Salespeople quit for a whole host of reasons. But let me say this: turnover on its own is not bad. There's the wrong turnover and the right turnover. You need to know the difference.
So, why do sales representatives quit? Sales reps leave for many reasons, primarily due to poor compensation structures. However, it isn’t the only reason and is determined by the type of individual.
Here are the top 10 reasons why different salespeople may leave your organization:
- Being held accountable
- You’re applying pressure
- Uncompetitive sales structure
- Low deal velocity
- Inadequate incentives
- Lack of long-term bonuses
- Prefer company stability
- No career advancement
- Better outside opportunities
- Keeping poor performers on board
Here’s what we don’t discuss. Turnover on its own is not bad. It’s the kind of turnover.
There’s bad turnover. And then there’s the right turnover.
The bad turnover sees your top salespeople leave. But good turnover flushes out your poor performers and low accountables, optimizing your organization’s sales population.
Let’s discuss what motivates all types of salespeople to quit; your low and top performers.
INSIGHTS IN THIS GUIDE
Wrong Turnover vs. Right Turnover
There are two types of turnover.
- Wrong turnover: you lose your top performers and individuals that are a good company fit
- Right turnover: you lose the wrong individuals in your organization
Understand the difference because your sales productivity and profitable revenue depend on it.
Right turnover
Good turnover is when the wrong individuals who are not a good fit for your organization leave. As soon as you hold people accountable, they’ll start dropping like flies.
These sales managers and reps are incapable of helping your sales force achieve your goals. And there is no core values alignment, therefore cancerous to the organization.
It doesn’t matter if they fill a seat and make some money.
If that person is not the right for the seat, you need to vacate them.
That’s the right turnover. You are weeding out your salespeople, preventing you from making progress towards long-term success.
Wrong turnover
The wrong turnover is when your best salespeople and top sellers with core value alignment and a good culture fit leave the organization.Â
That’s an individual you don’t want to lose. It hurts as a tangible loss to company revenue, growth targets, and morale hit.
Most of the time, sales teams operate as a team to hit the team goal.
That top salesperson is your pace setter. Other employees will want to chase your best salespeople down. Lose your pacesetter, and you lose top talent that showcases a new level of ability.
It is a big hit to morale, and it’s not good.
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2 Reasons poor performers leave a company
1. Being held accountable
As soon as you start holding people accountable, they start dropping like flies.
Now, at the core is weak sales leadership and poor management. At this point, you usually don’t have a turnover problem.
When you run a very loose ship, everyone gets away with murder. Sales targets and sales goals are met— no one’s held accountable. And sales reps do foolish things all day long.
Why would you have a turnover problem? Most sales managers and reps will stick around and operate at their own leisure without pressure to level up.
But turn up the heat, and you start forcing people to hit their sales goals, level up, and do their job.
Now, you’ll see a correlating increase in turnover rates.
As soon as you hold people accountable, they start dropping off like flies.
2. You've applied pressure
There is no such thing as unrealistic quota assignments. When we raise the stakes, it incites fear in lazy salespeople and often turns them negative.
If you have sales reps constantly complaining about quota attainment, marketing, leads, or pricing, they are likely underperformers and have poor culture fit.
It is normal to turn the heat up in an organization. Competition is normal.
Remember: sales isn’t for everybody. Some prefer a non-commission-based salary. In those cases, move these salespeople out ASAP. If they’re still a good culture fit, it might be as simple as repositioning or relocating in your organization.
But, if you apply pressure or enforce standards and are met with complaints and negativity, it stems from being unable to hit numbers.
Rose Garden Sales Accelerator Process
We evaluate your compensation structure, tech stack, sales playbooks, sales strategy, sales process, hiring and onboarding to ignite revenue growth.
8 reasons top sales talent leave a company
1. Uncompetitive pay structure
Salespeople leave primarily due to poor compensation structures.
I have seen many salespeople stick around in jobs because their compensation structure was too good.
Many people have zero work-life balance, work in a toxic culture, and stay to make a lot of money.
I am not saying those factors won’t dissuade someone from leaving a sales team.
But, build a rock-solid compensation structure that significantly pays them more than anyone else in the industry (about 25 to 30% more), and your modern salespeople aren’t going anywhere.
And you shouldn’t be content with bad company culture. But your focus should not be on how you make your sales team happy.
Your focus should be on the comp structure.
You’ll never solve your turnover problem because it will be a race to the bottom. No more free lunches. No more foosball tables. No more craft beer.
They’re happy until they’re not until those things become an entitlement.
Now I am not suggesting that paying your salespeople right gives you the right to mistreat them. Not at all!
But excellent compensation plans are the best way to retain great salespeople and solve 90% good turnover issues.
The compensation structures allow the organization to increase accountability and pressure while building a pro sales culture with the right team.
2. Deal Velocity
Another advantage of an excellent compensation structure is ensuring that your sales process and cycle allow for deal velocity.
High deal velocity is when more deals can move through quickly without administrative tasks and red tape.
That is part of your compensation structure because the quicker a deal closes in your sales process, the faster the person can hit the quota and target.
They also spend less time mucking around with deals and more time selling.
Remember, your top salespeople are coin-operated. They will jump ship if someone else can help them make better money.
3. Inadequate accelerators
Another element of an excellent compensation structure designed to retain salespeople are accelerators, incentives, and bonuses.
When a sales manager or rep starts exceeding quota, you accelerate their compensation structure—even better, make the accelerator retroactive to the current month.
For example, your quota is to sell $100,000, and I’ll pay you 5%.
An accelerated compensation structure would be I’ll pay you 6% on anything over 100,000.
The first means you hit $100,000, and I’ll pay you 5% on every dollar. After that, I will pay you 6%. So, you’re providing two different tiers.
But an accelerator with a retroactive upgrade means you unlock the second-tier percentage for everything.
So, instead of getting paid 5% on the initial $100,000, you’re getting 6% on it.
That is an excellent comp structure. And, I believe that every compensation plan should include that.
4. Inadequate long-term incentives
There should also be quarterly bonuses if you exceed the quota.
You don’t get a bonus for quota; you get rewards for exceeding quota. And that shouldn’t be tiered.
Provide your sales force with adequate long-term incentives, like annual targets and yearly bonuses, to keep them around.
Suppose your monthly quota is $100,000. I expect you to bring in 1.2 million for the year. And you get an annual bonus at 1.5, 1.7 and 2 million.
Make them very lucrative.
Great salespeople want rewards for the here and now but need clearly defined future incentives too. The executive team must specify these for top salespeople in a compensation package, or it’s only a matter of time before they move on.
5. Lack of stability
It’s human psychology 101. Most people need stability, and your top performers are no exception.
They will see constant leadership changes, layoffs, key stakeholders and investor issues, system, and process issues as red flags.
At the end of the day, if the way you conduct business threatens your top performers take home or bonuses – they will look for opportunities elsewhere.
Great salespeople want company stability because it ensures that salespeople can focus on doing what they do best—selling. Ensure your house is in order, with systems, processes, and structures that provide reps with accountability and transparency.
6. No career advancement
Sometimes sales talent leaves for reasons beyond the sales leader’s control. If your sales rep believes there are better opportunities elsewhere, you won’t be able to stop them.
It’s in a sales rep’s nature to go and explore new ideas and opportunities on the job market.
But the sales leader’s first instinct is often to save your top reps. And you try to determine the sales rep’s motives and reframe or reposition the situation. That will not work.
They may cite a lack of confidence in the leadership team. They may want more professional development opportunities. They may wish for a substantial pay increase. But the reality is you will never get the correct answer and…
You’re not going to save them, despite realigning and restructuring them in the company.
So, when your top performer wants to explore opportunities elsewhere, my advice, let them.
But always include the opportunity for them to return in the next six months.
7. Better opportunities elsewhere
Sometimes sales talent leaves for reasons beyond the sales leader’s control. If your sales rep believes there are better opportunities elsewhere, you won’t be able to stop them.
It’s in a sales rep’s nature to go and explore new ideas and opportunities on the job market.
But the sales leader’s first instinct is often to save your top reps. And you try to determine the sales rep’s motives and reframe or reposition the situation. That will not work.
They may cite a lack of confidence in the leadership team. They may want more professional development opportunities. They may wish for a substantial pay increase. But the reality is you will never get the correct answer and…
You’re not going to save them, despite realigning and restructuring them in the company.
So, when your top performer wants to explore opportunities elsewhere, my advice, let them.
But always include the opportunity for them to return in the next six months.
8. Keeping poor performers on board
Top performers have no time for low accountables on your sales team.
Low accountables and negative sales reps create poor culture. But as we discussed, excellent compensation plans are enough to keep any salesperson in the position.
When it becomes a problem with your top talent is when poor salespeople affect the sales tea, making annual and quarterly team bonuses.
Any sales rep affecting quota acquisition is a direct failure of the sales leader and the systems in place.
That is unacceptable.
You have systems, processes, and structures built on accountability and transparency to foresee and correct any possible issues making quota.
But, if a top salesperson sees no accountability for underperformances that directly affect their ability to make more money, you’ll lose them. They will not feel valued and start looking for opportunities elsewhere.
Do you know how to retain top sales talent?
Salespeople quit for a whole host of different reasons.
But remember, turnover on its own is not bad. Know the difference between bad turnover and necessary turnover.
If you need help with the bad turnover, follow our basic compensation structure, you’ll find that you’ll motivate the behaviors that will help grow your company and create crucial turnover.
Remember, salespeople, are paid to sell. You don’t want order takers, so weed them out and only grow the team members committed to the organization’s goals.
For more information on commission, and incentivization, speak with our team at Rose Garden.
Rose Garden is solutions-focused, so if you want me and my team to ignite your revenue growth, we will do so with our Sales Accelerator Process and Team Assessment.
About the author:
Ali Mirza is the Founder & CEO of Rose Garden, a national sales consulting organization, and featured in Forbes, Inc, Business Insider, The Huffington Post, Business Rockstars, and The Wall Street Journal.
Ali is a highly sought-after public speaker presenting at multiple national conferences on innovative ways to accomplish transformational growth on your sales team.
Rose Garden provides unparalleled support and guidance to growth-minded founders via sales strategy differentiation, world-class sales culture creation, and exclusive playbooks, processes, and scripts to position them for limitless growth.
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