lead by
example. If you don’t have the right manager training and cultivating, you’re going to
lose," he says.

On the rare occasions that ICG’s DiBiase hires directly from a college, he makes the
neophyte customer sales reps do the more mundane work for six months before trying them
out in sales. "If I go from the college directly to sales, failure rate is high. If
they can’t handle the grunt work, they will never be able to handle sales," he says.

CIMCO’s tactic: recruit at colleges that have telecom study programs. CIMCO managers
attend the job fairs sponsored by DeVry Institute, which has a four-year telecom degree
program and more than a dozen campuses throughout the United States.

Training

Carriers are focusing more attention on technical and sales training than they did in
the past, according to many telecom sales managers. Cable & Wireless, for example,
recently overlaid its sales program with a certification program, which is tied into the
compensation program, says Sterbenc, who plans to expand the carrier’s 500+ direct sales
force by 40 percent. "We [will] end up with everybody selling everything," he
says. Sterbenc’s overall strategy is to sell 70 percent more Internet, 40 percent more
data and 10 percent more voice in 1999 than was sold in 1998. The certification program
includes face-to-face classroom learning and a full university curriculum accessible via
Cable & Wireless’ intranet.

ICG also has raised its training hurdles recently. New reps are given a
several-hundred-page book to study and corresponding online self-tests. They also must
read "The One Minute Sales Person" by Spencer Johnson, a motivational book
titled "Don’t Fire Them, Fire Them Up" by Frank Pacetta and a book of generic
telecom and technology terms. After one month, the new reps receive a week of classroom
instruction from two veteran ICG sales reps at the Denver headquarters.

About three to six months after initial training, ICG managers re-evaluate the reps and
begin training them in additional ICG products and sales techniques. Reps are expected to
make about 50 calls per day to get the 15 to 20 prospects required per week.

At Globalcom, after a similar one-week classroom training course in Chicago, reps from
the company’s underlying carriers come in about once per month to train and update reps on
new technology and service offerings such as asynchronous transfer mode (ATM), DSL,
Internet, routers and equipment. "We don’t want to take reps out of the field for too
long, so we try to schedule the ongoing training sessions at the end of the day,"
Shave says. The sessions often last into the evening.

As part of training, CIMCO’s Capraro believes that managers must teach their reps to
use the right tools to succeed: "Giving reps the right ratios and weekly forecasting
numbers empowers reps. They must know their appointment ratios, closing ratios, average
revenue ratios. It is a science. You need to do certain things every day to achieve your
quota per month."

For every three appointments, Capraro expects one sale. It’s a tremendous amount of
pressure if the reps aren’t trained in the correct sales techniques, he says.
"Without good training and management, they will never be able to hit their
numbers," he says.

Retention

To retain sale reps, carriers must be prepared to offer good salaries, among other
things. "We are seeing salaries go up between 10 (percent) to 15 percent when the rep
is hired away from another carrier," says the Lucas Group’s DeMartino.

For reps right out of college, salary plus commission at 21st Century totals around
$35,000 plus, Quandt says. "But, a kid out of college could make $50,000 if she were
ambitious," she adds.

ICG pays its associate account reps a base salary of $25,000. With commission, it’s
usually between $60,000 and $75,000.

The U.S. Department of Labor, Bureau of Labor Statistics anticipates an increase in
telecommunications marketing and sales salaries of 12.9 percent between 1996 and 2002,
according to a government publication. "We also are seeing sign-on bonuses of between
$2,000 to $10,000," DeMartino says. Pre-initial public offering (IPO) stock options,
regular discount stock options and offering bonus "bridges" paid within the
first two and five months are other common incentives being offered. Also popular, she
says, are retainer bonuses wherein reps are enticed to stay a year and get $2,000 to
$5,000, stay another year and get the same or more.

Paying residuals–a small percentage of the customer’s ongoing payments–motivates a
rep to stay with the company, Shave says.

Money isn’t all-important, carriers say. Company events and outings, such as playing
whirly ball, bring operations, sales, provisioning and management together and engender a
loyalty to the company.

Telecommuting and tuition reimbursement also are among the common perks. Others are
paid-for covered parking and allowing employees to expense cellular calls. Sometimes
carriers have to get really creative. "One carrier hired a rep’s fiancie sight
unseen and moved her to the location just to keep one good sales employee," DeMartino
says.

Susan Helen Moran is a writer and independent consultant based in Oakton, Va. She
can be reached via e-mail at [email protected].