employees don’t quit companies, they  quit managers”

No doubt you have heard the phrase “people don’t quit companies, they quit managers”, but have you stopped to consider what the cost of your sales rep attrition is in terms of lost revenue and/or margin? For example, Company A has 500 sales reps and an annual attrition rate (voluntary and involuntary) of 18%. Excluding any increase in headcount, the company must find 90 new sales makers annually. If the average quota for each rep is $2m, the company, based on typically time to get a new rep to full quota productivity, could be missing out on as much as $42m in revenue annually. And on top of the lost revenue and margin, how much time and money is being spent (direct and indirect) to interview, recruit and train those new hires?

SO WHY DO SALES PEOPLE LEAVE?

In almost all cases (including involuntary) it’s because they are not getting the right coaching support from their Manager. Even good reps who consistently achieve targets, will still leave a Manager if they feel their Manager adds little to no value or support in helping them improve their performance. And for the reps you let go for marginal performance, companies must first look at the quality of coaching conversations the Manager is having with the rep.

Effective coaching, by far, has the biggest impact on performance for both performing & non-performing reps – significantly more than competency training or enforcing compliance to CRM/SFA updating. Simply put, your Sales Managers should be spending the vast majority of their time having meaningful (and measurable) “how” coaching conversations with their reps. And to be clear – reviewing cadence based KPIs is NOT meaningful dialogue!

WHY AREN’T SALES MANAGERS CONDUCTING EFFECTIVE COACHING?

Our experience has identified two common causes:

1: Very few Managers know what good execution behaviour looks like. Largely, because most organisations don’t have a consistent and clearly defined understanding of what the right execution behaviours look like as evidenced by the right customer outcomes (proficiency vs competency). What little “how” conversations that do take place are often opinion and interpretation driven (rather than fact based). Because they are ineffective (or worse – create tension between the Manager and the rep), Managers simply avoid coaching.

2: Sales Leaders are too focused on forecast and/or pipeline metrics (lagging indicators) and not holding Sales Managers accountable (and measuring) if meaningful coaching conversations are taking place.

ACTION

Use our attrition calculator and find out what it’s costing your organization in lost revenue & margin.

If you want to find out how to recover this – talk to us about our field Sales Management coaching tool f.a.c.t. click here

Calculator
Current sales population
FY increase in sales head count (%)
Forecasted sales head count
Annual attrition rate (%)
Total new hires required
Average quota per sales maker ($)
Average time to ramp (mths)
Average attainment during ramp (%)
Average deal margin (%)
Potential lost Revenue
Margin impact
Gain by 25% lower attrition rate:
Revenue
Margin impact
Gain by reducing ramp 1 mth:
Revenue
Margin impact
*ramp = Number of months a rep takes to achieve quota.