they had to be terminated. There is another often-overlooked wrinkle here in that sales manag- ers end up spending an inordinate amount of time coaching poor performers who may end up walk- ing away or let go. The time until they quit, or are terminated, can be substantial. In the meantime, they are like cars with leaky gas tanks – wasting the money companies keep having to pump in.
A SIMPLE ILLUSTRATION For the sake of argument, let’s illus- trate this with an example. Granted, the numbers are arbitrary, but not outside the bounds of reality. In this scenario, the high sales performers are those with sales of $850,000 or more. Mid-level sales performers have sales of $650,000. Low performers sell $450,000 or less.
That gives a sales gap of $400,000 between the highest and lowest sales
performers. To be conservative, we will use only the difference between the mid-level performers and the bot- tom sales reps ($200,000). If the com- pany hires 50 new salespeople per year, and only 10 are poor performers (20 percent), that still means a loss of $2 million dollars in sales alone.
HIDDEN COSTS
This does not even count the cost of sourcing, recruiting, onboarding and ramp-up time. (As a rule of thumb, ramp-up time = length of sales cycle + 90 days.) The aforementioned study also showed that the sales rep is only likely to stay in that position just shy of 24 months. Simply filling a slot can easily run $10,000-$15,000 or more per rep. If the sales rep does not hit the
ground running, you have a problem. The truth is that companies cannot afford to make costly mistakes when hiring. Rather than patching up a
‘‘
We become what we think about. – EARL NIGHTINGALE
clunker, companies must focus on actively targeting the most qualified candidates right off the bat. Poten- tial sales reps have to be rigorously screened before driving them off the lot. It simply costs too much to have a poor performing sales rep blow a gasket down the road. Jamie Crosbie is CEO and founder of
ProActivate. ProActivate uses a unique staffing procurement model that combines dedicated resources, such as behavior analyses, with an in-depth interviewing process. ProActivate guarantees that only highly qualified sales professionals will be offered, matching your company needs with the top talent you deserve.
“
Companybook has become an essential tool for our
sales and marketing teams. The quality and robust nature of the information lead us to eliminate several third-party services. More importantly it has become
our go-to resource tool for prospecting, stakeholder identification, and key account development around the globe.
”
Kimberly Carroll, VP Global Marketing Apex Supply Chain Technologies
www.companybook.us SELLING POWER OCTOBER 2016 | 17
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