RAB Research Archive

Is Sales Force Turnover Always a Bad Thing?



“Turnover.” Just the word can cause the hair on the back of any manager's neck to stand up and cause a pit in the stomach, or their stress level to rise. Early in my career, I learned a valuable lesson about sales department turnover: “Anytime you have an organization that doesn’t have management-generated turnover, you have an organization that is in trouble.” Meaning when you have a high-performance culture, you are likely to have people on the team that simply won’t make it. They aren’t bad people; they just don’t have the skills to compete at the level you need. Removing them from the team is not only a good thing, but it is also required.

In the data-driven world in which we live, it’s easier to dig into the numbers and determine if you really have a problem. Andris A. Zoltners is a professor emeritus of marketing at Northwestern University’s Kellogg School of Management. Writing for Harvard Business Review, Zoltners suggests that among departing reps, 32% leave because of their relationship with their manager, 27% leave because of inadequate pay, and 21% leave because of the lack of promotion opportunities. Zoltners says that 60% of the people who left for the first reason and 73% of those that left for the second reason are not cause for alarm. In fact, he says that some companies weed out low performers in this way as a strategy.

But turnover is expensive, and how you analyze and respond to it matters. Zoltners offers three things to look at when it comes to turnover:

1. Low performers with low potential: These are bad hires, plain and simple. If many sales force departures come from this group, you’ll want to find ways to upgrade the applicant pool and enhance your candidate selection and attraction process.

2. Low performers with significant future potential: The solution for reducing turnover among this segment lies in helping salespeople become successful through development and coaching and giving salespeople warm leads so that they can taste sales success, which is the ultimate motivator.

3. Turnover among high performers: Autonomy, appreciation, recognition, pay, long-term incentives, inclusion on a company task force and sometimes, even employment contracts with a noncompete clause can play a role in controlling turnover for this group.

Top performers want to be part of a high-performance culture. Having a high-performance culture suggests that not everyone is going to make it – and that’s okay.

Admittedly, deciding when to make a change is one of the most difficult decisions we make as managers. The topic just came up last week on our Leadership MasterClass coaching call. One of my mentors taught me early on, “When belief turns to hope, it’s time to cut the rope.” If you believe they want and just need some skill enhancement, then you fight through the deficiencies with them. If you “hope” they want to do it and hope they will learn the things they need, it’s time to move on.

Jeff Schmidt is the SVP of Professional Development. You can reach him at Jeff.Schmidt@RAB.com. You can also connect with him on Twitter and LinkedIn.

Source: Jeff Schmidt, RAB





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