sales longevity; the science behind predicting and preventing...

SalesLongevity;thesciencebehindpredictingandpreventingsalesstaffturnover.

Weliveinanerawhereemployeesnolongerremainwithacompanyformostoftheirlives.itisnotunusualforayoungeremployeetoworkforseveralcompaniesbeforetheyturn30.today,turnoverisinevitableandwhenyouconsidertheuniquedynamicoftheoddsofasalespersonsucceeding,theriskofexpensiveturnoverincreasesdramatically.Salesstaffturnoverandmorespecificthequestionhowyoucanpreventtoohighstaffturnoverisincreasinglygettingmoreimportant.Oneofthekeydriversistheeconomicupturnwherebyloyaltyofpersonnelisreducingandmanyexperiencedandsuccessfulsalespeopleareeitherapproachedbyheadhuntersorarevoluntarilygraspingtheopportunitytolookelsewhere.Sowhatisityoucandotopreventyourbestperformingsalestoleaveandyourworsttostay?Thisiswheretheconceptoflongevityprovidesyouthetoolsandmetricstopredictandprevent(too)highretentionrates.AccordingOMG’sDaveKurlan1hisresearchshowsthatinanidealsalesorganizationtheretentionrateshouldbebetween5-10%perannum.Atfirstglancethe10%ratiomightseemhigh,butit’snot:onthecontrary.Asinalltopsports,creatingwinningteamsisahugechallenge,howeverbythewordsofKoenGonnissen2ifyouwanttoconsecutivelymaintaintheNr1positionyouneedtoconstantlyworktoimproveyourdreamteam;yearafteryear.SameappliestoSaleschampions,inordertobecomeortokeepyournr1positionyouhavetomakesureyoucreateandmaintainacompetitivesalesdream-team.Therefore,thisrelativelyhighretentionratemeansthatsalesorganizationsandmanagementshouldconstantlyspendasignificantofamountoftheirtimerecruitingforthebestsalestalentinthemarket(talentscouting).Inaddition,youshouldalsoconsiderthatthemajorityofSalesManagershaveareactiveapproachtowardsrecruitment.Onlywhenateam-memberhasannouncedhisresignation,HRiscontacted

1DaveKurlan,2016,OMG:SalesLongevitywhitepaper2KoenGonnissen2014,CorporateAlthlete:Ingredientsofadreamteam

andthesearchforreplacementcommences.Onaveragethisheadcountdrivenconstraintisthecausethatthemajorityofsalesorganisationsconstantlyhavevacancies.Therefore,headcountrestrictionslimitsalesmanagement’sagilityregardingamoreproactiverecruitmentpolicy.Researchontherecruitmentcompetencesofsalesmanagement3tellusthatBestinClasssalesmanagersshouldatleastspend5%oftheirtimeonrecruitmenttokeeptrackwithretentionratesofapprox.10%.Isyourretentionratehigher,themeansthatexponentiallymoretimeneedstobededicatedtorecruitmentofnewsaleswinners?HoweverhereatXsellwesometimesalsocomeacrosssalesorganizationswithsubstantiallylowerretentionrates.Thismightsoundlikeanidealsituationwhenyourretentionisbelow5%,howeverthismetricusuallytellsusthatnon-performersareretainedintheorganizationyearafteryear.Thatisthereasonwhyourrecommendationregardingsalesstaffretentionisbetween5-10%.1. Letusfirsthavealookatourdataregardingsalesmanagementcompetenciesthatsignificantly

impactLongevity:

Aspresentedintheslideabove,ourdatatellusthatthereareseveralsalesmanagementrelatedreasonsthatimpactLongevity.Firstly,salesmanagerstypicallystrugglesincemanyofthemhaveabeliefthatthey“needtobeliked”andstruggletoholdtheirsalespeopleaccountablewhentheresultslackbehindortoremovenon-performingteammembers4.Secondlyistheacceptanceofmediocrityandtoleranceofpoorperformance.OurresearchshowsthatespeciallywhenCommitmentishighincombinationwithalackofDesire5,SalesManagementstruggletoraisethebarforthemselvesandtheirteams.Anexampleofthatispicturedbelow.

3OMGresearch2012-2016,Salesmanagersrecruitmentstudy35.000Salesmanagers4SeeSalesManagementDNA“Needforapproval”5SalesMindset;CrucialelementsDesire&Commitment–ManagersDashboards

Longevity; prevention-of-employee-turnoverData-analysis-and-findings-of-sales-management-competencies*

• 20%$of$sales$managers$have$need$for$approval$• 30%$of$sales$managers$accept$mediocrity,$and$tolerate$poor$performance.$• 61%$of$sales$managers$aren’t$inclined$to$upgrade$their$sales$force.$• 60%$of$sales$managers$managers$do$not$have$the$right$attributes$of$accountability.$

*OMG$research$on$33.000$sales$manager$2005D2015

Evenmoreconcerningthoughareourfindingsthat61%ofsalesmanagersaren’tincludedtoupgradetheirsalesforceand60%ofthemlacktherightattributestoholdtheirpeopleaccountable.Thatiswhyoneofthekeyadvantagesisthatwiththehelpofthemetricsandanalyticsprovidedbytheassessments,thesekeyattributesfromthesalesmanagementDNA(“Needforapproval”&accountability)arealsomeasuredandreportedinthesalesmanager’sassessment.I.e.somethingwecanquiteeasilyretrievefromthesalesmanagersreportashighlightedbelow:

Sonowweunderstandtheissueswithsalesmanagementfora(lackof)involuntaryturnoverstaffturnover,wecanaddressthisbyforexamplecoachingonthemanageriallimitingbelief‘Needforapprovalorneedtobeliked’orbyholdingsalesmanagementmoreaccountablefortheirsalespeoplesresults.InthatcaseitneverhurtstochecktheexactreasonsandfindingsontheAccountabilityCompetencyofthesalesmanager.TheexamplebelowshowsaclearlackofManagementonBehaviorthatmightcauseissueswithaccountability.

OnceweunderstandthesalesmanagementissuesthatimpactLongevity,youshouldnowsetyourannualretentiongoalat5-10%.Inordertoensurethatgoalisreachedeveryyear,hereiswhatyoucandotomanageyourlongevitymoreadequately:

1) Spendsignificantlymoretimeonrecruitmentandenhanceyourrecruitmentcompetencies2) Measureandimprovethenewsalesperson’sROI

Althoughthismightsoundliketoprettyhardtoaccomplish,letusshowyouhowyoucaneasilyretrievethesemetricsfromourassessmenttoolsandimmediatelystartactinguponthem.1) Duringthesalesmanagementassessment,weanalyseandreportonRecruitingasakeySales

Managementcompetency.(seethedashboardabove:Recruiting)Behindthismetricthefollowingrecruitmentspecificcompetencesandsalesmanagersscoreagainstthatislisted:

Withthatknowledgewenowknowwhatittakestobeefuprecruitmentaskeyattributetolowerretentionratesandtoimprovetheperformanceofyoursalesorganization.2) Inaddition,wehavetakenacloserlookatthedeterminingfactorsofthereturnonnewsales

people.I.e.whatarethekeyrecruitmentfactorsthatcontributeanddetermineahighROIonnewsalespeople(NSROI)

Longevity*predictive*analysis*5*determining*factors*for*the*ROI*on*new*sales*people*

1. Figure)it)out)factor))2. Sales)Quotient)(overall)score)on)all)sales)

competencies)3. Sales)Management)Supervision)&)

Coaching)(time)& attention)4. Candidate)experience5. Motivation)&)Compensation)(intrinsic)vs)

extrinsic)&)variable)vs)fixed))*OMG)research)on)620.000)sales)people)2005I2015

OMG’s)assessments)measure)and)report)these)5)determining)factors

Ourresearchshowsusthatthereare5determiningfactorsthatcontributetoNSROI.4ofwhicharemeasuredandreportedbyOMG’srecruitmentassessment:

1) FIOF,figureitoutfactor,i.e.howquicklythecandidateisabletofamiliarizehimselfwithnewlearnings.

2) SalesQuotient:Theoverallscoreonall21salescompetencieswherebytheidealSQisbetween110-130

3) Candidateexperience(inyears)4) Motivation&Compensation:howwellthecandidateismotivatedandcompensated

Theoneotherdeterminingfactor(5)isprovidedbythesalesmanagersassessmentbeingsupervision&coachingtimeortheamountoftimethehiringmanagerspendsoncoachingandsupervision.Thisshouldbearound50%ofhistime6…..butitrarelyisunfortunately.Predictivevalidity:

NowweunderstandhowtoretrievethekeyvariablesthatimpacttheNSROI,whatisitwecansayregardingpredictionandpreventionofLongevity?ForthatwehaveusedOMG’sextensivedatatoanalyzeourrecommendationsfromtherecruitmentassessmentsvs.actualperformanceofnewlyhiredsales.Asyoucanseeherebelow,ourlatestfindingsfromourresearchin2015-2016onthatarequiteastonishing:

6OMGresearch2011-2015over17.000salesmanagersshowsthatbestperformingsalesmanagersdedicateonaverage50%oftheirtimeoncoachingtheirsalespeople.

Conclusion:Withthedataprovidedbytherecruitmentassessmentandsalesmanagementassessmentwecanuncoverthereasonsforhighortoolowretentionratesforstaffturnover.Andthusmoreimportantlyweareabletopredict,preventandprovideyoutheinsightsandmetricsthatallowyoutobettermanagetheLongevityoffyoursalesorganization.Successwiththedevelopmentandimprovementofyoursalesorganization.Kindregards,XsellGroupBVdrs.ing.DouglasHuissen,AmsterdamDec16,2016.