LOWER SALES TURNOVER AND BOOST REVENUE

There will always be a certain amount of turnover in all industries and professions. That’s normal and expected. In fact, research states the average turnover rate for all industries and professions is about 13%. People leave jobs all the time for many reasons. However, in the sales industry the average annual turnover rate has been reported as high as 35%. This means the average turnover rate in sales is three times (3X) higher than the average employee turnover rate. This is significant because sales turnover cost companies millions of dollars a year in lost revenue and negatively impacts employee morale and performance.

According to a recent Gallup report the cost of replacing a salesperson can range from 1.5X – 2.0X times the employee’s salary. This means, for example, if you lose a salesman who was making $70,000, you can expect to lose upwards of $140,000 by the time you refill that position. Turnover costs include: - administrative costs to terminate an employee, the costs to recruit and hire a suitable replacement, the vacancy costs (lost revenue) incurred by how many days the job is vacant and generating no revenue, and the productivity costs associated with how long it takes the new hire to get up to speed which could be more than a year.

One major reasons why salespeople leave a company is a lack of training. A ‘sink or swim’ management mentality does not equip salespeople with the critical information and selling strategies they need to be successful. All salespeople want to be successful but they need to be properly trained how to maximize time, effort and corporate resources with accounts in their territory that have the greatest real ‘sales potential’. Even experienced salespeople need this kind of training because these skills are not taught in college nor offered by other sales training companies.

Gallup says it takes about 6 months of training and 15 months of selling for new salespeople to become top level performers. Interestingly, 52% of salespeople who leave their job (voluntarily or involuntarily) admit their manager or company could have prevented them from leaving by providing effective training. Recruiting and onboarding new salespeople is much more expensive than teaching the ‘analytical skills’ they need to become top performers, constant ‘quota busters’ and effective mentors to new-hires.