5 Surprising Factors to predict sales staff turnover and longevity

Dave Kurlan is the producer of the world beating Objective Management Group (OMG) evaluations of salespeople performance. Over last 20 years his company have evaluated close on 500,000 sales people in over 8,000
companies across most industries. Their data is statistically
significant in the big league. You can read his excellent article here
I am grateful to him for his material which provides the core of
these comments.

In our opinion Dave has the best analysis tools around and his data is an astounding resource for determining the shape of your salesforce and how best to structure and manage it.

Is there a connection between sales success and tenure?
Is it really a given that a successful salesperson will stick around longer than an unsuccessful salesperson?

What about other factors like the compensation?
Do unsuccessful salespeople who are compensated mostly by salary stick around longer than a similarly unsuccessful salesperson who is
compensated mostly by commission?

How does role factor in?
Will an unsuccessful account manager stay around longer than an unsuccessful hunter?

How about sales management?
What is the impact of close management or pressure to perform, have on how long a salesperson will hang around compared to a similar
salesperson who is not closely managed or who is not under the same
pressure to perform?

What is your RoI for a salesperson?
Let’s say you have a 12 month sales cycle and an 8 month learning curve. Essentially, it will take nearly 2 years to get your new
salesperson producing consistently. In that 2 years, maybe you’ll pay
out close to £150,000 in subsidies.

So if you take your average margin, how much revenue must be generated to offset that £150000 subsidy?
How much revenue much be generated to produce a satisfactory ROI?
How long must the salesperson stick around in order to produce that ROI?
If we can predict longevity, does that help you determine whether you
will realize a ROI with a sales candidate?

How will a combination of longevity,performance and ROI determine how and where you employ different types of sales performer

In the last week Dave has been mining the OMG data looking for the figures and facts behind salespeople turnover and came up with some surprising results

Salesperson Longevity – What Did the Numbers Demonstrate?

Some of the intuitive factors just weren’t there.All top salespeople who stay are motivated by the money

Wrong. Not even a scintilla of difference. A money motivated salesperson is not even 1% more likely to stick than one who isn’t motivated by money.

So may be the salespeople who were paid mostly on salary might tend to stick around longer than their colleagues who were paid mostly by commission. Wrong again .

Well I always assumed that stronger salespeople stuck around longer than weaker salespeople. Wrong yet again.

Top Five Factors to Predict Sales Turnover / Longevity

So Dave tells us the most important factors in predicting sales longevity are —

1 Experience.
It takes 5 years of sales experience for a high degree of certainty that someone will stick with you

2 Management
Close management by you will increase the time you keep a salesperson. Letting them do their own thing, follow their own way and their own process will simply reduce the chance they will stay with you.

3 Money
High Salary lower commission = shorter time in the job. The higher the commission element the more chance they will stay with you

4 Reverse Ramp up quickly
Sales people who “get it” quickly are less likely to stay with you . The
sales people who ramp up quickly are LESS likely to stick.
Those who take more time to get going are likely to stay longer and
produce more.Slow starters, big finishers!

5 Counter Intuitive Ramp up ability
Strong salespeople have – A Players – aren’t the ones who are most
likely to stick. Salespeople with SQ’s B Players – have the greatest
sales longevity.

Summary Good news, bad news and news to help you plan

The good news is that there are five specific s that enable prediction of sales longevity.
The bad news is that these 5 are inconsistent with these that allow us
to identify top performers will be. According to OMG only 16% of the A
players with experience stick for more than two years.

So it raises some big questions.

Where is your business, your products and your divisions?. Do you need fast producers or consistent, longer term results? how do you create balance and how can you keep giving the A players new challenges
to retain them?

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