It’s incredibly time consuming and disruptive to identify, interview, hire, train and ramp a new sales rep – and every minute spent doing one of these activities is time NOT spent coaching the existing team, optimizing your sales process, working on deals and closing deals.
The average sales organization salesperson turnover rate is now 34%, and with the average rep needing 5 months of ramp time, sales churn is a major challenge for businesses.
Rep churn impacts both the sales team’s and the company’s ability to hit their quota targets, which in turn impacts company revenue. The business doesn’t stand still when someone leaves. When a rep leaves, the quotas that were assigned to that rep will continue to accrue, leading to an unrealized quota – which the business expects you to make up someplace else.
Additionally, rep churn directly impacts costs in the form of increased training costs for new reps. Some studies have found that the cost of one employee turnover is a third of the employee’s salary. But according to a DePaul University study, the average turnover cost per sales rep is $97,690 when you consider recruiting costs, training costs, and lost sales..
Rep churn also impacts team morale – whether the rep was let go for cause, or if the rep leaves of his or her own accord. Anytime there is turnover in any department of a business, there will be a morale hit. In sales especially, the balance of the sales environment will be thrown off with any kind of workflow disruption. Similarly, high sales rep churn can damage client relationships. When a new rep takes over an existing account, it will take time to rebuild that relationship, which may have an impact on renewals, quota, and revenue.
Finally, high rep churn makes it difficult for managers to strategize and forecast growth. If you don’t have the reps in the seat, it’s tough to predict future revenue. Smart companies can build churn into their models, but this is a complex exercise.
So how can you reduce rep churn? Here are four proven suggestions:
- Ensure career growth. Many reps leave because they feel their growth is limited. Make sure you have clear opportunities for advancement.
- Increase employee incentives. This doesn’t just have to come in the form of money. Have fun incentives for meeting quotas (everything from company swag to vacations). But also celebrate employee anniversaries.
- See your reps as people. If reps feel like their worth is wrapped up in numbers, they’re more likely to leave. Remember that reps are people with goals, families, and unique experiences. Be flexible with personal circumstances. Utilize reps’ individual talents (like a rep who speaks multiple languages), and if you see potential, offer to pay for additional training.
- Boost company morale. For reps who work in the office, they’ll want to keep coming to work if they like the people they work with and the environment they work in. Find ways to enable reps to socialize and get together both inside and outside of work.
If you have high rep churn, find out why – is it compensation, work environment, or something else? Some employee turnover is inevitable, but if you can find ways to reduce rep churn, you’ll see an impact not just in the bottom line, but in the attitude of all your employees.