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Research-Based Advice for Improving Sales Retention and Performance

There’s an urgent need for sales leaders to commit to the professional development of their reps. That was the top takeaway from a just-released survey from the Sales Management Association. According to the organization’s research, the number one reason reps leave a sales job voluntarily is inadequate professional development, including coaching and training.
Sales leaders are missing their biggest sales opportunity. Investing in your reps’ development is crucial to your success. By giving reps the time, tools, and information they need to be effective, you get them to quota-bearing status faster — and keep them on board longer. This directly ties to making your numbers.

You Need the Right Compensation and Development

We’re in sales, so yes, a LOT of what we do is about the money — and, given that, it’s not surprising that the survey found compensation to be the second-highest reason why reps voluntarily leave a sales job. In fact, Xactly’s own data shows that companies that pay at the 75th percentile or higher have 50% less turnover.

But you need both competitive pay and professional development to keep reps on board and engaged. Sales reps want the opportunity to grow professionally and work in an environment that values their development.

More than eight in 10 firms recognize that organizational culture and professional development are important. Yet, in the same survey, just 42 percent of companies say they’re actually effective in training and coaching salespeople to give them that professional development.

The Impact of Sales Turnover

It’s of huge importance to your sales organization’s success to provide that professional development.

Research has found that the average cost of replacing a sales rep is $115,000. But don’t just look at the total cost of sales turnover — look at how it breaks down. According to a report from DePaul University, $29,000 is spent replacing a rep due to acquisition costs, $36,000 due to training costs, and $50,000 in lost sales.

When reps leave, your business has to pay more money to hire and train a new one. On top of that, you lose the revenue the rep was bringing in until the replacement rep becomes productive.

To get a new rep to full quota-bearing performance takes time. According to the Sales Management Association survey, 12 months is the average time it takes for a new rep to match the productivity or quota performance of an established salesperson in your organization.

The average tenure of a sales rep is 14–30 months. Therefore, if a rep leaves after 14 months, you’ll get on average only two months of full productivity. The longer you can retain that rep, the higher the productivity for your team.

Keeping Reps Engaged and On Board

The Sales Management Association also asked survey participants to share their views on the biggest factors for sales retention. The top four included:

1.     Organizational culture

2.     Professional development, including coaching and training

3.     Job promotion opportunities

4.     Cash compensation

According to Bob Kelly, Chairman of the Sales Management Association, “Our research shows that less than half of sales leaders are satisfied with their sales rep retention. If organizations aren't investing in their reps’ professional development, they’re missing one of the best opportunities they have to improve sales retention."

Retention is Still Half of the Equation

As important as retention is, though, it’s not just about keeping them on board. By investing in reps’ professional development, you empower them to deliver optimal performance. It’s a dismal state of affairs when organizations say less than one out of five new sales hires they added over the past 24 months were successful.

It doesn’t have to be that way. Hands-down, the best coaching tool available is still your time. There’s no replacement for one-to-one time. However, there are only so many hours in a day. That time must be supplemented with continuous coaching and training.

Coaching starts with onboarding. By identifying what practices work best in your onboarding process, you can build a repeatable process to increase training efficiencies and accelerate performance.

Today’s organizations have access to innovative onboarding, coaching, and training tools — such as peer-based video reviews, mobile and on-demand training solutions, and online playbooks for every stage of the sales cycle. Everything is available at a rep’s fingertips to drive higher performance.

By committing to the professional development of your reps, you improve rep retention as well as speed time to revenue. But perhaps most important, you show reps that you value and are interested in their success — inspiring and motivating them to higher performance.

By giving reps the time, tools, and information they need to be effective, you get them to quota-bearing status faster — and keep them on board longer.”

Steve De Marco | VP of Worldwide Sales and Alliances at Xactly Corporation

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