The Four Factors That Determine How Long You Retain Your Top Sales Staff

Posted on 06. Aug, 2007 in Newsletter

By: Betsy Harper

The other day when I had a call from a CEO whom I’ve known for a long time. (In this case, about fifteen years.) He was bemoaning the recent resignation of one of his best inside sales people. I know the woman. She’s a gem — a real performer and I could understand why he would be upset about her leaving. It would definitely impact his sales numbers. But then I asked him how long she had been at the job. “Well, she’s been here about five and a half years,” he replied. “Well, it’s time for her to move on. She’s doing the right thing,” I said. Needless to say, that wasn’t the response he wanted from me. I see this all the time — hiring managers being disappointed when someone leaves. But, if they could only put themselves in their employee’s shoes, they’d probably be more understanding when this happens and, more importantly, more prepared for this eventuality. Good managers plan for employee turnover. A shorter or longer stint of employment will be based on lots of factors, of course, but here’s a tool that will help you determine (as much as anyone can do this of course) what you can expect. I call it “The Harper Sales Employee Retention Formula.” (SERF, for you government types.) And here’s how it works. In my experience, the duration someone stays with you depends on these four factors:

1) The Short/Long Sales Cycle – The shorter the sales cycle, the shorter the period of employment. I see inside salespeople usually lasting anywhere from 2.5–3.5 years at their jobs. The good ones go on to bigger and better opportunities anytime after that.
As I told my CEO friend, the last two years of his employee’s time were “a gift.” And here’s why. His company has a highly transactional and relatively low-cost sale (think Yellow Book advertising). There’s nothing particularly challenging about it once you get the hang of it, and the sales cycle is relatively short. It’s a true hunting position. And while you can certainly make a good living while you’re doing it, the smart salesperson will feel the need to grow and move on. Conversely, products with a longer sales cycle – almost by their very nature – will keep salespeople in your organization longer. Salespeople will be working on bigger deals and will be more reticent to leave when there is so much “pending” in their pipeline. Longer sales cycles, with more steps in the process, seem to lock people in for a longer time.

2) The More/Less Consultative Sale – The more “transactional” the sale, the more deals can be done. In a highly transactional environment, once a salesperson is up to speed, it’s more a job of repetition than skill. At this point, and after honing their “basic” skills, many salespeople opt for the greener (read “bigger”) and more challenging pastures of a consultative sale. In addition, and because consultative sales typically both take longer and often have an “annuity” element to them, salespeople are less likely to turn over quickly.

3) The Better/Worse Compensation Package – This is pretty self-explanatory, but I cannot stress enough how important it is, especially in a tight labor market, to be sure you are compensating your people well and that your benefits package is robust. A solid compensation and a great benefits package will add time to your employees’ tenure and make it more painful for them to leave. Without these incentives, there’s a lot less hesitation before walking out the door.

4) The Better/Worse Extenuating Circumstances – That’s right. There could be other factors that affect how long your people stay. For example, if you have a fast growing company that is constantly innovating, providing your sales force with new products and new markets, you can realistically add a year or two to an employee’s tenure. Other factors such as exciting international travel or access to a corporate Skybox at Fenway Park may tip the scales as well. If, however, you have just the opposite situation (e.g., you are in a “mature” market with a “mature” product), you can deduct time. Unfortunately, you should probably also deduct time if you have Celtics season tickets. So, the next time you have a valued employee tender a resignation, ask yourself, “How long would I stay in that job?” and answer honestly. Don’t feel bad when an employee leaves for a better opportunity that was not available to them at your company. Be proud and happy that you were part of their career growth. Only feel bad if you could have provided the next best step in their career and you didn’t.

About the Author

Betsy Harper – CEO and Managing Partner of Sales and Marketing Search Sales and Marketing Search was founded in 1992 to serve emerging companies with top-notch sales and marketing talent. Protect yourself from sales hiring sin! Sign up for Betsy Harper’s monthly E-Newsletter that coaches CEOs and senior managers on finding, hiring, and keeping great sales people and you’ll receive a free copy of “The Five Deadliest Sins In Hiring.” visit us at Sales and Marketing Search. Click Here Now to get your free copy today.

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