Performance Sales Best Practices
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3 Things to get to ROI on new salespeople faster

Andrew Ford
By | Blog, High Performance Sales Tips, Sales Coaching, Sales Metrics, Sales Strategy, Sales Team Management | October 2, 2014 | Comments (0)

The formula for salesperson success at many companies is nothing more than activity goals, hard work, and self-discipline.  It is a “sink or swim” mindset founded on the belief that sales is an individual discipline performed by aggressive “go-getters”.

This formula’s premise is “experience is the best teacher”, and that successful salespeople are quick studies who “figure it out fast” and win. It is not that this old way never works; it simply does not work often enough.  Experience is a great teacher; it is just slow and inefficient.  This “sink or swim” formula is the cause of long lead times, high turnover, and poor sales team ROI.

Here are 3 things to do that will get to ROI faster.

1. Have a success formula

Companies with a success formula that they know works, and why it works, have the shortest salesperson ramp up period.

These companies have collected the skills, knowledge, habits and behaviors of their best salespeople into a playbook that is teachable to the team.

Here is what those Playbooks include:

  • Where we win as a sales team and how to find those prospects
  • Why we win, and how to help the customer understand why
  • What to do in our plans and activities that will lead to wins
  • How our sales systems work inside the team and with the rest of the organization
  • How we will be measured
  • What we are expected to know
  • When we are expected to know it

2. Validate your hires: Test, test, test

Delaying the confirmation of your sales hire until after they are ramped up is a major contributor to the short 2 1/2 year average salesperson tenure.  Companies end up waiting until the ramp up period is over to see if the salesperson can get to quota.  This is because they use sales results as the primary measure of sales performance, and this is a big mistake.  Sales results are a trailing indicator, and with sales cycles of 3, 6, or even 12 months, they take too long to prove the fit of the salesperson.  It is like trying to drive a car staring at the odometer when what is needed is a speedometer.

We need leading indicators to tell us how fast we are going

Leading indicators are efficiency marks that can be compared against team and industry benchmarks from the very beginning.  They should include:

  • Testing sales skills to confirm the foundation is there or is being learned
  • Going beyond activity goals to activity efficiency goals to measure effectiveness
  • Benchmarking the results to accelerate the formation of a high performing team: know what good looks like!
  • Creating plans for juniors to track the rate of skills acquisition:
    • Are they learning fast enough?
    • Do they get good efficiency results from their activities?
  • Confirming the claims of seniors made in the hiring process:
    • Do their networks lead to new business opportunities quickly?
    • Are their activity efficiency scores better than the juniors?
    • Do they score high marks in the sales skills testing programs?

The first 90 days are a critical time to test and measure the fit of new hires; therefore, it is critical to have a plan to validate the hire by know the leading indicators of success in your teams.

3. Development is cheaper than recruitment

Turnover costs money, a lot of it: a conservative estimate is 150% of salary.  Consider these factors to understand the estimate:

Direct costs

  • Recruiting costs including external recruiters, manager time, advertising, and job fairs
  • New hire orientation costs including trainers, training room overhead, and/or salesperson travel to training
  • Manager time to train
  • Low contribution margin during ramp up time to productivity (See last month’s blog)
  • Customer loss/loyalty issues

Indirect costs

  • Management distraction – constantly working with new hires, and underperforming salespeople trying to get them to productivity  (See “First Break All The Rules”)
  • Low morale in a team that has high turnover, unproductive and unhappy salespeople
  • Brand reputation harm, both internally and externally, that comes with high salesperson turnover
  • Limited team support for learning and deal tactic innovation
  • In businesses with smaller sales teams the turnover has a huge impact on company growth rates

High turnover in your sales team seeps into the morale, performance and results of the entire organization.  It creates a negative culture that weakens the business.  Despite all of this, many sales leaders and business owners take the approach that says, “Until they (new salespeople) prove they are worth it, I am not going to invest in them.”

Start the Development Track on Day One

The better way is to invest in a concentrated development model.  Use the testing in the ramp up phase to filter out the bad fits early on, and then dedicate the investment, time, and resources into an optimal environment (our next blog will describe what this environment should look like) that gets the good fits to success fast and keeps them there longer.

Consider this: Salespeople seldom leave jobs where they are making money!

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