We walked by a brackish pond and one morning it appeared that two of the fish had babies.  Not just a few babies.  Not a lot of babies.  There were two schools of baby fish which, at first glance, appeared to be underwater swarms of bees!  There had to be hundreds of thousands of them! My first thought was to calculate the percentage of baby fish that would survive their first year.  I did some research and learned that as many as 99% of those babies will die.  I assume that most of them will be eaten by predators.

If you’re a regular reader, you won’t be surprised to know that in my mind, there was an immediate analogy to sales turnover and more specifically, the industries responsible for the highest turnover rates.  Think about life insurance, auto sales, residential real estate, solar panels, cable TV and broadband.  There are dozens more but those are the most obvious.  Turnover rates in those B2C businesses run between 80 and 90 percent and as bad as that seems, it doesn’t concern the executives of those businesses.  As with fish born into the wild, survival of the fittest is the rule.  Turnover is baked in.  It’s expected.  Nobody cares.  They don’t want to fix it.  Just find more candidates for them!

The model is simple.  Hire everyone who shows an interest, allow them to sell their friends and family, and when they fail to generate business beyond their immediate circle, hire someone else to sell to their family and friends.  After they’re gone, a more senior professional inherits the new accounts and grows them accordingly.  What’s not to like?

When I was in college, I sold Cutco Knives and the model was the same.  I was a 1%er who survived beyond friends and family but the transition wasn’t easy.  Even though I was a survivor, the company didn’t care about me.  I quickly became a sales manager where the primary role was to recruit.  I thought that if I could do a better job getting college kids to stick around and become productive, I wouldn’t have to spend so much time recruiting. I was right. My turnover rate was a fraction of what was expected and my salespeople were successful enough that I had one of the top performing offices in the country.  What I didn’t realize is that the company made money on every new recruit and when the number of incoming new salespeople slowed, I was shown different data that positioned me as one of the worst offices in the country.  Like I said, turnover is baked in!

Everything we have discussed to this point is from B2C but they don’t have exclusivity on this problem. While there are B2B variations of this as well (copiers/printers), most of the problem occurs in B2C sales.

The good news is that anyone from any background can try sales and see how they feel about it as there are not many barriers to entry. The bad news is they will experience the worst possible examples of professional selling.  The mixed news is that they will experience rejection and failure and learn how they respond to that. We definitely lose people because of this horrible first experience who, under different circumstances, might have been successful in sales. Youth baseball loses a lot of good athletes to youth soccer but it’s not because they failed at baseball, it’s because they perceive soccer to be a more exciting sport.

Because turnover is baked in, there isn’t a perceived problem to solve.  God knows that over the past forty years I’ve tried to help companies with their turnover problem but when it’s baked in, it isn’t perceived as a problem and when I have worked with someone who did want to fix the problem they were denied funding.

On the other hand, if your company has an unintended turnover problem….

First, it’s helpful to know what constitutes an actual turnover problem. If your turnover is less than 10%, you have a turnover problem – not enough turnover!  If your turnover is between 10-20% you’re good.  If it’s greater than 20% it’s worth exploring what is contributing to your high turnover rate and how to fix it.  Sometimes it’s because you are hiring the wrong salespeople.  Sometimes it’s lack of effective onboarding, lack of effective sales training, lack of effective coaching, lack of accountability, or lack of leadership.

Allow us to help you identify the root cause and fix it!