From Potential to Exponential™


Why Do Salespeople Bounce From Job to Job?

February 21, 2012

The average tenure of a sales rep is usually one and a half to three years. Granted, employees are now staying with their employers for much shorter time spans these days – but this short tenure has always been characteristic of salespeople. Let’s look at what drives that and what you can do to manage the ups and downs of sales person churn. Unfortunately, sales reps usually don’t meet their quota in their first year. Generally speaking, not many new hires will meet their quota in their first year with a new organization. That’s not to say they aren’t good salespeople or can’t become good ones – nor does it mean you should lower your expectations. It only serves as a reminder that even the most talented salespeople take some time to readjust when going into uncharted markets and territories. After a few years, good sales reps will meet their quota, and the great ones will surpass it. The truly talented and dedicated salespeople will find a way to meet the financial goals they are responsible for. The downside is that this can lead good sales people to “self select” out of a job.  That is to say that at the peak of their selling, that’s all they’re doing: selling. They neglect to prospect, and at the end of the year they realize that they have no pipeline left for the next year. Rather than do the hard work required to re-fill the funnel, smart sales people will often see this as the time to jump to a new company where there is a fresh set of expectations. And the bad ones… Well, you know what to do. Some salespeople, even after a year and a half, just don’t meet their quota. Sure, they bring in some revenue, but it’s relatively unimpressive and certainly doesn’t meet your expectations.  You end up making the “easy” decision and let these sales reps go. After all, why would you continue to support the salary of someone who isn’t brining you enough in return? Sometimes, the market dynamics change. What happens when a great salesperson has a territory they dominate, yet inexplicably sales results drop dramatically for “no reason?” For example, say you have a sales rep who brings in their quota every year, or even goes above and beyond their quota.  Everything is going swimmingly, and they aren’t even showing any signs of wanderlust for another job. Then, another similar product enters the market and becomes a fierce competitor. (This happens frequently in technology.) Your star sales rep is now faced with tough decisions.  Do I stay and learn how to fight off the new competitor?  Do I join the competition?  Do I jump to something completely different? Finally, people become sales reps for a reason. Whether it’s money, independence, ego, or a glamorized idea of a sales career, everyone becomes a salesperson for a reason. Some new reps even start their careers as a temp job, telling themselves they’ll get back to their “real dream” after a few years. Regardless, these factors can make someone a bad sales rep, a good one, or a great one – and they all contribute to the short tenure that characterizes their profession.  The burnout rate is high. How can you guard against sales person churn?  There is no single answer, but here are a few categories of things to consider.  We’ll explore each of these in a separate blog later.

  • Review incentive plans frequently and modify as necessary.  More so than any other profession, sales people do what they are incented to do.  Do your sales incentive plans take into account the changing role of a sales person over time?
  • Actively manage your experience mix.  A good sales organization has a mix of top performers at various points in their career.  Some are new.  Some are experienced.  Building a mix allows you to smooth out the ups and downs of attrition.
  • Have a contingency plan.  In some cases, companies of all sizes have started to outsource part or all of their sales organizations.  By doing this, they are transferring the risk associated with building and managing a vibrant sales team to a third party.  If you enter this route beware.  This can be the right thing to do, but you need to make sure you have assurances in place to cover downside risk.