Losing an up-and-coming salesperson? It might be due to their coworkers as much as their performance. Research by Sarang Sunder, assistant professor of marketing, shows how you can predict when and why salespeople quit.
It’s better to retain a good or even average salesperson than hire a new one. Keeping a salesperson is better for the budget, morale, customer service and overall success of the company.
How can managers predict when salespeople are likely to quit?
Sarang Sunder, assistant professor of marketing at the TCU Neeley School of Business, studied years of data on thousands of salespeople using a state-of-the-art quantitative model he and his colleagues created to predict which salespeople were likely to quit.
The most surprising result of Sunder’s research was that salespeople left due to their coworkers’ behavior as much as their job dissatisfaction.
“Certainly, employees leave due to poor performance, customer dissatisfaction and inability to reach goals, but they also leave due to their peers’ poor performance and turnover,” Sunder said.
The model utilizes big data to help managers determine which salespeople are at high, moderate or low risk of quitting, and then decide who, when and how to intervene to encourage them to stay.
Sunder’s research revealed three common reasons salespeople leave:
- Goals/quotas may be poorly designed.
Salespeople who consistently achieve their goals/quotas tend to stay because they have job security, incentives, and feel in control over their success. On the other hand, those who miss quotas also stay (perhaps until they are fired), since their poor showing limits their job opportunities.
It’s those average salespeople, the ones who could be great, who are most likely to leave because they don’t feel like they are given the same time, attention and opportunities as their more successful peers.
“Managers love their high performers and want to keep them happy, but they tend to overlook the average performers,” Sunder said. “These are the people who make up the largest part of the sales force, which makes them a profitable and powerful component in the overall success of the company.”
- They lack a motivating environment.
When there is little variation in sales performance among peers, people don’t feel challenged or have the incentive to work harder or smarter. With little to motivate them in their current jobs, they opt to leave for greener pastures.
- Peer turnover can be contagious.
Sunder’s research identified the important role of peer quitting behavior on the sales force. When companies have a lot of turnover, whether voluntary or involuntary, the salespeople who stay often lose faith in the company’s direction, or are fearful for their job security.
“When they see others jumping ship or getting fired, they think there must be something wrong with the company, or they lose trust in upper management,” Sunder said.
What are some interventions managers can take?
Sunder has this advice to keep your sales force from quitting:
Watch for average stand-out performers and give them incentives to increase their potential.
- Make sure your sales force is challenged. Set achievable goals and applaud successes.
- Increase communication about the strength of the company, and point to increased profits that are a direct result of sales.
- When employees quit, pay close attention to those who stay to prevent a snowball of turnover.
- Reward loyal employees with incentives that are comparable to other companies.
“Why do Salespeople Quit? An Empirical Examination of Own & Peer Effects on Salesperson Turnover Behavior,” by Sunder, S., Kumar, V., Goreczny, A., & Maurer, T., was featured in Harvard Business Review and published in the Journal of Marketing Research in June 2017.