Fact Based Reasons Why New Salespeople Fail – Data Points

Did you ever have a new salesperson fail?  Did you ever have one who was highly recommended fail?

Depending on how effective your recruiting, selection and on boarding processes are, you may experience new salespeople that don’t work out.  Let’s explore some of the factors that impact short-term success.

• Ramp-Up Time – an important factor in determining whether a new salesperson is succeeding or failing is your baseline ramp-up time.  When you don’t know what your ramp-up time should be, you will be guilty of either not giving a salesperson enough time to succeed, or being overly patient, allowing too much time to pass before calling the newbie a failure.  My formula for calculating ramp-up time is to add your sale cycle in months to your
  learning curve in months and then add an additional 30 days.  So, if you
  have a six month sale cycle and a three month learning curve, your
  baseline ramp-up time will be 10 months.  Complicating the matter even more is the fact that some salespeople will not ramp up exactly as the formula suggests, based on three additional factors:
  • Years of sales experience – fewer years = longer ramp up.
  • Years in the industry – fewer years = longer ramp up.
  • Compatibility (found on Objective Management Group’s  Sales Candidate Assessment) – lower compatibility = longer ramp up.

So we can modify the formula like this: add 2 more months if sales experience is less than five years, add 2 more months if industry experience is less than 2 years, and add 3 more months if compatibility is less than 75%.  Depending on these 3 factors, ramp-up could take as much as an additional 7 months!

• The Assignment – The assignment is a huge part of this equation.  If your new salesperson is assigned existing accounts, you’ll probably be happy with his work unless he quickly loses some accounts.  On the other hand, if 80% or more of the assignment is hunting for new business, you may conclude that the salesperson is failing unless the pipeline gets filled rather quickly with new opportunities.
• The Assessment – Clues abound here.  As long as you are using Objective Management Group’s Sales Candidate Assessment (92% of recommended candidates that are hired wind up in the top half of their sales force within a year, while 75% of those who were not recommended but hired anyway fail within 6 months), the answers are at your finger tips.  Review these four sections:
  • Hunter Skill set – which attributes are missing?
  • Conditions for Hiring – what are the conditions listed and did you follow them?
  • Likely Problems – are the issues your struggling salesperson is running into listed among the likely problems?
  • Skills – how many are there and are they representative of the entire selling process or just the front end, middle or back-end?
• The Sales Manager – The sales manager is usually the biggest determining factor of sales success and the first place to look when it appears that salespeople aren’t working out.
  • Supervision – Are new salespeople being micro managed or at least closely managed?  They should be.  Are any of your new salespeople in a remote territory?   A sure fire formula for disaster is a remote salesperson that is not being closely managed.
  • Expectations – Have expectations been set?  Do your new salespeople know what is expected of them in the first 30/60/90 days, how they will be measured and how they will be held accountable?
• • Support – When two seemingly identical salespeople with identical assignments and territories have opposite results, it’s usually because neither of them got the attention, direction, guidance, coaching, support, motivation and accountability that was needed, but one of them was better when it came to figuring out what it would take to succeed (see The Salesperson).
  • Key Performance Indicators (KPI’s) – Sales Managers that manage results (history) are months behind when it comes to being able to impact a salesperson using coaching and accountability.  Sales Managers that manage activity (today) can see into the future and change it.
• The Salesperson – New salespeople can figure it out when the right mix of these next 14 factors, all found in OMG’s Assessment, are in place – The “Figure it Out” Factor:
  • 5+ years in sales
  • 5+ years in the industry
  • Strong Desire
  • Strong Commitment
  • No Excuse Making
  • Self Starter
  • Works well independently
  • Works without supervision
  • Will Prospect
  • Prospects Consistently
  • No Need for Approval
  • Recovers from Rejection
  • Greater than 75% Compatibility
  • Effective Time Management

• High Turnover Factors – Depending upon these three additional factors, turnover could approach 150%.
  • Compensation – Turnover is higher in straight commission environments.  Straight commission with a long sale cycle will be even worse.  Straight commission with a long sale cycle and a salesperson without the financial stability to stick it out will exceed 100%.
• • Industry – Turnover in insurance (personal lines), telecommunications (long distance phone service) and automotive (car dealers) is very high because many companies in these industries don’t have a selection criteria that extends beyond “breathing and willing” and don’t invest time and money on development.
• • Mindset – Companies that are resigned to high turnover and that are making a lot of money despite the turnover don’t do anything to change it.
• Psychological Factors – Every once in a while you’ll get a new salesperson who is emotionally unstable and you won’t know it until it’s too late.  There is no better reason to use a psychological assessment at the time of hiring that to uncover this!
• Liars – I’ve even seen salespeople who took one base plus commission sales job while holding down another.  The only thing better than getting paid for not performing one job is getting paid for not performing in two jobs!

(c)  Copyright 2008 Dave Kurlan