Reducing sales force
churn / attrition
Retaining employees has now become a corporate imperative; many
companies have implemented creative strategies & solutions,
which they believe are now required to keep valued members of
staff.
The issue of employee turnover is often given no more than a
cursory glance by senior management. However when the opportunity
cost and associated sunk costs involved in recruitment, induction
and ongoing training are accounted for, there is clearly a financially
orientated business case for ensuring the retention of employees.
This business case can be presented to support action for any
category of employee, but as far as the Sales function is concerned
the case for retaining the top performers in the sales force is
even more compelling as they have the ultimate responsibility
of ensuring revenue generation for the company through the maintenance
and development of their customer facing relationships.
The time taken for new recruits to become fully effective is
often far longer than companies realise. This has been outlined
in research by Cahners in the US, which shows that trust between
a Sales person and buyer takes 8 meetings to develop.
In the FMCG (Fast Moving Consumer Goods) marketplace, 5 initial
calls and a consistent monthly call frequency are required to
build a retail relationship to the point where maximum value can
be extracted.
These are clearly important issues, which impact both the costs
(relatively easy to measure) and revenues (much more difficult
to measure) of the company.
Meridian’s experience highlights the failure of organisations
to take a structured approach to sales force Attrition. Most companies
do not fully understand the true cost of attrition, the inter-relationships
of the causes and thus the best corrective action. When an organisation
is faced with high levels of attrition, it pragmatically attempts
to resolve the issue by filling the role vacated as quickly as
possible, with little, if any, effort to understand the cause
and effects.
Meridian approaches this issue with a three step methodology.
First we help our clients understand the causes of churn (hygiene
factors, motivation, etc.) Then we assess the impact of the churn
on the business and finally we develop the solution to rectify
the problem.
