The Top 5 Factors to Predict Sales Turnover

Posted by Dave Kurlan on Fri, Mar 05, 2010 @ 05:03 AM

Yesterday, I began a discussion about sales longevity or, if you prefer, turnover.  What are the factors that lead to turnover and how much of that can be predicted?  Start with yesterday's article on How Long Will a Salesperson Stick?

Get ready for a discussion that is backed by data - more Science of Sales Force Management stuff!  Speaking of science, my guest on this week's episode of Meet the Sales Experts, Lee Levitt, had a lot to say about Pipeline Coverage and Shape, metrics and 5 powerful tips for Sales Force Effectiveness.  Click here to listen to the show.

Salesperson Longevity - What Did We Find?

I mined the data and it wasn't easy!  Some of the factors I expected to see just didn't materialize. For example, I assumed that money motivation would make a difference.  Wrong.  Not even a tiny difference. A money motivated salesperson is not even 1% more likely to stick than one who isn't motivated by money.  I assumed that salespeople who were paid mostly on salary might tend to stick around longer than their colleagues who were paid mostly by commission.  Wrong.  I thought that there was a chance that stronger salespeople stuck around longer than weaker salespeople.  Wrong again.

So what did I learn?  Here are the Top Five Factors to Predict Sales Turnover / Longevity

The most important factor in predicting sales longevity is --- EXPERIENCE!  Salespeople with at least 5 years of sales experience are far more likely to stick than those without 5 years of experience.

Factor #2 has little to do with the salesperson but everything to do with Sales Longevity.  It's how closely sales management will manage the salesperson.  Salespeople who were not closely managed simply didn't stick around as long.  I had to draw a conclusion relative to whether the turnover was voluntary or involuntary. I concluded that salespeople who were more or less ignored and also under performing likely reached a point where the company gave up and terminated them. I also concluded that salespeople who performed but were ignored probably left on their own.  But whether or not you agree with my conclusions, don't miss the bigger point.  Closely managing your salespeople leads to sales longevity in your company.

Factor #3 is the compensation plan.  Salespeople who are compensated mostly by commission are more likely to stick than salespeople who are compensated mostly by salary.  Why? Salaried salespeople and those with limited bonus opportunities, reach a point where they need more money.  Does this contradict the money motivation finding?  No.  This is need versus want.  They'll leave when they need more money.  Money motivated salespeople simply want more money and sell more to earn it.

Factor #4 is a reverse factor finding.  Huh?  Objective Management Group (OMG) has a powerful finding called the Figure it Out Factor or FIOF.  It's a score that accurately predicts how quickly a new salesperson will ramp up in their new positions.  A score of greater than 75 identifies candidates in this group.  Well, these same salespeople, the ones who will ramp up more quickly, are LESS likely to stick!  Yes, they'll have an immediate impact, but they will tend to not have sales longevity in your company.  Salespeople with low FIOF scores are the ones who are most likely to stick.  Slow starters, big finishers!

Factor #5 is another reverse factor finding.  OMG has another score called Sales Quotient (SQ) which allows companies to rank their hirable candidates. Strong salespeople have SQ's over 135 and the elite have scores over 145.  But these real strong salespeople - A Players - aren't the ones who are most likely to stick.  Rather, salespeople with SQ's between 110 and 130 - B Players - have the greatest sales longevity.

Summary:The good news is that there are five specific factors that allow us to predict sales longevity.  The bad news is that these factors are inconsistent with the factors that allow us to identify and predict who the top performers will be.  So it raises a new question.  Should you be striving to hire A Players - those with high Sales Quotient and Ramp up Scores or should you be hiring for Sales Longevity - B Players who will stick around longer?

Verne Harnish, the Growth Guy, and I had this very discussion  over email this morning.  He said, "small companies can do both".  He said that "entrepreneurial firms should go after experience - we don't have time to ramp up someone - let the big companies train!" He also said that "companies should go for A players with more than 5 years of experience", something that  both Neil Rackham (SPIN Selling and Rethinking the Sales Force) and Brad and Geoff Smart, (Topgrading) have been saying right along.  However, our data shows that only 16% of the A players with experience stick for more than two years. And that brings us back to the original question. 

What do you think - A's or Longevity?  Should the answer be a direct relation to the length of your sales cycle?  Should you go for longevity when you have a long sales cycle and for A's when you have a short sales cycle? We're interested in what you have to say!

Topics: sales assessment, sales recruiting, sales management, sales candidates, sales turnover, Neil Rackham, topgrading, verne harnish, money motivated salespeople, salespeople, sales experience

Sales Process - 5th of the 10 Kurlan Sales Competencies for Buildling a Sales Culture

Posted by Dave Kurlan on Sun, Oct 18, 2009 @ 07:10 AM

This is the 5th in my series of The 10 Kurlan Sales Competencies That are Key to Building a Sales Culture.

#5 - Get a Sales GPS

These days you wouldn't think about getting into your car and driving to a new destination without typing the address into your car's navigation system.  Why?  Several reasons:

  • fear - you don't want to get lost
  • first impressions - you don't want to be late
  • stress - you don't want to worry about it
  • progress - you want to know how far away you are
  • safety - you want to watch the road, not read directions 
  • control - you don't want any surprises
  • efficiency - your GPS knows the way to carry the sleigh

There are probably more but you get the gist of it.  And selling is the same way.  Each one of those 7 reasons for using a GPS applies to a sales cycle, so it makes sense that your sales force should have a sales GPS or a process.

My guest on last week's episode of Meet the Sales Experts discussed the importance of having a process driven sales force. Yet, Objective Management Group's statistics on assessing more than 450,000 salespeople and 8,500 sales forces shows that  fewer than 15% of them have and/or use a sales process!

In an age where so many of us are talking about Sales 2.0, most businesses haven't even adopted the simple Sales 0.0 best practice of having a sales process.

Surprised?  You shouldn't be.  Most companies still see selling as something that the sales folks should intuitively know how to do but the statistics prove that not to be the case.

Even with companies that are well-known for their efficiencies, controls and processes; even in the divisions led by executives who had successful sales management careers; even when leaders told us that they had implemented sales processes; the evidence just isn't there.  The data still shows that even when companies believe they have introduced a sales process, the salespeople and the sales managers don't use it.  There are several possible reasons:

  • They introduced an inefficient process that wasn't intuitive, memorable or applicable
  • The process could not be utilized in their business - it didn't fit
  • There was a lack of commitment to follow the process
  • The company failed to integrate training and reinforcement on how to apply the process
  • The trainer was ineffective and failed to make it easy and fun

There are 5 things that companies should be doing right now - whether it's about sales process or excuse making - another topic we spent considerable time discussing on the show.

  1. Invest in your people
  2. Assess for strengths and weaknesses
  3. Develop your sales force and its capabilities
  4. Topgrade your sales force and get the right people in the right seats
  5. Position the sales force now to take advantage of the upturn that is coming
Click here to listen to the show. 

 

Topics: sales assessment, Dave Kurlan, sales process, sales training, Sales Force, topgrading, bob lobos

Topgrading Pros, Cons and Sales Assessments

Posted by Dave Kurlan on Sun, Feb 22, 2009 @ 23:02 PM

Somehow, I got thrown into the middle of an internet disagreement between Brad Smart, author of Topgrading, and Bob Corlett, a blogger who calls himself The Staffing Adviser.

The best way to follow this interesting blogersation on two separate websites is on Jonathan Davis' blog, An Insider's Guide to Recruiting on the American Workforce web site.

I think very highly of Topgrading.  The Proprietary Recruiting Process (STAR) that we help companies build and develop for hiring top salespeople is very compatible with Topgrading.  One of the differences in our two approaches is that Brad didn't suggest incorporating assessments, including our world-class highly predictive sales assessments, into the Topgrading process.  So naturally, our process includes the assessment.

Verne Harnish, Founder and CEO of Gazelles, is a big Topgrading fan.  He's also a big fan of OMG's Assessments, so much so that we've partnered with Gazelles International and developed a Gazelles version of our Sales Force Evaluation.  In this version, all of our insights are delivered in the jargon of Rockefeller Habits.  I love this version!

So when it comes to recruiting salespeople, what can we learn from all of the back and forth and pros and cons and structure versus gut and discipline versus experience?

I can tell you this.  If you hire the right salespeople in the first place, you'll save time, money, aggravation, and reverse flat or declining revenue.  If you hire the right salespeople you'll motivate the rest of your team. If you hire the right salespeople you'll raise the bar.  If you hire the right salespeople you'll grow revenue.  And to hire the right salespeople you need an effective process,  a predictive sales specific assessment, sales managers that have been trained to interview salespeople, and an effective, comprehensive, 90 Day On Boarding Process.  Without them, you're back to hoping for the best and as we know by now, hope is not a strategy.

(c) Copyright 2009 Dave Kurlan

 

Topics: Dave Kurlan, sales recruiting, sales candidates, hiring salespeople, topgrading, sales tests, sales assessments, Sales Advice, 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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