How To Reduce The Potential Cost Of Losing A Salesperson

Written by Sean McPheat | Linkedin thumb

Losing A SalespersonI once spoke to a sales manager who was complaining about how many salespeople he had lost in the previous three years.

He was asking me if we could run a motivational programme for his team so that they would go out and sell more stuff, and stay longer at his company.

I asked him if he had calculated the cost of losing so many good people.

And I didn’t just mean hard cash costs.

He hadn’t.

I covered over some of the following information, which got him thinking:

  • Without a robust hiring policy, it’s possible that your choice of salesperson could come back and bite you hard. The overall cost of advertising, screening, hiring, training and coaching a new salesperson can run into many thousands of pounds. It has been estimated that making a bad decision at hiring time could cost between 150% and 200% of the salesperson’s salary.
  • When you lose a salesperson through redundancy, termination of contract or simply moving on, you lose the continuity of contact with current and future customers. This can affect the relationship your company has with clients in your area.
  • If your competitors get wind of a territory not being covered by your company, it’s likely they will use that opportunity to put more effort into covering your existing customers.
  • Your current customers may well question the confidence they have in your company if they continually see new salespeople covering their area. It means they have to repeatedly have to bring new representatives from your company up to speed with their values, company culture and sales strategies. It can cause some buyers to lose faith in you.
  • High salesperson turnover can have a negative effect on salespeople who stay. Morale may drop and the effort the remaining salespeople put in may be affected.

He asked what he could do about his staff turnover, and I said that running a motivational session would be like putting a plaster over a gaping wound.

He needed to address the real, deeper problems that was causing people to leave in droves.

These should include:

  • A robust recruitment policy. This involves ensuring any recruitment agency you use or the people in your company who recruit have clear information on the type of person required for the role.
  • Aligned with this, make sure the candidate profile matches your firm’s sales strategies.
  • Make sure job descriptions are up-to-date and reflect the type of market you are currently working in.
  • Ensure your interview and selection systems allow you to filter through the most appropriate people.
  • Build a vigorous and strong maintenance programme for salespeople’s growth and development. This may involve creating a real-time personal and professional development process for each salesperson, so they can see how their sales skills can be progressed.
  • Build a specific and achievable remuneration package that rewards people not just for sales achieved but also for customer loyalty and quality of back-up services.
  • Create opportunities for salespeople to advance through the sales department. This doesn’t mean promoting your best salesperson into a management position so they don’t leave; it could require you to create different levels of position within the firm. If a salesperson knows they could be promoted to a senior role within the department, and still keep their sales position, it may incentivize them to stay longer and with more motivation.

The sales manager I spoke to has since put some of these ideas and others into operation and has seen a rise in morale, plus a decrease in salesperson turnover.

Much better than spending hard-earned profits of a motivation day that wouldn’t have dealt with the real problems!

Happy Selling!


Sean McPheat

Sean McPheat
Managing Director

MTD Sales Training | Image courtesy of Big Stock Photo

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Originally published: 8 February, 2018

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