What a Sales Rep Is Really Worth: We Spent $600 on Ads and Got 20+ Sales

We spent $600 on ads and recruited Charles. He's made more than 20 sales for us at Aquaworld Alkalino, from leads he generated himself.

That's $30 of recruiting ad spend per sale so far, with no lead cost on top, and he's still selling.

When an owner asks me what a recruiting campaign costs, I get why. It's the first number you see. But it's the wrong one to look at alone, because the cost of a recruit doesn't tell you anything until you know what that recruit can do.

The Lifetime Value of a Recruit Is How Many Sales They Can Make

With a customer, lifetime value is what they pay you over time. With a rep, it's how many sales they make for you before they leave.

So do the math out loud:

Sales per month × months they stay × what each sale is worth to you = what that rep is worth

Then divide what you spent to find them by the number of sales they make. Charles keeps pushing that number down, because the $600 was spent once and the sales keep coming.

Compare that to buying sales with leads. Across our client accounts in Q3, a closed sale cost about $898 to $1,466 in marketing, all in. You pay that every time you want another sale. Charles's sales came from leads he generated himself, so the only marketing cost behind them is that $600. Commission still comes out of every sale, but the cost of finding him is done.

That doesn't mean you stop running leads. It means a good rep is one of the few things in your business that gets cheaper the longer it lasts.

Not Every Recruit Is Charles

I'm going to be honest, because this is where people get burned. Charles is a good one. I've hired sales people before where it didn't go that well.

It's all numbers. Out of the people who apply, some book an interview. Some of those show up. Some you hire. Fewer are still selling 60 days later. That last group is the only one that matters.

So don't measure a recruiting campaign by applicants. An ad can get you 100 applicants and no one who sells. Measure it by how many people are still active and selling at 60 days, and by how many sales they've made.

If you only look at one part of the funnel, the numbers will lie to you.

The Rep Who Generates Their Own Leads Changes the Math

Here's what most owners miss. There are two kinds of reps:

• The rep who only sells the leads you give them. They can be great. But when your ads stop, they stop. Every sale still costs you a lead.
• The rep who can create their own. They knock doors, work events, pick up the phone and cold call, and ask for referrals. They don't wait for you.

Charles is the second kind, and that's why $600 went as far as it did.

I knocked doors selling solar for 3 to 4 years. At the start I'd knock 6 to 8 hours to get one appointment. By the end I wasn't knocking more than two or three blocks, and in 30 minutes I was inside a house closing. You can knock 100 doors on Tuesday and get 10 appointments, then go Wednesday and get zero. But that person is never out of work, because they don't need anyone's ad account to have a conversation.

Here's what that brings to the business:

1. Sales that don't cost a lead. A deal from a door, an event or a referral has no ad spend attached to it. All of that margin stays in the business.

2. Sales when the ads are down. Ad accounts get restricted. Creative gets tired. Costs go up. A team that can create its own appointments keeps selling through all of it.

3. A business that doesn't depend on one channel. I learned this one the hard way. In solar, one email from our installer saying they were bankrupt wiped out what we were owed. If everything runs through one thing, that one thing can end you.

4. Paid leads go further. A rep who has fought for appointments at the door doesn't waste one that came in from an ad. They call it and they follow up.

5. More reps than your ad budget can feed. With only paid leads, the number of reps you can support is capped by your budget. Reps who generate some of their own let you grow past that.

6. They can build the team. People who can sell without being handed leads are the ones who can train the next person to do the same.

What to Look For When You Recruit

If this is what you want, your recruiting has to filter for it from the first question.

• Say it in the ad. Tell people it's commission and that they'll be out talking to people. It lowers your applicant count, and that's fine. You want the ones who stay in anyway.
• Ask in the form, before the interview. Ask whether they've sold door to door, worked events, or made cold calls. That's something they've done, not a feeling about themselves. Everybody says they're motivated.
• Ask how they got their last customers. The answer tells you more than the resume.
• Don't promise an income. Tell them how they get paid and let them run their own numbers. The ones who chase a big number in an ad are usually the first to leave.
• Hold the interviews quickly and in person when you can. Good people have other options.

So What Should You Spend?

Work backward from one sale. If one sale is worth thousands to your business and a recruit who sticks makes several, you can afford to spend real money finding that person, including on the ones who don't work out.

Run your own numbers: what does a sale bring you, how many a month does a decent rep make, and how long do they stay? We built a calculator for this that follows the whole path, from candidate to interview to hire to active at 60 days to sales.

Frequently Asked Questions

What is the lifetime value of a sales rep?

It's the number of sales a rep makes before they leave, multiplied by what each sale is worth to your business. It's the number to weigh a recruiting campaign against, because the ad cost by itself doesn't tell you whether the recruit paid off.

How much does it cost to recruit a sales rep with ads?

It depends on your market, your offer and how you filter. We recruited one rep on $600 in ad spend who has made more than 20 sales from leads he generated himself, but that's one rep and not a promise. Plan on some hires not working out, and judge the campaign by who is still selling at 60 days.

Is a rep who generates their own leads better than one who works paid leads?

The best ones do both. Self-generated deals carry no ad cost and keep coming when ads slow down, while paid leads give a rep more conversations in a day. A rep who can only sell handed-over leads depends completely on your ad budget.

How do you find reps who will knock doors or work events?

Say it up front in the ad, then ask in the form whether they've actually done it. Questions about what someone has done filter better than questions about how motivated they are.

What should I track in a recruiting campaign?

Follow the whole path: applicants, interviews booked, interviews attended, hires, active at 60 days, and sales per rep. Applicant count alone can look great while nobody ends up selling.

The Takeaway

$600 looks like a cost until you put 20 self-generated sales next to it. Stop asking what a recruit costs by itself and start asking how many sales that person can make, and whether they can find their own customers when the ads go quiet.

Book a call with me and we'll run the numbers for your business.