There are few careers in which the failure rate is as high as it is in sales. According to CSO Insights, salesperson turnover hovers around 23% across the industry, which means that out of every 100 new hires, 23 of them will either quit or be fired.
High turnover impacts the entire organization, with direct and indirect costs totalling far more than is generally accounted for. In addition to direct costs, turnover in the sales department also leads to lost revenue, gaps in account coverage, and the cost of management time spent interviewing and onboarding new hires. According to the book “Topgrading,” by Brad and Geoff Smart, the average cost of a failed sales hire can be six times base salary and 15 times base salary for a manager.
It’s tempting to account for high turnover by pointing out the natural pressures of the sales career, and thus pass the blame to the employees themselves. However, there is plenty of blame to be laid on the organization. Here are four common ways organizations cause their new hires to fail.
One: They hire the wrong people
Success in prior sales positions does not necessarily translate to success in your organization. Neither does a charming and outgoing personality. Even a “large rolodex” is no guarantee unless the rolodex happens to match up with your ideal customer profile and the connections in it are more than casual and the salesperson is skilled in making the type of sales required.
Successful hiring begins with a clear understanding of the qualities that successful salespeople in your organization share. In addition, a good hire will be willing and eager to master new skills and learn your organization’s process and methodology.
Two: The training is poor
Many organizations consider their job complete when the new hire is brought on board. They toss them into a sales group and expect them to “hit the ground running.” Training may consist primarily of product training with perhaps a little guidance and oversight from colleagues or managers. Any methodology or skills training involves a day-long seminar or online training here and there.
This approach to training is always inconsistent, but it also carries the risk of turning potentially good salespeople into terrible salespeople - thanks to the Dunning-Kruger effect.
The Dunning-Kruger effect says that a person’s confidence in their knowledge and abilities is highest when they know a small amount about a topic. As their competency approaches average, their confidence declines, only to slowly grow again as they approach expertise.
When salespeople are offered a small amount of training, it can have the effect of raising their confidence without raising their competence, which leads to poor performance. Keep in mind the Dunning-Kruger effect during hiring, as well, and avoid hiring people with an over-inflated sense of their own competence.
Three: They assume salespeople already know how to sell
Aside from a small amount of training, many organizations assume that a salesperson with a good track record will be able to jump in and start selling effectively from the start. Because their top performers seem to do their job “by instinct,” sales leaders assume that all good salespeople should do the same.
As a result, many potentially good salespeople end up leaving in frustration when their old methods of selling don’t work in the new environment. High performing organizations put systems in place to capture the best practices, behaviors, and skills of their top performers, and make those best practices accessible to new salespeople. Additionally, these best practice behaviors are trained and reinforced by the system.
Four: Their sales process sits in a binder on a shelf
Countless organizations hire consultants every year to develop a formal sales process. Often, these processes then sit in a binder on a shelf never to be dusted off again. This is unfortunate, because a well-designed sales process is the number one key to helping new hires get up to speed quickly and perform at the level you expect.
An effective process must be accessible and easy to reinforce. Instead of a binder on a shelf, it should be located directly inside the salesperson’s workflow. The right technology will guide new and old salespeople through the process and provide them with training, coaching, and sales enablement content when they need it during the course of their work.
We built Membrain to serve as the backbone for an effective onboarding and sales effectiveness system. It can help systematize your sales process, capture best practices, reinforce training and the right behaviors, and provide coaching insights to ensure your new hires get everything they need to succeed.