Sales organizations invest heavily in data and analytics in order to measure the potential long-term value of their customers. Yet few apply the same discipline to their own internal sales force. This is surprising, given the increasing challenges sales managers face in acquiring and retaining talent in today’s economic environment.
Many sales leaders are unclear about how to identify, attract, and hire reps who have the “perfect” profile, and they have little idea of what motivates such people to stay. Nor do they know how to combat the “performance plateau,” where top performers start to stagnate. They are, however, all too aware that employees vary widely in performance, both in the early stages after they are hired and in the longer term, when the disparity between top and bottom performers can be sixfold.
Beyond sales performance, employee attrition is a permanent headache for many sales leaders. Turnover can often top 50 percent a year and is most heavily weighted with recent hires, meaning organizations never recover recruitment costs for the hires who leave. McKinsey estimates that, in some organizations, the cost of a lost employee can be $25,000 to $50,000 when lost productivity and customer dissatisfaction, as well as recruitment and training costs, are factored in.
Many sales leaders have begun to use analytics for day-to-day performance management , but they haven’t gone beyond such short-term analysis to quantify the lifetime value of a salesperson the way they routinely calculate the lifetime value of a customer. Forward-thinking sales leaders, however, can now take performance management to the next level by using data to directly link talent management to increased financial value. This approach can drive up to a 10 to 20 percent increase in revenue per salesperson and reduce attrition rates by double digits.
By Eric Buesing, Alexander DiLeonardo, Maria Valdivieso De Uster , and Ben Vonwiller
Better and more thoughtful ways to measure the potential lifetime value of each member of the sales force can not only improve talent management but also create more value.
More: https://www.mckinsey.com