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SalesLongevity;thesciencebehindpredictingandpreventingsalesstaffturnover.
Weliveinanerawhereemployeesnolongerremainwithacompanyformostoftheirlives.itisnotunusualforayoungeremployeetoworkforseveralcompaniesbeforetheyturn30.today,turnoverisinevitableandwhenyouconsidertheuniquedynamicoftheoddsofasalespersonsucceeding,theriskofexpensiveturnoverincreasesdramatically.Salesstaffturnoverandmorespecificthequestionhowyoucanpreventtoohighstaffturnoverisincreasinglygettingmoreimportant.Oneofthekeydriversistheeconomicupturnwherebyloyaltyofpersonnelisreducingandmanyexperiencedandsuccessfulsalespeopleareeitherapproachedbyheadhuntersorarevoluntarilygraspingtheopportunitytolookelsewhere.Sowhatisityoucandotopreventyourbestperformingsalestoleaveandyourworsttostay?Thisiswheretheconceptoflongevityprovidesyouthetoolsandmetricstopredictandprevent(too)highretentionrates.AccordingOMG’sDaveKurlan1hisresearchshowsthatinanidealsalesorganizationtheretentionrateshouldbebetween5-10%perannum.Atfirstglancethe10%ratiomightseemhigh,butit’snot:onthecontrary.Asinalltopsports,creatingwinningteamsisahugechallenge,howeverbythewordsofKoenGonnissen2ifyouwanttoconsecutivelymaintaintheNr1positionyouneedtoconstantlyworktoimproveyourdreamteam;yearafteryear.SameappliestoSaleschampions,inordertobecomeortokeepyournr1positionyouhavetomakesureyoucreateandmaintainacompetitivesalesdream-team.Therefore,thisrelativelyhighretentionratemeansthatsalesorganizationsandmanagementshouldconstantlyspendasignificantofamountoftheirtimerecruitingforthebestsalestalentinthemarket(talentscouting).Inaddition,youshouldalsoconsiderthatthemajorityofSalesManagershaveareactiveapproachtowardsrecruitment.Onlywhenateam-memberhasannouncedhisresignation,HRiscontacted
1DaveKurlan,2016,OMG:SalesLongevitywhitepaper2KoenGonnissen2014,CorporateAlthlete:Ingredientsofadreamteam
andthesearchforreplacementcommences.Onaveragethisheadcountdrivenconstraintisthecausethatthemajorityofsalesorganisationsconstantlyhavevacancies.Therefore,headcountrestrictionslimitsalesmanagement’sagilityregardingamoreproactiverecruitmentpolicy.Researchontherecruitmentcompetencesofsalesmanagement3tellusthatBestinClasssalesmanagersshouldatleastspend5%oftheirtimeonrecruitmenttokeeptrackwithretentionratesofapprox.10%.Isyourretentionratehigher,themeansthatexponentiallymoretimeneedstobededicatedtorecruitmentofnewsaleswinners?HoweverhereatXsellwesometimesalsocomeacrosssalesorganizationswithsubstantiallylowerretentionrates.Thismightsoundlikeanidealsituationwhenyourretentionisbelow5%,howeverthismetricusuallytellsusthatnon-performersareretainedintheorganizationyearafteryear.Thatisthereasonwhyourrecommendationregardingsalesstaffretentionisbetween5-10%.1. Letusfirsthavealookatourdataregardingsalesmanagementcompetenciesthatsignificantly
impactLongevity:
Aspresentedintheslideabove,ourdatatellusthatthereareseveralsalesmanagementrelatedreasonsthatimpactLongevity.Firstly,salesmanagerstypicallystrugglesincemanyofthemhaveabeliefthatthey“needtobeliked”andstruggletoholdtheirsalespeopleaccountablewhentheresultslackbehindortoremovenon-performingteammembers4.Secondlyistheacceptanceofmediocrityandtoleranceofpoorperformance.OurresearchshowsthatespeciallywhenCommitmentishighincombinationwithalackofDesire5,SalesManagementstruggletoraisethebarforthemselvesandtheirteams.Anexampleofthatispicturedbelow.
3OMGresearch2012-2016,Salesmanagersrecruitmentstudy35.000Salesmanagers4SeeSalesManagementDNA“Needforapproval”5SalesMindset;CrucialelementsDesire&Commitment–ManagersDashboards
Longevity; prevention-of-employee-turnoverData-analysis-and-findings-of-sales-management-competencies*
• 20%$of$sales$managers$have$need$for$approval$• 30%$of$sales$managers$accept$mediocrity,$and$tolerate$poor$performance.$• 61%$of$sales$managers$aren’t$inclined$to$upgrade$their$sales$force.$• 60%$of$sales$managers$managers$do$not$have$the$right$attributes$of$accountability.$
*OMG$research$on$33.000$sales$manager$2005D2015
Evenmoreconcerningthoughareourfindingsthat61%ofsalesmanagersaren’tincludedtoupgradetheirsalesforceand60%ofthemlacktherightattributestoholdtheirpeopleaccountable.Thatiswhyoneofthekeyadvantagesisthatwiththehelpofthemetricsandanalyticsprovidedbytheassessments,thesekeyattributesfromthesalesmanagementDNA(“Needforapproval”&accountability)arealsomeasuredandreportedinthesalesmanager’sassessment.I.e.somethingwecanquiteeasilyretrievefromthesalesmanagersreportashighlightedbelow:
Sonowweunderstandtheissueswithsalesmanagementfora(lackof)involuntaryturnoverstaffturnover,wecanaddressthisbyforexamplecoachingonthemanageriallimitingbelief‘Needforapprovalorneedtobeliked’orbyholdingsalesmanagementmoreaccountablefortheirsalespeoplesresults.InthatcaseitneverhurtstochecktheexactreasonsandfindingsontheAccountabilityCompetencyofthesalesmanager.TheexamplebelowshowsaclearlackofManagementonBehaviorthatmightcauseissueswithaccountability.
OnceweunderstandthesalesmanagementissuesthatimpactLongevity,youshouldnowsetyourannualretentiongoalat5-10%.Inordertoensurethatgoalisreachedeveryyear,hereiswhatyoucandotomanageyourlongevitymoreadequately:
1) Spendsignificantlymoretimeonrecruitmentandenhanceyourrecruitmentcompetencies2) Measureandimprovethenewsalesperson’sROI
Althoughthismightsoundliketoprettyhardtoaccomplish,letusshowyouhowyoucaneasilyretrievethesemetricsfromourassessmenttoolsandimmediatelystartactinguponthem.1) Duringthesalesmanagementassessment,weanalyseandreportonRecruitingasakeySales
Managementcompetency.(seethedashboardabove:Recruiting)Behindthismetricthefollowingrecruitmentspecificcompetencesandsalesmanagersscoreagainstthatislisted:
Withthatknowledgewenowknowwhatittakestobeefuprecruitmentaskeyattributetolowerretentionratesandtoimprovetheperformanceofyoursalesorganization.2) Inaddition,wehavetakenacloserlookatthedeterminingfactorsofthereturnonnewsales
people.I.e.whatarethekeyrecruitmentfactorsthatcontributeanddetermineahighROIonnewsalespeople(NSROI)
Longevity*predictive*analysis*5*determining*factors*for*the*ROI*on*new*sales*people*
1. Figure)it)out)factor))2. Sales)Quotient)(overall)score)on)all)sales)
competencies)3. Sales)Management)Supervision)&)
Coaching)(time)& attention)4. Candidate)experience5. Motivation)&)Compensation)(intrinsic)vs)
extrinsic)&)variable)vs)fixed))*OMG)research)on)620.000)sales)people)2005I2015
OMG’s)assessments)measure)and)report)these)5)determining)factors
Ourresearchshowsusthatthereare5determiningfactorsthatcontributetoNSROI.4ofwhicharemeasuredandreportedbyOMG’srecruitmentassessment:
1) FIOF,figureitoutfactor,i.e.howquicklythecandidateisabletofamiliarizehimselfwithnewlearnings.
2) SalesQuotient:Theoverallscoreonall21salescompetencieswherebytheidealSQisbetween110-130
3) Candidateexperience(inyears)4) Motivation&Compensation:howwellthecandidateismotivatedandcompensated
Theoneotherdeterminingfactor(5)isprovidedbythesalesmanagersassessmentbeingsupervision&coachingtimeortheamountoftimethehiringmanagerspendsoncoachingandsupervision.Thisshouldbearound50%ofhistime6…..butitrarelyisunfortunately.Predictivevalidity:
NowweunderstandhowtoretrievethekeyvariablesthatimpacttheNSROI,whatisitwecansayregardingpredictionandpreventionofLongevity?ForthatwehaveusedOMG’sextensivedatatoanalyzeourrecommendationsfromtherecruitmentassessmentsvs.actualperformanceofnewlyhiredsales.Asyoucanseeherebelow,ourlatestfindingsfromourresearchin2015-2016onthatarequiteastonishing:
6OMGresearch2011-2015over17.000salesmanagersshowsthatbestperformingsalesmanagersdedicateonaverage50%oftheirtimeoncoachingtheirsalespeople.
Conclusion:Withthedataprovidedbytherecruitmentassessmentandsalesmanagementassessmentwecanuncoverthereasonsforhighortoolowretentionratesforstaffturnover.Andthusmoreimportantlyweareabletopredict,preventandprovideyoutheinsightsandmetricsthatallowyoutobettermanagetheLongevityoffyoursalesorganization.Successwiththedevelopmentandimprovementofyoursalesorganization.Kindregards,XsellGroupBVdrs.ing.DouglasHuissen,AmsterdamDec16,2016.