On average, it can cost more than $750K to replace a sales rep when you take lost revenue, recruiting costs and training into account, not to mention the qualitative impact on customer and internal relationships. Some of these reps are simply bad hires; they were not fit for a specific role or solution sell. In other cases, they had the unfortunate luck to have a “bad territory”.
Much of the time, the reason why a rep will leave is due to poor personal performance, or more subtly due to sub-optimal performance of their managers. To amplify these cost considerations further, as a SaaS company the valuation multiple could be up to 15x lost revenue multiplied by potential multiplier, which certainly makes these numbers something worthy of your attention.
By changing the way sales personnel (especially reps and FLMs (first line sales managers)) learn their job, and how FLMs act more as sales coaches than forecasters and deal closers, companies have a much greater chance to improve productivity, increase revenues and reduce attrition.
A sales rep today has so many challenges. All the best want to do is meet with customers, build relationships and trust, develop solutions and close business. The complexity of sales – especially Enterprise sales – means that the learning curve is substantial, yet there is rarely enough time to make it all work. After a one-week onboarding class, the rep is blasted with emails and pointed to the company’s intranet (which is likely filled with out-of-date material), asked to put “everything in the CRM”, and is then faced with a Rubik’s cube of a quoting system.
At the end of the day, there’s not enough focus on learning, a problem that is largely the result of a lack of validation that the learning has been absorbed and understood. This is further compounded by the lack of support by effective FLM coaching.
The FLMs have their own challenges; from having to be ready for the weekly forecast call, spending a significant amount of time recruiting and supporting field marketing events, it’s increasingly difficult for them to invest in coaching.
What’s the Problem?
Let’s create a hypothetical. You work for a company that at least makes an investment in training. They have an onboarding program, they invest in a Learning Management System (LMS) to hold and deploy content, and they have heroic sales enablement teams develop content for annual sales kickoffs based on the latest product offerings and marketing messages. Despite all this, they still have limited success. Why?
When Mentor Group starts working with clients that are struggling to handle growth or sales challenges, we often see the following issues related to learning:
- Onboarding is focused on a limited number of topics which all needs to be squeezed into a few days. Critical information is not provided and may only be obtained later; sometimes too late to be useful. For example, we see onboarding programs that focus on HR overviews and sales skills, and not enough on the product offering and how to get things done at the company. HR overviews and sales skills are important – but they are not the only things that need to be covered.
- There is little or no “pre-boarding”. Reps show up at onboarding with instructions to check out the corporate website and that might be it.
- Reps go to sales kickoffs and get inundated with new material, with no way to validate that they understand the material.
- Ongoing learning is often done in an ad hoc manner, and by web conference, which doesn’t provide opportunity for questions and feedback.
- “Boot camps” are often offered as a reaction to sub-optimal performance, rather than to be a natural part of the learning experience. Therefore, they are often rushed and again provide little opportunity for questions and feedback.
- Reps learn about how to use complex internal systems through trial-and-error or rely on friendly sales operations analysts to do quotes or even enter opportunity updates. While systems can always be simplified, having better training and job aids available ultimately increases productivity.
- Marketing messages and product pitches change over time, and it’s often unclear which PowerPoint decks are the latest version. While good content management systems minimize the impact, as long as information is emailed by default, someone will use an obsolete pitch.
- There’s often no such thing as “lifetime learning” at many companies really dedicated to sales reps and FLMs. While a company may implement a great LMS with role-based learning plans, interactive training programs and assessments, in most cases these systems and content banks are prepared by L&D (learning and development) professionals, with limited involvement from the people that really know the business. After all, the best players are out meeting with customers, managing internal processes, recruiting and reviewing deals. There’s not a lot of time to help the new guys.
In the next post, we’ll discuss ways of making things better.