We recently came across an interesting LinkedIn post questioning how to keep sales team members from leaving an organization… This is an interesting question, as Sales overall tends to have some of the highest turnover rates over any other department within an organization. Each time an organization loses another sales team member, it is not just the employee loss that hurts the organization. There are many downstream issues that affect the organization from associated revenue loss, recruitment cost, on-boarding cost, and potential loss of client trust. This makes sense as to why organizations should be finding ways to ensure good sales team members stick around longer.
Engaged reps are no longer spending entire careers within one organization but hop job to job every few years in search for the next better opportunity… Why has this become the case? First, over the years, it seems that the way organizations have looked at Sales has drastically changed from strategic individuals within an organization to replaceable butts in seats. As a result, Sales feels less valued by their current employers and are lured away with the hope of finding a role where they are more valued and see more potential in the long term. Let us break it down a bit and share some of the key areas we’ve seen that can affect the sales team’s morale within an organization:
- Number of Sales Reps = Revenue: Translation: butts in seats = bookings. We’ve lost count to how many executives we’ve seen build their revenue models based on how many reps they have in seats. Are they wrong in this approach? No. But herein lies the issue; they take this perception beyond their revenue models and begin to look at their sales team as a number vs. individuals and treat them as such.
- Everyone is Replaceable: When management begins to look at the sales team as just a number, they start to convey the message to the sales team that everyone is replaceable. And no one wants to feel as if they are replaceable.
One example of how an organization takes this to the extreme is Oracle. As a starter, teams that have a full head count are allocated the ability to hire a +1 rep. The sole job function of this +1 is to sit on the bench waiting for a rep within the team to leave the organization so they can fill that hole as soon as humanly possible. However, it doesn’t just stop there. Over the years, Oracle has developed a “class of” program, hiring MBAs fresh out of college and spending months training and crafting their ideal reps… These new reps are kind of like the AAA of Oracle, where once they complete training, they are given positions as Business Development Reps where they hone their skills in waiting to be called up to the Big Show. Again, this makes them a lower cost and a faster replacement option as older reps leave. Nothing makes a sales team member feel less appreciated than knowing they are 100% replaceable at any moment’s notice.
- Three Months: Three months is the average time most reps get to fix their low sales numbers before they are put on a Performance Improvement Plan to fix their numbers or be fired. Now, we agree that bad reps need to be fired; however, we find that many organizations do not take the true time to understand why a sales member is under-performing. Furthermore, we find most performance plans are configured in a way where goals are almost impossible to hit and are essentially designed to get a rep to quit or get fired. In these cases, existing reps are completely aware of these types of plans, and it always sits in the back of their minds.
- Shrinking Commission: In twenty-plus years, we can count on one hand the commission plan changes that were actually beneficial to the reps! Regardless of the organization, we’ve found that the majority of commission changes typically have a detrimental effect on reps’ commissions. It doesn’t matter how management tries to frame these changes to the sales team; they know how they are paid and will quickly see how a plan will change their compensation. Nothing demotivates Sales more than knowing they are making less money for the same work.
- Unattainable Quotas: We reviewed this in a past article, but it begs repeating. Sure, as a company grows, so should quotas. But if you have more than 50% of your reps missing their numbers, you have a problem. No one is going to stick with a company if their quotas are so high they are virtually impossible to hit.
- Career Path: Typically, there isn’t one for Sales. Very few companies actually line up a career path for their sales team, and as a result, there is almost no path for career progression. It is hard to keep anyone motivated if there is no path for them to grow. This is even more painful as they see others in other departments continuously get promoted while they remain stagnant.
- Outside Management: This is such a tough one as we see the value of bringing in a fresh set of eyes to oversee a team. However, almost nothing makes a sales team less motivated than when leadership brings in management from outside the organization. Not only does it show that management does not believe that anyone within the current team has the ability to lead, but when you couple that with the lack of career development already in place, it truly demotivates a team.
- Outside Heavy Hitter: A new successful territory becomes available or the opportunity to sell the newest product opens up, but management brings in an outside heavy hitter to take on this new role vs. an existing team member. That’s going to piss off your existing team. Why should someone that is completely new to the organization get a new and exciting opportunity while people that have been with the company for years stay stagnant? You may not believe that, but your team certainly does.
- Presidents Club: What is that? Nothing is more nostalgic than hearing some of the old-timers talking about “the glory days” of presidents club… Free family trips to Disney World, all-expenses-paid trips to the Caribbean, corporate sporting event buyouts… Sure, there are still some companies that offer these types of trips, but they are few and far between. Even if they do offer some type of presidents club, they almost never stack up to those in the past. Sure, does the lack of Presidents Club cause reps to leave? Of course not. But it certainly does not help with retention, especially when they are being recruited by other firms that might actually have a great Presidents Club.
- Random Perks: Random breakfast, lunches, or an offer to pay for a night out on the town are the little things that good companies offer reps for all their hard work and time away from their families when traveling. However, many companies do not offer these perks anymore… Again, does the lack of incentives truly make a rep want to leave? The answer is still no. However, just like the Presidents Club, perks make them feel appreciated, and they are definitely being offered by companies that recruit your best reps.
At the end of the day, sales is one of the most stressful jobs in any organization. When you really think about it, each rep essentially has to start at zero at the beginning of every month, quarter, and year… The good sales reps are always focused on how to be successful and close as much business as possible. This results in them not adopting the typical 9–5 shift and working all hours of the day. They continuously sacrifice family time for email, sales calls and travel… However, companies are increasingly devaluing the position of Sales, and they have taken notice. This is why salespeople don’t stick around for entire careers anymore. You want your reps to stick around? Make them feel irreplaceable with an obtainable quota, give them a career path, and instead of finding clever ways to pay them less, find ways to pay them more! Finally, make them feel appreciated by offering perks such as a Presidents Club and little things such as breakfast or lunches (they go a really long way). When people feel appreciated and like a valued part of a team, they will not be wondering how much greener the grass is on the other side of the fence.
Want to discuss more or need help, feel free to comment below or contact us directly at sales@3SixtyInsights.com