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The Trial Close
After the Test Drive, but before investing massive time in reference checks, it’s time to do a trial close. This is something that every good sales rep does with their prospective customer. The purpose is to test the prospect’s genuine level of interest and understand their remaining concerns. You want to know how interested and engaged your candidate is, as well as if you’re on the same page financially. You should do this in person if at all possible. It’s harder for a candidate to decline an offer given in person than in a cold email. Be warm and enthusiastic; tell them how great working together will be; share your vision of what your relationship could look like.
It’s a short conversation in which you say how much you enjoyed meeting with them in the interviews and how well they did in the Test Drive. During the trial close, make sure you’re on the same page about scope, timing, title, compensation, and other essential elements. Take the time in advance to make notes for yourself, so that you touch on everything. When presenting the potential offer in the trial close, say: “Presuming everything checks out in the references, which I assume it will, I’d love to have you join our organization as our next VP of marketing. We intend to put together an offer letter by Tuesday. Based on what I’ve seen, I think you’ll do incredibly well. I know you’ll enjoy it and do the best work of your career. Plus, I think you’ll be a great fit for the organization. I’m convinced you have the competencies to be successful in the role. I’m going to let you handpick your own team. The compensation is exactly as we’ve discussed, which is (XYZ, and here are some of the key terms). Presuming I put that together, are you prepared to accept?”
Then, be silent. Note the candidate’s response. Are they enthusiastic? Do they have objections you can address, negotiation points you can resolve, clarifications you need to make? Facial cues are important. Reassure them that you genuinely see a great match; you think it’s going to be a great relationship, and that the risk is very low of it not working out. Reduce their perceived risk.
In addition to compensation, talk about growth and challenge. Remember, Rockstars crave challenge even more than money. Explain that you’re committed to making this the most engaging, interesting role they’ve ever held and the greatest career challenge they’ve ever faced. Say: “I know you’re up to it. That’s why we’ve chosen you. That’s why I want you on my team.” Show the love.
To provide context, I even explain the search process to the finalist. I explain that, “We’ve been looking for four months. We’ve looked at 175 people. You’re the one.” This conveys that you are incredibly selective, which not only appeals to their ego but also confirms that they’ll be working with other Rockstars. Go back to the Job Invitation, too, to remind yourself what you touted as great about this opportunity—you’ll learn from one of our best managers, you won’t have a ton of travel, we’ll give you this training, etc. Restate the selling points.
This is also the time to review your notes from the first phone screen with the candidate. Look back to see how they answered, “What is annoying or frustrating or missing in your current role?” This is when you remind your candidate of the pain they’re feeling and how much it’s costing them, just like a sales rep does with a potential customer. Refresh them on their endless commute, poor treatment by their micromanager, and lack of equity participation.
Use this time to restate and articulate the responsibilities of the job, setting expectations. Say something like: “Here’s what I’m asking you to do: Come in to launch this division/build our brand/turn around this sales team, and here are the key priorities I envision in the first three months and twelve months.” This serves to ensure you’re on the same page and to present what a great challenge you have in store for them. Rockstars respond to this. Be sure to use the words: “I want you on my team.” We all want to be wanted, no matter the size of our ego.
I highly recommend that you—the hiring manager—present the offer yourself; don’t have HR or your outside headhunter do it. The hiring manager speaks with a unique type of affection and enthusiasm for the candidate—it’s the beginning of a relationship, following a weeks-long courtship. If the candidate is being pursued by two or three companies, the personal offer from the hiring manager can make all the difference. You may be tempted to have a third party do it—to avoid the uncomfortable questions or negotiation—or to provide you with time to develop answers to their counteroffer. Don’t do it.
Next, lay out the compensation. Don’t put it in writing yet; get the verbal “Yes” before putting pen to paper. Say: “I’d like to take you through the compensation package, or remuneration structure.” Don’t use the word “offer” because that implies you expect a counteroffer and are opening the door to a negotiation. Go through the compensation structure slowly and methodically; don’t leave anything out. There’s the fixed salary, variable compensation (does it have a cap? how does it work?), equity (what percentage? how does it vest? how much could that be worth over time in different scenarios?), benefits, health care, vacation allowance, travel allowance, training, and any other perks such as executive coaching. Write them down ahead of time for your own reference so you don’t leave anything out. The list is likely far more impressive than you recall, when you include every element of value.
Next is the trial close. Say: “Presuming we put together a program that has all that I’ve talked about and we agree on the role and responsibilities, what is your interest level?” That tells the candidate it’s time to give feedback. If it’s anything other than an emphatic “I’m in!” find out why. They may say, “I need to discuss it with my spouse.” Okay. I offer to have dinner with them and their spouse, I can get them over the hump if I meet face to face. If they say, “I need to sleep on it,” ask about their concerns. If they say, “We’re totally on a different page financially,” express your surprise because compensation was discussed from the very first call. You shouldn’t be on a different page at this point. This may signal that they’ve been playing games or shopping around for an offer. If that’s the case, you’ve saved yourself the time you would have spent on reference checks and putting the offer in writing.
As with any sale, you’re more likely to have success if there is a deadline. Don’t threaten or bully the candidate to decide, but do let them know there is a backup candidate. You always have a backup candidate. And this is why. Say: “You’re the one I want. At the same time, I have a business to run. I have a backup candidate who’s viable and very interested. We need to agree now on when you’ll be able to make a decision and what additional information I can provide to help you make that decision.”
If they say, “I just need to talk to my spouse,” you can say, “Great. Why don’t we get together? I’ll bring along my wife. The four of us can get together and talk about it.”
If they say, “I want to review the financials again,” say, “Great. Let’s set up a time with the CFO. She’ll sit down and take you through how much cash we have and how long it lasts.”
If they say, “I’ve got another offer that I’m expecting by Thursday,” say, “Great. I totally understand that someone like you is in demand. Let’s set up a time on Friday to talk about how they compare and if there are any adjustments I need to make to our offer to make it an easy decision for you.”
If the candidate wants to ride along with a sales rep, make it happen. Quickly. If they want to meet some Board members, say, “Yes.” You can say, “I will make anything available to you, but we need to agree that by Thursday we’ll make a decision to either sign or part ways.” Unless you create the sense of importance of a deadline, these final steps can drag out unnecessarily.
If a candidate wants to negotiate salary, remember the impact this person can make in your organization and remember the cost of the vacancy. If you lose this person over $5,000 and that seat remains open for another six months until you find another Rockstar, you just made a poor financial decision.
Be creative, though, when negotiating compensation. If a candidate asks for a salary of $100,000 and for whatever reason you can’t exceed $90,000, it’s okay to say, “I can’t do that and here’s why, but I can do this.” Then, offer more in variable cash, bonuses, commission, a one-time signing bonus, equity, time off, etc. They might say, “Wow, an extra week off? I didn’t get that $10,000, but I did get an extra week of vacation.” In my experience, when there’s a reasonably small gap (10 percent or less), there are creative ways to close it in almost all cases.
If a candidate asks for several things they’d like changed, listen to the entire list first (do not comment on each one yet), then ask with another trial close, “If I can do all these things, are you prepared to accept today?” If there’s something on their list you can’t do, you can say, “That list is very reasonable. Unfortunately, I can’t do number four. Here’s what I can do. If I do, are you prepared to accept today?” Always be closing.
Don’t get frustrated, unless the candidate behaves in a way that’s inconsistent with your company’s DNA. If they are rude or threatening or arrogant, you can factor this into your decision and move to your backup candidate. These can be tense discussions, but if the candidate handles them in a constructive, thoughtful, methodical way, you’ll come to admire their confidence. Rockstars are worth the investment.
Put It in Writing
Only once they have verbally accepted do I recommend drafting the written offer letter. The written letter is a formality that reflects everything the candidate has already agreed to. Put an expiration date on the letter—twenty-four to thirty-six hours from the time they receive it. They’ve already said, “Yes,” so this expiration date shouldn’t be a problem.
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Above all, be sure there are no surprises in the letter. If you are having someone from human resources write the letter, be sure you’ve read it before it goes to the candidate. I see many offer letters that are cold, terse, and uninspiring—likely written by an attorney, and the businesspeople didn’t push back. Have your attorney review your offer letter, of course, but make the letter warm. You’re inviting this person to your home, to your family. The letter should enthusiastically welcome and congratulate them. They’ve won the long, arduous beauty contest.
The Deadly Risk of a Counteroffer
When it comes to Rockstars, the risk of a counteroffer from your candidate’s current employer is something that must be on your radar. It doesn’t happen often (10–20 percent of the time), but enough that it’s worth anticipating and addressing in advance. The reason they get a counteroffer, of course, is because their current employer knows they’re a Rockstar. B- and C-Players rarely get counteroffers, so this is another hurdle you face when you deal with Rockstars.
Once the candidate signs and returns your offer letter, and before they give notice to their current employer, address the risk of a counteroffer head-on. To do that, have an explicit discussion. Once they’ve received the counteroffer, it may be too late. When discussing a start date with the finalist, say, “Great. June 13 works for us. We’ll have your office set up and be ready for you. Let’s talk about the timing between now and then. On what date do you plan to resign?” Many times, candidates will say they haven’t thought about it. So, you can say, “Great. Let’s talk it through.” Or maybe they have a plan for when and how. Just be sure you have a formal discussion about it. Leave nothing to chance—you want to be with the candidate when they think through the plan of their departure.
Next, ask them if they anticipate receiving a counteroffer from their current employer. If they say no, let them know it may happen—prepare them. Remind them how disappointing it can be to take giving notice for their employer to finally step up and provide what they felt they deserved all along. Ask them: “How will you handle that situation?” You hope they’ll say they won’t even consider it, but they might say, “That’s a good question.” If that happens, you advise them, “Well, I’m glad we’re talking about it. Before I go through the hassle of putting together an offer letter and letting the other candidate go, I need to understand that you’re in the boat. If you’re not sure, let’s hold off on the offer letter and figure out how to get confident that you’re in the boat.”
Educate the candidate that 90 percent of the time, when someone accepts a counteroffer, they are gone from the company within a year. It’s because emotionally they already had one foot out the door and because they resent having to essentially threaten to leave. What’s more, the company often feels they can no longer count on the person for any length of time. Because your candidate may not have experienced this, explain why accepting a counteroffer is always a mistake. It starts the clock ticking on the end of their time with their company—and of course, the great opportunity you’re presenting them will be gone.
If it seems like they need it, offer to help them any way you can. Offer to have them call you right before they meet with their boss to resign. Some moral support helps. Touch base with them on the day they were to resign and ask how it went. Again, hopefully, their answer is reassuring. If they say they’re expecting a counteroffer but won’t even look at it, great. If they say they owe it to their company to at least look at the counteroffer, that’s a red flag. Be ready and don’t let a day go by without speaking live with your finalist until you know their resignation has been accepted and their final date set.
Don’t Forget the Other Half
Hiring managers also tend to forget the candidate’s spouse or partner. They, too, need to be onboard, or it can tank the deal. If a spouse is risk-averse to change or has concerns about the stability of the company, the deal can go south. A spouse may also have a social circle tied to the current company, or if a relocation is involved, be concerned about their children changing schools particularly mid-year. Before the Test Drive, ask the candidate how their spouse feels about this job opportunity. When it’s time for the trial close, offer to meet him or her; invite them into the office, have your own spouse or partner join you and then go out to dinner. When you make it personal, it goes beyond an offer letter. Sometimes by winning the spouse, I win over the Rockstar.
Pull Out All the Stops
Even if you’ve gotten the signed offer letter, the candidate is still at risk until the day they show up for work. Have your CEO call to congratulate and welcome them to the family. Invite them to spend some time at your office; maybe invite them to key meetings so they can begin to understand some of the issues you’re working on. You may want to start copying them on emails (once they’ve signed a non-disclosure agreement, of course). Make it a team effort. Have them meet their team, their peers, the investors, the Board. Pull them in the boat; it will be harder for them to change their mind. Send them a welcome gift. Make it something personal, so they know you thought about it. I also recommend giving them a copy of The First 90 Days by Michael Watkins, which outlines how a new hire can get off to a fast start in the new role.
Start Dates
How far out should a start date be? That’s part of the negotiation, and some people will need longer than others. It’s customary to give an employer at least two weeks’ notice, but some people will have extended projects they need to wrap up, and that requires more time. A start date can be as far out as three months.
Rockstar talent is worth waiting for.
