A quick Google search or skim through your favorite sales blogs will show article upon article about how to hire the perfect reps, increase customer retention, and write the perfect sales job description -- for good reason.
Even right here, on the HubSpot Sales Blog, I know an article on "How to Hire the Perfect SDR" will almost always be a hit. In fact, two of our top-performing posts of all time are "40 Sales Interview Questions to Recruit the Best Reps" and "10 Common Sales Job Interview Questions and How to Answer Them." They bring in thousands of organic views to our blog each month, which means thousands of people actively search for this information regularly.
But what if this isn't a good thing? What if it's time we stopped writing off five-year lows in sales job tenure simply because it's a tough job full of high standards and a lot of rejection. What if we spent less time learning about how to interview the perfect sales rep and more time on developing and investing in the reps we have?
What if the biggest threat to sales teams isn't losing clients, but losing our teammates themselves?
- How Fast Are Salespeople Churning?
- Why Are Reps Actually Leaving?
- What Can Sales Managers Do About Sales Turnover?
- How to Manage a Sales Team
How Fast Are Salespeople Churning?
A 2018 report by the Bridge Group shows average rep tenure now sits at 1.5 years. That might not sound too bad -- but when you consider average SDR ramp time is currently 3.2 months, you're already down to a little over one year (15 months) of full productivity from your average sales rep.
In 2010 -- a mere eight years ago -- 44% of respondents reported an average sales tenure of more than three years. Today, a mere 8% report that kind of longevity in their sales jobs.
Why Are Reps Actually Leaving?
Job satisfaction is low
Why are salespeople churning at such alarming rates? Well, a 2018 survey by Marc Wayshak reported only 17.6% of respondents rate their job satisfaction as "outstanding" and a whopping 47.1% rated their jobs as just "good."
In the same survey, salespeople who spent more time on sales-related activities enjoyed their jobs more. In fact, there was a notable jump in job satisfaction between reps who spent three hours or less on sales-related activities and those who spent four or more hours each day on sales-related tasks. Those who spent four or more hours on sales work rated their job satisfaction at a 3.8 out of five.
Culture and management expectations are high
Wayshak's study also showed company culture and management effectiveness matter a lot to salespeople. They're so important the average rep rated these two factors as more important than base compensation, commission, job role, and job flexibility.
Sales stereotypes are alive and well
Reps know they aren't liked. A word cloud in Wayshak's study showed the most common words respondents used to describe their average buyer's perception of them were "pushy," "untrustworthy," "annoying," "Time," and "Greedy." Ouch.
Promotions take longer than the average tenure
Lack of promotion might also be a reason reps churn quickly. The average rep tenure sits at 18 months and the average time a rep spends as an SDR prior to an account executive promotion is between 13-18 months. It's not much of a leap to say reps are impatient for a promotion and jump ship before their managers get the chance to offer them one.
What Can Sales Managers Do About Sales Turnover?
Hire more experienced reps
The same Bridge Group report found hiring more experienced reps led to longer average tenure and more months spent functioning at full productivity. While it might be tempting to hire a BDR right out of college for a lower cost, consider investing in a rep with a few more years of experience and the know-how to hit the ground with a shorter ramp time.
Prioritize culture and management training
Based on Wayshak's finding salespeople value good company culture and great managers more than compensation, consider spending more time and resources on training sales leaders and promoting a healthy, supportive, and growth-driven culture on your team.
A CSO Insights survey reported the average sales leader spends just 20% of their time helping their team close deals. No one wins in this scenario. Your deals suffer, and your reps view their opportunities for mentorship and career development as few and far between. Which brings me to my next point.
Communicate clearly around promotions
Talk to your reps regularly about how they're doing and where they're tracking on the path to promotion. Millennial salespeople are part of the fabric of our current workforce -- and 25% recently said they plan to leave their current job within a year. In the same Deloitte survey, 44% said they planned to leave their job within two years.
Give them a reason to stay. That starts with never leaving them wondering where they stand on performance or career path. Provide consistent feedback and meet with them regularly in one-on-one meetings to see how they're doing -- beyond their quota.
Manage rep performance
Sales executive Norman Behar says, "While there's a lot of emphasis placed on sales coaching and leadership, the most fundamental skill sales managers need to develop is often overlooked: The ability to manage sales performance."
Many organizations take it for granted that their managers know how to effectively manage performance. Unfortunately, this is a huge mistake.
While many sales managers may have produced excellent results in their prior roles as sales reps, Behar says this doesn’t necessarily translate into the ability to get their teams consistently generating great outcomes.
He suggests the problem lies in the focus on results as opposed to the sales behaviors creating results. Wayshak's survey saw 81.6% of top performers spending four or more hours on sales related activities such as asking for referrals, prospecting, taking sales meetings, and following up. Each of these is a behavior, rather than a result.
This issue, Behar says, is driven by today’s CRM systems, which provide real-time measurement and reporting of results.
"While it's helpful to monitor this information," Behar explains, "It's important to note it's rear-view data. These metrics are based on events that have already occurred as opposed to the underlying behaviors (leading indicators) that drive outcomes."
Manage the right behaviors
Many reps are goaled on the number of pitches they give. But this not be the right behavior to track. In Wayshak's survey, only 7% of top performers reported pitching regularly, while 19% of non-top performers reported pitching their offering regularly. A pitch doesn't necessarily equal a successful or meaningful behavior.
Behar explains sales organizations should carefully think through the key results they want to monitor and determine what behaviors will drive these outcomes. "The key distinction to keep in mind is that results (lagging indicators) should be monitored, while behaviors (leading indicators) should be monitored and managed," he says.
Here's an example highlighting the difference between results and behaviors:- Desired result: New customer acquisition
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Key behaviors:
- Developing a territory plan including a comprehensive list of prospective customers
- Creating account plans that map the key decision makers and influencers
- Setting first time meetings with prospective customers
- Adding new opportunities to sales pipeline
Behar notes, "It's important to limit the number of key results you want to monitor. Too many desired outcomes could lead to an exponential number of behaviors." He explains, "For instance, if a sales organization decided to monitor 10 results and each result tied to four behaviors, managers would need to monitor and manage 40 behaviors -- that's not sustainable."
From a practical standpoint, Behar suggests focusing on the two or three most important results and manage the corresponding eight to 12 behaviors that drive those results.
Once desired results and corresponding behaviors have been identified, managers should turn their attention to managing performance by following these steps inspired by Behar's work:
1. Prioritize onboarding
It's tempting to throw reps into selling with a wink and a prayer, but while it might solve for your immediate goals, it will be detrimental to your long-term growth and rep success.
Create a comprehensive new hire onboarding checklist and facilitate each new rep's completion of that checklist and accompanying trainings.
2. Communicate performance expectations
Set rep expectations early and check on those expectations regularly. For example, if you expect reps to make 15 prospecting calls a week, ensure that expectation is clearly outlined in their onboarding documents.
Don't simply tell them once and expect them to remember. Make those expectations a normal action item to check in on in their routine one-on-ones.
3. Monitor and manage specific behaviors
Reps may fall into specific habits or behaviors without realizing it. Sit in on one of their calls or demos at least once a quarter and provide feedback on what you witness.
If they're not great at wrapping up the call and touching on next steps, make an actionable recommendation that they shadow a rep who closes meetings exceptionally well.
4. Set goals and monitor results
Every salesperson needs goals. Period. Determine what key performance indicators (KPIs) are important for the growth of your business and set realistic quotas and goals around those KPIs.
5. Provide regular feedback
Feedback is crucial to improving and growing. Make sure you're not the only person giving your reps feedback. Set up a monthly or bi-weekly "film review" where a new rep is in the hot seat each week receiving constructive feedback on how to improve and what they're doing well.
6. Invest in ongoing training
Don't stop at onboarding. Have great reps present lunch-and-learns on the skills they excel at, encourage reps to identify conferences and seminars that will contribute to their professional development, and bring in speakers/coaches who will build the team up.
Training is an investment in the present and future of your company's success. Make sure it's a priority.
7. Establish compensation expectations
Don't wait until your rep brings up compensation to discuss it. This should be an ongoing conversation you're having with all your reps to ensure they're feeling valued and rewarded for the work they do.
If their work isn't meeting the compensation guidelines, that's when another conversation about their performance should happen. Don't wait until that conversation revolves around putting them on a performance improvement plan.
"Going back to our example on new customer acquisition," he says, "A manager can now communicate the number of new customers they would like the salesperson to acquire, the specific behaviors that will lead to those results, and the timeframe for completion."
Most importantly, Behar recommends managers provide ongoing feedback. "This should include offering encouragement based on achievement of key behaviors (e.g., "set 10 first time appointments last week"), and proactively discussing any performance gaps (e.g., "I thought you were going to submit your account plans last Friday and I haven’t seen them yet") while there is still time to course correct," he says.
Ultimately, sales managers live in a results-based world but their ability to achieve those results depends on managing behaviors. Acknowledging this distinction is critical to your sales team's success -- as is increasing rep retention and happiness.
