How to Predict (and Prepare for) Sales Team Turnover

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How to Predict (and Prepare for) Sales Team Turnover

Brian Gardner No Comment

The July-August 2017 issue of Harvard Business Review reported on a new study aimed at predicting which salespeople are most likely to quit. As researchers predicted, “salespeople with high ratings in historical performance and customer satisfaction would be less likely than average and low performers to quit,” since they enjoyed higher income and an elevated feeling of job security.

What researchers did not predict was the correlation between salespeople’s quota attainment and their likeliness to quit. Like with high-rated salespeople, salespeople with high levels of quota attainment were less likely to quit, but the low performers were not – as researchers expected – the most turnover-prone group. Surprisingly, the highest turnover rates were found among salespeople with average quota performance.

How could this be? The article theorizes that the poor performance of the group missing their quotas “limited their opportunities at other firms,” making them less likely to quit than the average or high performers.

The idea of losing these middle performers, albeit not as troubling as the idea of losing high performers, “still hurts their firms, because they often constitute a large and profitable part of the sales force,” HBR says. And the turnover rate for U.S. salespeople is nearly twice that of the overall labor force, they say, making turnover a big issue for all sales-oriented companies, even those with accurate predictions.

The moral of the story, then, is that while companies that can more accurately predict turnover may be able to prevent some reps from jumping ship, salesperson turnover outside of their control will always occur. Rather than agonizing over who might be next, companies should plan for the inevitable by putting processes in place to ease the transition between resigned reps and their replacements.

Rather than relying on outgoing reps’ scattered memories or their willingness to train others, sales organizations should put reliable systems in place to facilitate the transfer of customer, opportunity and competitor information. Company and sales team leaders can reduce on-boarding expenses and minimize customer churn by implementing a CRM as an information hub, replacing reps’ siloed and unreliable other methods (read: Post-It notes, isolated spreadsheets and their own memories).

Reducing turnover-related costs is one of the most compelling reasons why a well-implemented CRM is actually a revenue generator, not a cost. In fact, one past client told me that if he lost just one salesperson per year, he felt he could justify his investment in SFA/CRM. Learn how to make back your investment in CRM in ROI from CRM: It’s about sales process, not just technology.

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