Salesperson ROI - How Long Must They Stick to Pay Off? - Part 1

Posted by Dave Kurlan on Thu, Mar 04, 2010 @ 09:03 AM

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?

There are other factors, like the compensation program.  Will an unsuccessful salesperson who is compensated mostly by salary stick around longer than a similarly unsuccessful salesperson who is compensated mostly by commission?

Does their role factor in?  Will an unsuccessful account manager hang around longer than an unsuccessful hunter?

How about sales management?  Will an unsuccessful salesperson who is either closely managed or pressured to perform, hang around longer than a similar salesperson who is not closely managed and not pressured to perform? 

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. 

Using your average margin, how much revenue must be gemerated to offset that 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? 

Objective Management Group has the raw data and plan to mine it to provide answers to these questions.  Look for my findings in the next several days in Part 2 of this installment. [UPDATE - Click here for the Top 5 Factors That Predict Sales Longevity]

In the mean time, what do you think? Can you identify any other possible variables?  

 

Topics: Dave Kurlan, sales motivation, sales turnover, sales retention, objective management group

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Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog earned a medal for the Top Sales & Marketing Blog award for six consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016, this one earned a Silver medal for 2017, and this article earned Silver for 2018. Read more about Dave.

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