A high-performing sales rep quits. A poor performer is let go.
In both cases, you think, “I wish I’d seen it coming.”
If you could predict turnover, you could better incentivize your company’s best salespeople. Or pave the way for new hires and minimize revenue losses. Rather than simply reacting to events, you could help shape them. And, in turn, help strengthen the sales organization.
In this post, we’ll show you how to gauge turnover risk. Then we’ll explain how to effectively address it.
Focus on These 3 “Flight Risk” Factors
In your “flight risk” calculation for each rep, weigh these in combination.
1. Historical Turnover
Look at your sales team turnover rates in previous years.
2. Current Quota Attainment
Stack rank salespeople based on their individual quota attainment. Do this by quarter to date, year to date, and previous year.
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Those consistently at or above quota are likelier to be picked off by your competitors.
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Those consistently below 85% risk being fired—or should be fired. If your compensation package is properly designed, these reps aren’t making money anyway. They may walk off the job on their own accord.
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Your lowest flight risk is the middle group: reps above 85% but below 100%.
3. Tenure
Make note of how long each rep has been with the company.
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A-Players who’ve been around longer are relatively stable.
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Newer A-Players are always on the lookout for new money-making opportunities. They’re a much greater flight risk.
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Long-tenured underperformers point to poor sales management.
It’s tough to nail down all of the risk factors that cause turnover. We created our Turnover Trouble Checklist to help you get ahead of the problem. We’ve compiled 13 areas you need to review for signs of turnover trouble. Go ahead and download this time-saving tool here.
Now you know where the greatest risk lies. Time to take preventive action—or prepare for the inevitable.
Bend Over Backwards to Retain A-Players
Afraid your top performers will seek greener pastures? Give them every reason to stay.
Look at your A-Players’ compensation and benefits.
How does your compensation package compare with the industry benchmark? If your plan isn’t competitive, turnover risk is high.
Create individual development and succession plans.
Look for ways to develop your best reps and improve their performance and prospects.
Offer additional incentives.
These could include SPIFFS, bonuses, and non-cash compensation.
Make sure your top performers are “plugged in.”
They should take part in strategic decision making for the organization. Make it easy for sales leadership to get their opinions. A-Players need to know their voices are being heard.
Plan Wisely to Replace Poor Performers
Yes, some poor performers (<85% quota) leave of their own free will. But most do not.
Before you terminate, consider these questions carefully.
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How much time will it take to fill the role?
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How long will it take to ramp the new rep to full productivity?
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Can you afford to hire and onboard a replacement before the poor performer leaves?
The key here is understanding how terminations will impact revenue. This will help you decide when, and how, to move forward.
Stay Alert to “False Positives”
These variables can throw off your risk calculations. They can mask reps’ true performance (landing them in the wrong risk category). Or they can increase turnover risk significantly.
Poor Territory Design
Having the same quota across all territories (“peanut butter spread”) is problematic. You could have a great rep in North Dakota and a mediocre one in NYC. Only one territory is teeming with sales opportunities. That great rep will go unrecognized, and he/she won’t stick around long.
Poor Sales Management
Do your reps suffer the indignity of having a bad boss? If so, their flight risk jumps dramatically.
Take a look at your sales managers’ historical performance. Note how often they promote team members (or whether they do at all). If they fall short in these categories, reevaluate your own hiring and coaching processes.
Off-Balance Compensation Plan
To incentivize reps, you need enough of a variable component in the comp plan. Preferably a 50/50 or 60/40 fixed variable split. A 70/30 or 80/20 split won’t cut it.
Bottom Line
No one can predict sales rep turnover with 100% accuracy. But you can make solid bets and shift to a more proactive stance. Over time, you’ll help reduce turnover—and lessen its impact when it occurs.
