Reducing Sales Rep Turnover
Fred BergerPresidentDocument Technology Solutions Consultingwww.documenttechnologysolutions.com
“Partnering with Dealers to Reach the Next Level”
Agenda
• DTS Consulting Introduction• Key Industry Trends• Cost of Sales Rep Turnover• Reasons for Sales Rep Leaving• Common Turnover Reduction Actions• Circle of Success• Summary • Next Steps• Questions
DTS Consulting
• An Independent Industry Consulting Firm Dedicated to “Partnering with Dealers to Reach the Next Level” • 35 years experience helping companies grow and improve overall
performance through change and innovation• Access to Alliance Partners representing some of the best expertise
in the industry• President of the 4th largest Sharp Dealership in the US• COO of a $20 million Dealership• Vice President Danka Acquisitions• Vice President of Ricoh Business Systems - Ricoh’s Direct Channel
Key Industry Trends
Copier Industry• Speeds and
Feeds
Digital Revolution• Paradigm Shift
Explosion in Color
Technology-Driven Solutions• Managed Print
Services• Electronic Document
Management• Scanning (capture)• Processing (manage)• Integration (making
software work)• Routing
(storage/retrieval• Mobile Devices/Cloud
Printing
Cost of Sales Rep Turnover
The average turnover for copier sales reps in the US is 60 %30% of all sales reps have been with their current company less than 1 yearThe average tenure for a new hire is between 3 and 6 months
The average cost of a sales reps turnover after 5 months is:
• Salary @ $24,000 year $10,000• Fringe Benefits @ 25% $ 2,500• Car Allowance @ $400 mo. $ 2,000• Recruiting $ 3,000• Training $ 2,000• Total $19,500 This excludes any lost Gross Profit that a sales rep would produce from sales and aftermarket
Reasons given for Sales Rep leaving
Did not understand
job
Too much cold calling
Did not make enough money
The company
My manager did not
support mePoor hire No training Not enough
customers
Lack of support
Sales Rep was a loser
Did not like sales
Time spent to hire a Sales Rep
Recruiting time 1 hourPreparation for interview ¾ hourInterview by 3 managers 1 ½ hoursPost interview review ¾ hourTotal 4 hours Number of interviews per hire 6 interviewsNumber of hours spent interviewing per hire 24 hours
If you have 20 reps at 60% turnover that consumes 288 hours or 36 days per year
Typical things companies do to reduce turnover
More Training of sales reps :• Products• Sales Skills
More training of sales managers
Use telemarketers for appointments
Testing of applicants
Have applicant’s rides along with a rep before hiring
Assign a mentor to the new hire
Change compensation plan Accept turnover
Do not hire any more inexperienced
reps
Do not add any more sales reps etc
Results of all these actions
Turnover remains high
Revenue is reduced
Profit is reduced
Activity Management/
Account Reviews
Hiring
Compensation
1st Day/10 Day Orientation
Sales Rep Opportunity
Training
Success Factors/
ProgramsSM
GSMVPS
In the center of all of this are the people responsible for effectively executing each element
Circle of Success
Sales Rep Opportunity
• Why are you hiring a sales rep?– Replacement?– Addition?
• Have you evaluated the territory/opportunity?– Territory make-up
• What type of Sales Rep are you hiring? Why?– Geo– Vertical– Major Account– MPS– Software/Solutions– Specialist– Team concept
• Can the territory support the Sales Rep?– MIF?– Customers?
Hiring
• Based on the type of Sales Rep– Have you developed a general profile?– Have you developed a specific profile?
• Skill set of candidate must align with the opportunity– Geo rep– Vertical market rep– Major account rep– Solutions rep– Specialist
• Interview process– Behaviors– Skill sets– Experience level– Testing– Pre-set questions– Interviewers, manager, general manager, vice president, owner, etc
• Develop/ Maintain candidate pool• Do Not Settle
Compensation
• One size does not fit all• Compensation plan must align with company strategy,
sales rep opportunity, sales rep profile, etc• Base compensation versus variable compensation• Align with company strategy, sales rep opportunity,
sales rep profile • Ranges, competitive, drivers, internal alignment,
experience• Sales Manager compensation should be geared toward
sales rep success
1st Day/10 Day Orientation1st Day – The most important day!!!!!!
• Welcoming• Tools ready
– Phone– Laptop– Computer access– Desk, chair, clean– Business cards– Company documentation– Organization chart– Hiring paperwork
• Introduction– Company management– Key personnel
• Meeting– Game plan
1st Day/10 Day Orientation
10 Day Orientation• Create a 10 day orientation• Should be day by day, hour by hour• Include :
– meetings with key individuals– Training on tool utilization– Training on company sales/marketing materials– Training on products/programs– Training with key sales reps– Training with manufactures sales reps if possible– Review meetings after each session with manager/employee– Home work assignments– Etc
• Keep them involved at all times• Have 1st management review with employee after this 10 day program
Training
Management’s commitment to training is critical to success and retention of sales reps
• Continuous training throughout their career is a MUST• Ensure the training process is managed• Create a multi level training plan, include time frames and reviews• Should include:
– Manufacturer's training– Web based training– Hands on training– Self paced training– Etc.
• Manager reviews after each course, evaluation• Manager MUST reinforce training programs• Manager MUST make sure training program is adhered to.• Showroom must include hardware and software to support training program• Sales manager should have weekly team training meetings
Activity Management
• Sales Managers need to drive sufficient activity levels to achieve success
• Activity levels need to be sales rep type driven• Sales Managers need to review and monitor
activity and levels• Sales Force Automation tool should be used to
monitor activity and pipeline
Account Reviews
• Account reviews should be on a set schedule• Sales Manager should conduct thorough account
reviews• Account reviews should be solution driven not just
sales close driven• Team account reviews should be the norm• Next level manager should sit in on many account
reviews• Remote monitoring and SFA tools should be used for
account reviews
Success Factors/Programs
• All Sales Reps should be aware of internal/external marketing/sales programs
• Sales managers should make sure these programs are used appropriately
• Internal programs should be geared toward strategic plans
• Internal programs should be geared to make new hired sales reps “Ring the Bell”
• Sales manager should be tied to the success of these programs
Summary
Technology is Driving Industry
Change at a Rapid Pace
Sales Rep Turnover is extremely costly
There is no one thing that causes
turnover
Back to Basics is required
“Circle of Success” is a building block
Time spent up front well worth
while
Next StepKey Area Assessment Grades
Sales Rep Opportunity 1-10Hiring 1-10Compensation 1-101st Day / 10 Day Orientation 1-10Training 1-10Activity Management/ Account Reviews 1-10Success Factors / Programs 1-10
Questions?
For More Information Contact:Fred BergerPresident
Document Technology Solutions Consulting, Inc.727-403-3936 ©
[email protected] Technology Solutions Consulting
www.documenttechnologysolutions.com
“Partnering with Dealers to Reach the Next Level”