Picture this: Mike is a tenured sales rep who has been exceeding his quota year after year. His sales manager Jennifer is happy with Mike’s achievements and relies on him to take on higher quotas. Jennifer is confident spending time with Mike is a good idea.
Another sales rep, Laura, has been at the company for less than a year with satisfactory sales performance. Jennifer hopes that Laura will make her quota, but if she doesn’t, it won’t have a huge impact on whether Jennifer makes her quota. And Laura doesn’t have as big a pipeline as Mike so Jennifer spends far less time with Laura.
It might seem like a smart financial decision to focus coaching energy on high performers like Mike — and hey, closing big deals is fun! — but losing Laura means the company is paying a huge price: They likely already invested more than $200,000 and an average of 4.3 months into hiring and onboarding her. This also means much more work for Jennifer in the long run, because Mike will continue to perform, but Jennifer needs more Mikes. And the worst case is Mike leaves and Jennifer doesn’t have a strong enough bench to backfill quota.
Are your frontline managers spending their important one-on-one time with new hires to make them productive, contributing sellers? Or are they leaving the inexperienced behind to focus their efforts on tenured, high-performing reps?
High performers are disproportionately made up of tenured sellers
When we conducted a recent benchmark study with 40+ sales leaders, we focused on the role of the sales manager in increasing new hire time to productivity.
It may seem obvious, but our analysis discovered that tenured reps naturally outperform first-year sellers. Indeed, study participants said they saw a 52% improvement in quota attainment vs. plan after their first year.
In this second part of our blog series looking at the benchmark study results, we’ll examine why tenure drives performance and make the case that, if new hire success rates don’t improve, growth rates will stall.
When you look at the difference between low and high performers, the experience gap is vast — as you might expect, low performers are largely made up of first-year sellers while high performers are more tenured. And our study showed that, for 70% of interviewed sales leaders, the less-experienced first-year crowd made up a good chunk of the sales team cohort: a whopping 30%.
When complacency sets in
Onboarding programs are expected to deliver new hire success, but in reality, the attention and coaching time with sales managers makes all the difference. This makes a lot of sense: New markets and new sales motions often take some getting used to.
However, if managers are spending the majority of their time with high-performing tenured sellers while their sales team is accomplishing overall established goals, it means new hires are left to fend for themselves, until they can get enough mature pipeline to get noticed.
The cost of losing reps
When speaking with sales leaders, we found that 36% of first-year sellers achieve goal vs. 54% of tenured sellers. That adds up to a 52% improvement in % of sellers achieving goal after their first year.
And if hiring rates outpace new hire success rates, growth rates will eventually stall. You can’t keep overassigning quota to tenured reps. Eventually they become entitled and will attrit too.
An Xactly study showed that the average business loses 29% of its sales reps annually vs. an “ideal” attrition rate of 15% or less — and our research concludes that every tenured seller who attrits requires two to three new hires to backfill the productivity loss, assuming they perform at an equal rate. However, tenured sellers are nearly two times more likely to get to goal, so the true backfill rate needed is closer to four to six.
As one sales leader told us: “If you don’t spend enough time investing in the new sellers, you will inevitably spend a lot more time fixing it later.”
The Right Sales Tech
With help from CT Connect, sales leaders gain the benefit of instantly seeing who and where frontline managers are spending their time. Sales managers can make better use of their time by:
- Shifting to focus on engaging new hires and middle performers
- Allocating more time to top-of-funnel interactions
- Identifying and improving the selling behaviors that matter most
CT Connect helps guide who sales managers spend time with, where in the sales process and most importantly how:
Identifying Coaching Opportunities: Keep crucial information top-of-mind with snapshots that show a team’s tenure and sales performance — enabling managers to identify critical coaching opportunities for specific team members.
Improving Feedback: Give sellers the information they need with a framework that ensures managers are evaluating the behaviors that correlate to increased sales performance.
Tracking ROI: Use executive leadership analytics and reporting features to correlate coaching to better win rates and goal attainment.