Hiring a salesperson can be an expensive endeavor.
Hiring new sales talent to accelerate growth may appear straightforward. However, many companies fall short in keeping talent and getting them to produce an acceptable level of revenue within 12 months.
Getting new salespeople to generate revenue faster is a trait that Best-in-Class organizations have mastered.
The first six to eight weeks after a salesperson is hired is critical to their retention, performance, and long-term success, so the onboarding process must be robust. While we expect salespeople to be resourceful, you shouldn’t “throw them into the pool and expect them to swim.”
A formal, milestone-based onboarding process provides the framework to give them everything they need to succeed within your sales organization within an appropriate time frame.
If you are part of a B2B organization with a long sales cycle, it can take more than a year for a new hire to generate enough sales revenue to pay for themselves — even though the cost of a new hire affects your bottom line on day one. That means that hiring many salespeople at once can drag profitability -unless you can get new hires to generate revenue faster.
In today’s “buoyant” economy, companies that aren’t planning to hire new sales talent are still recruiting to address attrition and the deliberate churn of poor performers.
A third of new salespeople won’t succeed.
The cost of a new hire flameout is much higher than their salary. When you factor in recruiting and training costs, travel & entertainment, management time, and lost revenue opportunity, profit on that hire in the first year is much less likely. For example, a rule of thumb is that it will cost you about 2x the fully loaded base salary.
If you hire several B2B salespeople that will make a difference in your revenue goals, it stands to reason that their costs will also make a real difference in your profits.
Reduce Onboarding Time
If your firm has a nine-month sales cycle, reducing the time to revenue from nine to five months can reduce your net cost of a new hire to break even in the first year — which means faster growth in the business.
To reduce the number of months spent onboarding, consider the following:
– Learning — Develop an agile approach that adapts to new hire skillsets beyond knowledge transfer and product training.
– Waiting — The faster you introduce new hires to customer situations, shadow learning, and selling opportunities, the sooner their real learning begins.- Conduct fewer demos but with better results
– Increase the number of months they are selling — Start them off with more minor, short sales cycle opportunities or late-stage ones and give them intensive coaching and training.
Increasing the efficiency of sales onboarding is a simple math problem:
Fewer months Learning & Waiting + More months Selling = Revenue Sooner
I don’t suggest that you lop-off items from your onboarding plan to reduce time. Instead, I recommend that you re-orient how a salesperson spends their time onboarding.