Why you need to decrease sales staff churn
As someone who has been in sales enablement for a long time, I spend most of my time looking for problems around the bend. One problem that I worry about is the increasing amount of sales staff churn, and how much that is costing us.
Sales staff churn is often considered a necessary evil. Some leaders even take a bit of pride in their sales staff churn, mistakenly believing that it shows how elite their team is. While you never want to hold onto low performing sales reps, the question is why are you hiring the wrong candidates in the first place, and how much is that costing your company?
Opportunities lost, and dollars walking out the door
I suspect that one of the reasons why sales staff churn has not been taken seriously enough is that cost almost seems cartoonishly high. You’ll find plenty of articles that claim millions of dollars are lost due to sales staff churn every year, but your company isn’t losing millions, is it?
When looking at the cost of churn, it’s important to take everything into consideration. There is the cost of recruiting. There is the cost of interviewing, with your sales managers and top performers taking hours away from their job to interview dozens of candidates per role. There is the cost of training the new hires. The largest cost, however, is in the cost of lost opportunity. Every sales rep that gets hired has a number attached to them. Whether they are a good rep who is ramping, or a mismatched rep who will never hit quota, deals are simply not being closed while your new hire gets up to speed on your product, solution, tools, and culture. For a SDR (sales development rep), that might be 3 months missing full efficiency. For an Enterprise Account Executive, that cost might be closer to 9-12 months.
Three things that you can do today
Your churn rate doesn’t have to be as high as it is today. Here are three things that you can do today to start reducing churn, decrease ramp time, and increase your profits.
Make Optimizing Your Investment a Priority
The first step is understanding the unique and real cost of your sales staff churn. Hearing stats means nothing if it’s not connected to your company. Determine your real cost, per job type, to hire and ramp new sales staff. This number should include everything from recruiting cost, training costs, hours spent interviewing, and the unsold quota attached to the ramping rep. Determine how long each new hire will have to stay in order for your investment to pay off and then track these numbers on a quarterly basis. By consistently reporting out on the numbers, and paying attention to how many reps are getting hired and fired before the investment in them pays off, you will be able to determine the how high of a priority it needs to be for you to decrease sales staff churn.
There is no single group or person can that can decrease your sales staff churn. This isn’t a problem that sales enablement, sales leadership, or HR can solve. The only way that you will actually decrease your sales staff churn is through thoughtful and consistent collaboration.
So, who should be involved in understanding the problem and putting a solution in place? Every company is different, but I recommend that the following groups be involved with this project: Sales Leadership (including front line managers), Sales Enablement, Sales Ops, HR, Recruiting, and Sales AEs. With at least one member from each group represented, you will very quickly be able to get to the bottom of the causes of and solutions for reducing sales staff churn.
There are so many reasons why sales staff churn might be too high. Your recruiters might be painting an unrealistic picture of the job. Your hiring profile might be wrong. Your sales managers might not know how to interview well. Your training might be not tied to reality. Your sales culture might be poor or even toxic. This group will be able to find the weak links that are allowing either the wrong reps to be hired, or allowing great reps to walk out the door.
Track your results
Now that you know your cost, and you have a team in place, the next key thing to do is to track from recruitment to fully ramped employee, and potentially even through the exit interview. For every hire, make sure that you have a record of where they were recruited from, the results of the hiring matrix, the feedback from their onboarding, the data on their ramp time, and the feedback from their hiring manager. While all of these things are often tracked already, they are very rarely tied together which means that we miss out in understanding where things are breaking.
Hopefully this was a helpful first step in helping you understand how and why to decrease your sales staff churn. Next week we will dive in deeper to understanding how to tie your onboarding program to your hiring profile to make sure that you are setting your new sales staff and your company up for success.
In the meantime, what has your company done to decrease sales staff churn? What's worked for you, and where are you still struggling? Do you think we need to focus more on hiring and keeping the right salespeople? Please share your thoughts in the comments!