Sales Leaders Need to Mentor Reps Toward Success
For many sales organizations, the pattern often exists — 20% of the team is doing great, 20% is onboarding/ramping and 60% is in a sort of purgatory, neither thriving nor failing. Is this success distribution acceptable? If not, how do we correct it so that more salespeople are succeeding (making quota) and staying with our organization?
Many large software companies, such as SAP and Salesforce accept (even embrace) this model, as they realize that 80% of the bookings are coming from 20% of the people and everyone else is expendable (almost encouraged to turn over after 18 months of indentured servitude). This model is designed to minimize commissions without (hopefully) sacrificing bookings.
Of course, the alternative model is for 80% of the sales reps to make goal with 20% onboarding/ramping. So how do we create an environment for the second model, instead of the first model? This brings us to a more basic question; why do salespeople leave versus what is the excuse sales reps give for leaving?
The excuse sales reps use for leaving is almost always, “I got a better opportunity.” But what does that mean? More money? Hotter product space? Future boss making lots of promises regarding pending sales pipeline?
Lurking in the background is the financial cost of sales attrition. At a minimum, the cost of replacing a salesperson is $300,000 when recruiting, ramp up, opportunity costs are considered; therefore, a sales team of five sales reps that turns over even two sales reps per year is costing itself $600,000 per year. This is a difficult number to overcome for any sales organization.
Sales reps are most vulnerable to the barrage of recruiter calls they receive when they are unhappy; this is ironic, because the sales reps that receive the highest volume of calls are the most successful ones. So why do sales reps leave?
Fundamentally, sales reps leave for three reasons (in no particular order): 1) they believe their territory is bad, so opportunity is limited; 2) they hate their bosses, so they can’t focus on doing their jobs and 3) they believe the comp plan is limiting their earning power.
How do we pre-empt these conditions? All too often, sales leaders (consciously or unconsciously) feed the top reps the potentially most lucrative opportunities helping the rich stay rich and ensuring the poor stay poor. In the end, too many sales leaders care only about their bookings target and not enough about the morale of the overall team.
The trick is for the sales leader to have empathy for each sales rep and mentor each rep toward success. It starts with basic fairness — fairness in territory assignment and fairness in incentive compensation. In other words, sales rep attrition is primarily a leadership problem that manifests itself into a sales rep attrition problem.
If your sales organization struggles to retain salespeople, please feel free to email dave@moicpartners.com for guidance on strategies to mitigate this challenge. Learn more about making your sales team better 30 days from quarter's end (apply here to test your hand at getting better).