High Turnover on the Sales Force – What Does the Future Hold?

There are a number of industries where high turnover on the sales force is the norm.  Insurance, Real Estate, Telecommunications, Copiers, Direct Sales, etc.  My editorial addresses these issues.

Stop thinking about reducing the turnover and start thinking about the beliefs that cause the turnover.  In my opinion, the following 5 problems are to blame:

1. Acceptance – You are guilty of believing and saying “that’s the way it is in our industry” as a primary excuse for the high turnover.  The excuse making has to stop before anything can change.

2. Compensation – How many managers are paid bonuses, based not on the effectiveness of their people, but on the number of bodies in their employ? This just perpetuates a bad model.  To compensate for the lack of candidates who are retained and who succeed, let’s make sure our managers go out and hire more of the wrong people!  Even power in numbers can’t make that model work.

3. The Candidate Pool – This is populated mostly by recent graduates.  They may not cost very much but they don’t generate much revenue either.  And those who stick it out may take months to generate meaningful revenue. What would happen if you paid more money for candidates that had better odds of success and were more likely to succeed quickly?

4. Selection Process – In your industry the candidate only needs to pass the stethoscope test. Why select a candidate if there’s little chance of success?  If you were more realistic about who had enough desire and commitment to overcome the adversity they would face, and who had the strengths to neutralize rejection, resistance, competition, fear, pressure, stalls, objections and put-offs, you would be far more successful, a lot more often.

5. Development – All the development in the world (coaching, training, mentoring, and practicing) along with all the pressure to produce, has no impact if you’ve selected the wrong people.  On the other hand, even if you selected the right people, unless your development is consistent, comprehensive, powerful and effective, your new salespeople will still fail.  You must prepare your new salespeople for success rather than allow them to flounder so they can fail.

Most of the companies in these industries make money despite it all.  But can they change?  No, industries don’t change.  Individuals must change, one at a time, until there is a critical mass of early adopters.  At some point in time, the people who enter sales management will come pre-wired for the new model, at which time the industry will have already changed.  If you change, have success, talk about it with your colleagues and they tell somebody and they tell somebody, well, you know how that works.

It’s not difficult to make these changes.  It’s fairly simple to do things the right way when you’re empowering and compensating managers to do it the right way.  You can’t say, “OK, from now on we’re going to do it the new way”, but not do away with the “minimum body count” rule.  Either you run for second base or you stay nice and safe on first.  You may not score from first, but at least you’re playing the game.  If you want to know what’s really hard, it’s recruiting the way your industry is doing it now.  You start your businesses over every day, repeating recruiting rituals that hardly ever work.  That’s hard.

There is no hope for you until you stop expecting different results from doing what you have always done.

© Copyright 2006 Objective Management Group, Inc.