If you’ve been in startup leadership for any amount of time, when I say retaining sales employees is especially hard right now, you probably know exactly what I mean.
It is PAINFUL when your best people leave you and you’re left figuring out how to rebuild. But if you’ve experienced this first hand, you’re not alone – some of the data swirling around on sales retention for tech startups is a little scary:
- The Tech/Software sector has the highest turnover rate of any industry (13.5%)
- Salespeople turnover at twice the rate of the rest of the labor force (27%)
- The average tenure of a VP of Sales has shrunk to just 19 months
Why is this so hard right now? Can you eliminate or reduce it?
Without a doubt, yes. There are ways to combat this (it’s why I founded ATP in the first place) and there are two sides to it: your processes as a company and know which people are the right ones to hire in the first place.
Each of these is a substantial topic, so in order to make this practical, I decided to split this into two articles. We’ll focus on what you can do with your business and your leadership to increase the chance that your sales reps will stick around in this one.
Let’s get into it.
Why do salespeople leave?
Type that question into Google and you’ll find a variety of articles on the topic. Most of them point towards compensation as being the number one reason. However, I think compensation is just the tip of the iceberg.
Great example: while not specific for sales, a recent study on why 10,000+ professionals left their jobs by LinkedIn suggests other factors are the bigger culprits:
Compensation only comes in at #5 (Courtesy of Linkedin)
However, here’s the thing: my experience talking to people every single day about what their missing pieces are is consistent with these data points – especially for top performers. And while yes – top performing salespeople need to have top-level compensation ($ for value folks!), the real reason you’re going to actually retain them isn’t as simple as throwing money at them.
Simply put, all-star talent has a different mindset… or to paraphrase Simon Sinek, “they see compensation as a result, not an end.” They know that the real game they need to play is to better serve their customers… and that the better they do this, the better they’ll be paid (or should be).
They also know things like the mission of the company (a big piece of culture), product/service, opportunity, and leadership are the foundations for allowing them to do that. So no amount of money is going to make up for failures in those things, since it’s going to stop them from winning the game they need to play (cue Einstein’s definition of insanity).
So that said, here’s what it takes to fight the reasons for departure above and hold on to your best people.
1. Create continuous opportunities for growth that all-stars can’t resist.
What do most top performers in sales want? To grow – both themselves and the startups they work for. That’s what makes them top performers! So the moment that potential stops existing is the moment they’re going to get bored and start looking for something new.
This can include everything – from compensation to title to responsibilities. And to keep A+ salespeople engaged, you’ve got to keep raising the stakes for them across the board at the right frequency.
While this will look different for every team, the best way I’ve ever seen this done is with a “feeder system” of promotability – or in other words a strategically designed, transparent system of targeted milestones that increase in difficulty and responsibility over time.
If you have SDR’s, know what it takes for them to be successful and help them earn a promotion to AE inside of the first year (including a comp boost). This “quick win” for a newer hire is the way to “set the hook” in young, hungry A+ talent with the grit to succeed (it’s the reason why people who hit the jackpot at a casino often end up having gambling problems later in life).
From there, set the milestone a little bigger. Offer the opportunity to progress to Mid-Market and make it a little more difficult to achieve. And so on and so forth to Enterprise to Team Lead to Director and more.
Not only will this help you keep your talent engaged and excited, it’s also the best hiring strategy around. It promotes from within, saves a lot of $$ on churn, and you’re only hiring for a skills gap from the outside to compliment the team.
Something to keep in mind…
Your advnacement plan has to be fair, achievable, and you’ve got to do your part as a leader to help your people actually hit the milestones. Remember, top performers want to see and feel results. Furthermore, this has to be well-defined, easy to digest, and transparent. You should be discussing and explaining it to those you hire in from the outside in interviews so that expectations are properly set.
2. Be a leader all-stars trust.
It’s been said that “people leave bosses, not companies.” I think truer words have never been spoken. It’s really hard to do great work if you’re facing obstacles where you need to be receiving support.
I’ve written an article previously on what great leadership looks like and how it has impacted the businesses I’ve been personally involved with throughout my career. But to summarize what it’s all about, being a leader that world-class talent trusts really boils down to empowerment.
How to be a great leader:
Create psychological safety. Google studied what makes teams more productive and this was the single most important factor. Essentially, this means creating an environment where your team believes they are safe to take interpersonal risks.
Become a master listener. Great leaders take their team’s contributions seriously, and go out of their way to show their people that they’re valued by truly absorbing what they say.
Communicate clearly. Keep in mind, doing this is more than just your words. It’s everything you do to connect with your team, including your presence, actions, attitude, tone of voice, the way you phrase things, your timing, and more.
Know your “why”. Inspiring leaders have well-defined, well-articulated, and unwavering vision for what needs to be achieved. After all… if you don’t know where you’re going, how will your team?
Operate with integrity. Your people can’t trust you if you don’t do what you say you’ll do. Period.
3. Build a magnetic culture.
Nope, I’m not talking about ping-pong and free beer. Real sales culture looks like the team at Inspire, a clean tech company with a mission to help consumers and businesses tap into the power of clean, renewable wind energy led by my dear colleague Zac Lowder.
What do Zac/Inspire get so right? They have built their culture on clear and compelling mission and work their tail feathers off to make sure they hire and empower all-stars that have both the skills and desire to join them. The result? 2-3x growth (there’s a reason they call themselves Avengers).
A+ salespeople care about culture – one they can believe in, and will be excited to get out of bed in the morning for. And, one that will support them on their quest to serve your customers better. Here’s some of the best ways to do that:
- Have a vision your talent can get behind. And be able to articulate it in a compelling way.
- See the point on leadership above. It all starts from the top.
- See the point on opportunity above. Allstars crave a bigger stage.
- Set the tone with a strong candidate experience and onboarding program. This going to require an entire point all by itself…
4. Roll out the red carpet during interviews and onboarding.
I’ve added this last point about interviews and onboarding last for one very important reason… you can do all the work on points 1, 2, and 3 above and still totally blow it on this last step if you don’t get your candidate experience and onboarding done right.
When you go to hire, you MUST make sure the things your candidates will really experience when they join you shines through transparently. Difficulties, rainbows, and all.
You can’t fake this if you want talented people to stick around… you need to give them a chance to make an honest assessment if it’s right for them. Failing (or choosing not) to do so just makes the inevitable more painful for both of you.
Not everyone always realizes this is happening, so here are a few things I’d recommend incorporating into your interview process and onboarding experience if you’re not already:
- Get your candidates involved with the team pre-hire. And not just a half-hour handshake… give them a real chance to live and breathe what it’s like to truly work with you. Have them ride along for a day or jump in on a few brainstorming meetings – really try them on for size!
- Answer their questions completely and honestly. Pop up the hood and show them what’s inside. Don’t deceive here – let them (no, encourage them) to ask difficult questions and give them straight, no B.S. answers in return.
- Get real with them about the difficult parts of the role. Be open with them about the challenges what they will face, either through exercises during interviews or by letting them “experience it” before they have to do it.
- Show them different parts of your business, not just the sales team. Have them spend time with client success, product, finance, etc. and let them see how the organization really works.
- Set the tone with onboarding that matches your culture. In other words, if you expect it to be fast moving and competitive, the onboarding should mirror that. Ask for feedback and implement that which you receive. This is still a two-way street!
- It doesn’t stop after offer. Get them immediately setup with a mentor. Map out their first month with the team. Have their equipment ready and waiting. Schedule proper kickoffs that first week. Have the “welcome wagon” waiting. Create a concierge type process. Remember the golden rule here, it will pay off and then some.
We’ve covered a lot here, but if you take these to heart, you’ll not only keep your best people, you’ll build a workplace environment that A+ salespeople won’t be able to resist. The reason I started here is none of that knowledge really helps you if you don’t have your company and culture solidified first… even if you find great talent, they’re still not going to stick around.
The other piece of retention is really knowing who is going to pan out in the long run and who is not. I’ll tackle that in another post, so stay tuned!