1.  Your front-line Sales Managers don’t add sufficient value

 

2.  Your Reps are underpaid in the market

 

3.  Your hiring process isn’t executed consistently

 

Before we get into leading indicators, let’s explore exit interviews.  Exit interviews help determine why turnover happened after the fact.  If HR is not currently performing exit interviews, you should ask them to start.  They should be performed for all sales people that leave the organization.  Analyzing response trends will help improve factors that have already led to turnover.

 

Are you asking the right questions in your exit interviews?  Download the sales specific exit interview guide below to diagnose turnover root causes.

 

GET THE SALES EXIT INTERVIEW GUIDE HERE

 

There is one problem with using exit interviews to diagnose turnover issues.  Turnover has to occur to perform them.  They are a rear-view mechanism.  Once turnover trends worsen, it is difficult to reverse course. 

 

A large increase in turnover is every sales leader’s nightmare. Especially if your best people leave.  Most organizations measure turnover percentage. By the time this metric acts as the alarm, it is too late. This is another lagging indicator just like exit interviews

 

How can you accurately diagnose the root cause of turnover? Your front-line Managers will say “Bob was a bad hire”. “Bob just didn’t get it”. “Bob didn’t fit in here”. These are just attempts to mask the truth. Turnover is always the fault of the sales leader. They either hired the wrong person or didn’t provide the right environment.

 

Here are 3 indicators that help you see turnover coming:

 

1. Your front-line Sales Managers don’t add sufficient value – what is the top reason given when people leave a company?  Their boss.  If your front line leaders aren’t making the team better, they will leave. Ask yourself the following questions:

 

  • Do my leaders build meaningful relationships with their team?
  • Are my front line sales leaders spending enough time with the team?
    • At least 2 days a week in the field?
    • Consistent 1-on-1 meetings?
  • Are sales people acquiring new capabilities?  Or are they just going through the motions?
  • Do sales people get better every time they interact with their boss?

 

Sales Mngr Time

 

2. Your reps are underpaid in the market – sales people want to be fairly compensated for their efforts.  If they don’t feel they are, they will find somewhere else.  Compare their On Target Earning (OTE) to other comparable roles in your market.  They should be paid in the 60-70% percentile as compared to the market.

 

  • Recruiters love underpaid talent.  It is like shooting fish in a barrel.  Recruiters will tug at their ego and paint a picture of the glorious future.  Don’t allow your reps to be an easy target.  Paying reps a few thousand dollars more could reduce exponentially more expensive turnover.

 

Comp Benchmark Graphic 

 

3. Your hiring process isn’t executed consistently – you hire based on experience and gut feel.  The process is performed differently in each geo.  The process doesn’t have clear step ownership.  Your turnover number will not improve until you fix this.  Hire based on role competencies and execute the same process every time.    Don’t hire anyone if you can’t answer yes to this question.  Does this person have the potential to be better than my best rep?

 

Hiring Role the dice Expect turnover if you aren’t confident about the 3 indicators listed above.  What can you do about it?  Follow the steps below to improve your sales environment.

 

Call to Action:

 

  • Obtain results from the last 5 exit interviews
  • Analyze the root causes of turnover
  • Interview 5-7 of your current sales people.  Ask them about the 3 indicators listed above.
  • Fix any of the 3 indicators that are outside best practice
  • Monitor your turnover trend

 

 

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ABOUT THE AUTHOR

Scott Gruher

Orchestrates and designs the perfect project strategy, one engagement at a time, to ensure that every SBI client makes their number.
Learn more about Scott Gruher >

Scott joined SBI in 2010 with years of hands-on experience in sales leadership and enterprise selling. Since his arrival, he has helped dozens of organizations dramatically accelerate growth, from Fortune 10 organizations like Phillips 66 to fast-growing cloud service organizations like InfusionSoft. Scott specializes in cross-functional alignment. He helps leaders align around the growth goal and design the right processes to bring the strategy to life. His unique combination of real world experience and a pragmatic approach to problem solving have made him one of SBI’s most demanded resources.

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