So Ms/Mr. CEO, your sales team is experiencing some turnover. No big deal – right?
Your sales leader tells you that “they weren’t making their numbers,” so it’s justified – right? – wait, maybe not.
This is important – If you take this response at face value without digging deeper, you and your company are in for a (possibly debilitating) shock. Therefore, we recommend you not “settle” on responding to this critical question without exercising the Six Sigma 5 Whys Methodology to get to the root of the turnover issue. Don’t get us wrong, the inability to achieve sales goals is a valid reason for termination, but missing sales goals often is a symptom of other issues. However, sales team turnover costs – a lot.
Costs associated with a departing sales team member can range from 25%-200% of the annual salary. In addition, the company suffers in the following three ways:
- The decrease in business that comes from the departing salesperson no longer working their accounts or territory
- The added costs of finding, hiring, and training a replacement
- The loss of business associated with the “learning curve”
Assuming you did the work required and hired the right person, salespeople leave because they are dissatisfied—plain and simple. Not making the numbers, in this scenario, is only a symptom.
A large body of research is devoted to job satisfaction and sales team turnover. For example, we recently discovered Understanding Effects of Salesperson Locus of Control by Alex Hamwi, Brian Rutherford, James Boles, and Ramana Madupalli.
So I can hear it now – what?…wait! Locus of control?
Locus of control is a term used to refer to the extent to which humans believe they can control those things that affect them. Internal locus of control is good. The salesperson believes they have control over what affects them and have a part in determining their personal and professional outcomes (the next time you hire, look for this trait).
Too much external locus of control is terrible. With this view, things happen. We have no control over the outcomes. Too much external locus of control with a sales team member will foster job dissatisfaction. Not only does it increase job dissatisfaction, but it increases role conflict, which increases emotional exhaustion. Personality inventories, Myers-Briggs, DiSC, etc., are all excellent tools to help you understand where your sales team members fit on the locus of control scale. As pointed out in the study, sales leadership intervention is also a great way to help control the effects of external locus of control. The authors cite an IBM study showing that a weekly 30-minute or monthly “can bring light to many of these issues and allow the firm to take measures to assist the salespeople in shifting their locus of control to a less external focus.”
So here are the takeaways:
First, the loss of a salesperson is costly to the organization.
- Second, job dissatisfaction is the number one reason why people leave.
- Third, a significant cause of job satisfaction is caused by externally focused locus of control.
- External locus of control can be resolved by (1) understanding who is focused on external factors and (2) sales leadership intervention.
We provide these insights to – “Enable you to Enable” – that most important component of your operation – your revenue generation machine – your sales team.
When you think about sales effectiveness at your organization, does it seem like you are close but just missing those unique elements that give you that competitive edge? Looking for a way to understand how your buyer thinks, decides, and reveals information? At The Nova Consulting Group, we believe that professional selling is a craft. With the Advanced Sales Conversation©, you have those missing elements that move your salespeople from competency to mastery. With our deep understanding of what makes and sustains high-performance organizations, we provide integrated solutions that do not replace your sales methodology and yet advance a progressive selling mindset. Be bolder, more insightful, and get results. To learn more about how to master the craft of sales and encourage sustainable high performance, call (617) 933-7249 or email info@novaconsultinggrp.com.
