I saw this statistic from a few credible sources (LinkedIn, Hubspot, Forbes and HBR) and I got really curious about it. After doing my own investigating and research, Carter Hopkins, Founder/President of Pursuit Sales Solutions asked me to talk about it on his “Mavericks” podcast (link).

Here are some of the highlights from the conversation:

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Carter: Nearly 1 out of 3 salespeople turnover annually. This is compared to 13% of all other positions. What led you wanting to look into this?

Scott: I was curious why the turnover rate in sales was 3x higher.

First, I believe sales is such a beautiful profession. I’ve dedicated my career to sales and I’m proud to consider myself a sales professional. Throughout my career, especially early, I've undergone the challenges that every new salesperson must face, and if it weren't for a few incredible individuals, I’m sure I would’ve added to the statistic.

Second, I've been in the shoes of a sales leader & manager, and I comprehend the stress, urgency, and pressure involved in constructing a high-performing sales team and optimizing every available seat.

Lastly, I've worked as a consultant / trusted advisor for numerous small and medium-sized businesses. I've witnessed firsthand how challenging it can be to get a team, or even an individual, to effectively sell their services.

Based on these experiences, my hypothesis was that the vast majority of sales turnover was occurring within the first year of employment.

As a result, I reached out to my community of business leaders actively building & expanding their B2B sales teams and asked them a series of questions centered around their salespeople's first year.

Carter: Can you share the statistics that you came up with?

Scott: Yes. To add some context, the companies included in my survey had the following average characteristics:

• B2B Technical & Professional Services
• 10 years old
• 52 employees
• 7 salespeople
• 3 years of average tenure

I asked questions about demographics, expectations, performance, and compensation of their first-year salespeople, and I found (on average):

• hitting just 77% of their first year revenue goal
• only 74% were aligned culturally
• only 56% were meeting their overall performance goals & expectations
• only 52% would be “enthusiastically” rehired
• and they, on average, had 31% turnover

*Which was nearly identical to the industry-wide average.

Carter: Why is there so much turnover within the sales function?

Scott: There are a few things that have become quite clear & obvious to me.

• Many organizations haven’t defined “what good looks like” in their sales role. They don’t have a clear target. They haven’t identified key milestones. They don’t know the key competencies required for success.

• Many organizations don’t know how to find top sales talent and are relying on job postings. It’s safe to say that the vast majority of top “sales” talent is currently working and not actively job seeking. So how on earth are you going to find an A-Player if you are not actively pursuing them.

• Many organizations interview process is inadequate. Without clearly defining “what success looks like,” hiring decisions tend to rely more on gut feelings and likability factors rather than the confidence that a candidate can and will perform in the role.

• Many organizations sales strategy is too broad. I had a business owner ask me why a salesperson appeared terrified during an interview, rather than enthusiastic, after hearing the phrase “the world is your oyster”. Clearly the salesperson was concerned that he/she would be wasting precious time selling to prospects who would never become clients rather than a refined and focused strategy.

• Many organizations lack a repeatable sales process. I frequently hear phrases like “typically” and “it depends.” Without a proven process, maintaining control of the sale becomes challenging. When control shifts to the prospect, the likelihood of winning significantly decreases.

• Many organizations aren't investing in the onboarding, training, and development of their new hires. Instead, they often rush to get new salespeople “on the phones” as quickly as possible, rather than taking the time for proper teaching, enculturation, practice, and preparation.

Carter: What can you?

Scott: There are several things that can you can do to significantly reduce the annual turnover of salespeople and improve their overall performance.

Design a Success Profile.

Different than a generic job description, a Success Profile includes the job mission, performance goals & expectations, a 12-24 month ramp schedule, key competencies, and potential challenges for the role.

Its relevance goes beyond the recruitment phase, playing a pivotal role in performance management and personal development.

Establish a 1 Year Ramp schedule.

Typically, I’ve seen Year 1 Performance Goals established like this…they pick a revenue target and divide it by 52 weeks. Ready. Set. Go.

By 6 months, leadership is growing frustrated by the “lack of results” and ramping up the pressure, while the salesperson is quickly losing confidence in their ability to successfully sell this service offering.

My approach is to take historical data including: average number of wins, average revenue per win and the conversion ratios from stage to stage to model the salesperson’s first 52 weeks - taking into consideration the average timeline for reaching key milestones like the first meeting, first proposal, and first win.

By the end…the revenue goal ends up being much more realistic.

And instead of measuring their performance based on outcomes (which we don’t expect in their first 3-6 months)…we can measure them on inputs and ensure they are doing the job the right way and provide hands on coaching in the areas that will impact their performance most.

Refine your strategy

My mantra is “Aim Small, Miss Small”. I see too many organizations casting a wide net. Salespeople need to have a crystal clear understanding of their ideal client profile including the demographics, psychographics, trigger events and ideal engagement.

Using this profile as the center of our bullseye…I want them to know the smallest number of prospects in their territory who align perfectly and initiate the business development efforts with them. They can always loosen the filters.

Beyond that, they need to know the key stakeholder to initiate and include in their sales process.

Define your Process

My mantra is “Take and Maintain Control of the Sale”. I see to many organizates handing control to their prospects…and they will gladly take the wheel.  It requires organizations to have a proven process with a “Purpose & Goal” at each stage so that salespeople can end the call/meeting by saying “the next step of our process is…” and secure that day & time in calendar.

Create a safe environment to learn

Sales is undeniably a challenging and often intimidating profession. It's essential to provide salespeople with a safe environment where they can practice and experiment with new strategies and techniques without the fear of facing negative consequences or repercussions.

This nurturing space fosters their growth, enhances their skills, and bolsters their confidence, ultimately contributing to their success in the field.

Too often this place doesn’t exist inside small & medium sized business with limited bandwidth and resources.

Importance of understanding that there will be turnover and you have to plan for it.

Now…all of that said…turnover is inevitable. We are dealing with people and it will never be perfect. However, it's the organization's responsibility to put forth its best efforts to attract, select, onboard, train, engage, and develop its sales talent effectively.

While it may sound like a lot of work, the good news is that when salespeople truly excel within an organization, they are less included to seek new opportunities elsewhere because they don’t want to start from scratch all over again.

AND…these high-performing salespeople serve as exceptional role models for new hires. They offer tangible proof of what can be achieved within the organization and provide invaluable insights and guidance to help others follow in their successful footsteps.

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All-in-all, it was a great opportunity to be a guest on Carter’s podcast and I appreciate the platform to share a bit about my research, findings and expertise.

I’ve come to know & trust Carter over this last year and I’m thankful for our relationship. He is a great person and leader and is helping organizations grow and scale by finding elite sales & marketing talent.