Sales managers are often disappointed when a good rep leaves. And they wonder what went wrong.
Maybe nothing, says sales management recruiting guru Betsy Harper.
Sometimes turnover is a sign of trouble, of course. But, Harper argues, some turnover is natural.
Good sales managers understand the difference and factor it into their planning, she says.
Granted, a recruiter has a vested interest in turnover. But she may have a point. Consider this case in point that she offers: A CEO she’d known for a long time called to bemoan the recent resignation of one of his best inside salespeople.
The woman was a gem Ã¢â¬â a real performer and it was understandable why he would be upset about her leaving. It would definitely impact his sales numbers. But then Harper asked him how long she had been at the job.
“Well, she’s been here about five and a half years,” he replied.
“Well, it’s time for her to move on. She’s doing the right thing,” Harper said. Needless to say, that wasn’t the response he wanted to hear. But good people grow. They want bigger challenges.
Realistically, you may not be able to provide those opportunities. So they move on.
No harm, no foul. That’s a price you pay for hiring quality people.
A shorter or longer stint of employment will be based on lots of factors, of course, but here’s a tool that will help you determine what’s reasonable. The duration you can expect someone to stay with you depends on these four factors:
1) The Short/Long Sales Cycle
The shorter the sales cycle, the shorter the period of employment. Inside salespeople usually last anywhere from 2.5—3.5 years at their jobs. The good ones go on to bigger and better opportunities anytime after that.
As Harper told her CEO friend, the last two years of his employee’s time were “a gift.” And here’s why. His company has a highly transactional and relatively low-cost sale. It’s hard work, but there’s nothing particularly challenging about it once you get the hang of it, and the sales cycle is relatively short.
It’s a true hunting position. And while you can certainly make a good living while you’re doing it, the smart salesperson will feel the need to grow and move on.
Conversely, products with a longer sales cycle Ã¢â¬â almost by their very nature Ã¢â¬â will keep salespeople in your organization longer. Salespeople will be working on bigger deals and will be more reluctant to leave when there is so much “pending” in their pipeline. Longer sales cycles, with more steps in the process, seem to lock people in for a longer time.
2) The More/Less Consultative Sale
The more “transactional” the sale, the more deals can be done. In a highly transactional environment, once a salesperson is up to speed, it’s more a job of repetition than skill. At this point, and after honing their basic skills, many salespeople opt for the greener (read “bigger”) and more challenging pastures of a consultative sale.
And because consultative sales typically both take longer and often have an “annuity” element to them, salespeople are less likely to turn over quickly.
3) The Better/Worse Compensation Package
This is self-explanatory, but some managers kid themselves and underestimate just how important it is. Sure, a collegial working environment and nice perks help, but money is money — especially in sales. Solid compensation and a great benefits package will add time to your employees’ tenure and make it more painful for them to leave. Without these incentives, there’s a lot less hesitation before walking out the door.
4) The Better/Worse Extenuating Circumstances
That’s right. There could be other factors that affect how long your people stay. For example, if you have a fast-growing company that is constantly innovating, providing your sales force with new products and new markets, you can realistically add a year or two to an employee’s tenure.
Other factors such as exciting international travel or access to a corporate skybox may tip the scales as well.
The management takeaway
All things being equal, lower turnover yields higher sales. So consider these factors and how you can influence them to improve retention. For example, if you have a transactional sales force, consider building a transitional career path to more consultative sales, such as national accounts.
Or if your business model offers no such path, accept higher turnover as a price of doing business that way and keep your recruiting pipeline full.
So, the next time you have a valued employee tender a resignation, ask yourself, “How long would I stay in that job?” and answer honestly. Don’t feel bad when an employee leaves for a better opportunity that was not available to them at your company. Be proud and happy that you were part of their career growth. Only feel bad if you could have provided the next best step in their career and you didn’t.
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