Synopsis A publisher was experiencing very high and costly turnover among its advertising salespeople. By shifting to a much more structured selection process using profiles of suitable sales personalities, turnover was cut by nearly a third in the first year, while saving five times the cost of testing.

Problem
Based in Johannesburg, but with offices all over South Africa, Media24 is Africa’s largest publisher, offering entertainment, information, and education 24 hours a day. A salesforce of 600 sells advertising in Media24’s 59 newspapers and 60 magazines, printing nearly 250 million issues each year.

The publishing giant was doing very well in 2004, but the business is tricky, and top management wanted a world-class sales force to handle the rapid changes. Moreover, turnover among advertising reps was 28 percent. Some reps could not handle the pressure, others did not have the skills for the job, and some simply could not sell well enough for their salary-plus-commission compensation to pay off.

The selection process was not very formal, relying almost entirely on interviews with candidates and subjective judgments of these interviews. Each hiring mistake cost Media24 from $5,000 to $12,000 just in direct expense, for recruitment, management time, training, and other cash costs. Indirect costs were higher. It usually takes three to six months for a rep to be fully effective at selling advertising, according to Beulah Van Rensburg, Media24’s talent manager for sales and circulation. Each time a rep left, that whole process had to start over. Managers had to spend more time coaching new hires as reps learned the ropes. Furthermore, relationships with many customers were interrupted.

In late 2004, Van Rensburg heard a conference presentation on sales rep selection by Peter Gilbert, president of HR Chally SA, an affiliate of HR Chally. After considering several alternatives, Media24 decided to go with the thorough Chally approach, even though it was considerably more expensive than some other tests.

Chally SA spent about two months doing preparatory work. It met with sales leaders at Media24’s many publishing units to understand the requirements of each sales position. Some sales were chiefly transactional, while others were much larger and more complex. The same title was often given to reps with very different responsibilities and vice versa, that is, different titles were given to reps with essentially equivalent duties. “It was quite a challenge to sort all that out,” Gilbert remembers.

Chally matched every position, no matter what the formal title, with one of its 14 profiles for assessment of sales potential. For sales managers, Chally gave its assessment to the top and bottom current managers to do a customized validation of a profile for these positions. However, Media24 had been promoting top reps to management positions, so this validation step chiefly found the profiles of top sales reps. Chally recommended that its client select future managers based on a special profile of good management candidates.

Making It Work

Media24 began using the Chally approach quickly, but it took about six months to be fully effective. Some managers initially resisted or struggled with the new approach. And the managers who had to use it were far-flung and had to be trained in its proper use. Media24 was committing to a much more formalized and structured method of selecting new salespeople that had to be followed by many units in many locations. Chally staff conducted short training sessions for interviewers and other managers who would use the new tools, charging travel expenses and daily rates.

The new approach starts with recruitment, through advertising, agencies, the Internet, references, and other sources. Resumes, education, and references are then checked to select candidates for interviews. These interviews are now conducted using interview guides prepared by Chally for each sales position. Managers were trained to score these interviews objectively and consistently, looking for specific answers to each question. “In the past we used interview guides that were not related to the position,” Van Rensburg explains. “Now, we have specific sales questions. The whole process is more formal and more structured for specific answers.”

Based on these first steps, three top candidates are then selected for each open sales position. These top-three picks are then given Chally’s thorough personality assessment, at a cost of about $480 per test, and results are available within 24 hours. Final selection of one candidate is then made, based on all the preceding steps. The other two candidates are referred for any sales positions that are open in other Media24 business units and that may require slightly different characteristics. The results of the Chally assessments are retained to aid in training, coaching, and managing the new hires and in selecting potential future managers.

Results

Chally had originally committed to reduce salesforce turnover to 20 percent. The approach beat that mark in its first full year. The savings in just direct costs were $600,000 in the first year. Van Rensburg estimates that Media24 pays Chally from $100,000 to $120,000 per year for the service.

Cost savings continued in 2006 and early 2007, and sales were very strong during this period. “We had a great year,” Van Rensburg says. She notes that other changes were also made that aided the improvement, but credits Chally for much of it. Above all, “Chally has made our selection decisions more accurate.”

Media24 began its third year with the Chally approach in April 2007. No changes are planned, but Van Rensburg says she will continue to review other assessment tools “to make sure we are using the best.” The assessments are now given in English, the business language of almost all South Africans. A portion of the Chally assessment’s vocabulary is uncommon in South African English, but this has caused no real problems in using the assessment. Van Rensburg is considering offering a version of the test in Afrikaans, another language spoken by many South Africans. Gilbert says Chally SA would be happy to translate the assessment into Afrikaans, if required.
– Henry Canaday
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