If Hunter/Farmer Fails…What’s Next!

Presented by:Chuck Sujansky, CEO

KEYGroup®

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Hunter/Farmer ModelHunter

AggressiveResults nowLow patienceWork solo

FarmerPatientNurturingLow assertivenessLow independence

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SALES TREND

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1 2 3 4 5 6 7 8 9 10 11 12 13

YEAR

SA

LE

S $

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What’s the Cause of Turnover?

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TurnoverPoor cultural fitPoor managementUndefined or unrealistic goalsPoor job fitPoor compensationLack of training

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What does it Cost?

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What’s the Cost of Turnover?1-2 times annual salary

If a $50,000 annual salaried employee leaves, it will cost a company approximately $50,000 to $100,000 to replace

him/her.

•Recruiting Expense

•Interviewing Time

•Headhunter Fees

•Lost Productivity

•Training Time

•Possible Relocation Expenses©2012 KEYGroup®

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Cost of TurnoverA company with…

200 employees An average annual salary of $50,000

And a 15% turnover rate

will experience a turnover cost of $1,500,000

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Additional Sales To Make Up The Cost

Assuming a 20% profit margin… a company would have to generate an additional $7,500,000 in sales to make up for the turnover expense.

20% of $7,500,000 x 20% = $1,500,000

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Reducing turnover by 20% will result in a savings of $300,000 per year.

•15% to 12% turnover rate

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CURRENT STATE Professional Sales Employees

Employee Output

% of Output

Difference in Output

# of Ees

Total Output

Under Performers

$1,000,000 5 $5,000,000

Average Performers

$1,320,000 +32% $320,000 20 $26,400,000

Top Performers

$1,742,400 +32% $422,400 5 $8,712,000

30 $40,112,000 Total Output

$1,337,067 Output per Ee

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FUTURE STATE Professional Sales Employees

Employee Output

% of Output

Difference in Output

# of Ees

Total Output

Under Performers

$1,000,000 3 $3,000,000

Average Performers

$1,320,000 32% $320,000 12 $15,840,000

Top Performers

$1,742,400 32% $422,400 15 $26,136,000

30 $44,976,000 Total Output

$1,499,200 Output per Ee

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Current Future Change PercentTotal

Output$40,112,000 $44,976,000 $4,864,000 +12%

Output Per Ee

$1,337,067 $1,499,200 $162,133 +12%

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Improvement

Net Effect

Reduced Turnover $300,000

Profit on Sales $973,000

$ to the bottom line $1,273,000

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Determining what turnover costs you Conduct exit interviewsIdentify any themes or causes of turnover that you

need to addressDo the math – what is your average sales salary X

number of people who leave in a yearDetermine the increase in sales you need to make up

for loss – or investment you need to make to cut your losses

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What Can You Do to Reduce Turnover Costs and Improve Productivity?

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People fail in their jobs not because they are incompetent…but rather because they don’t match the job!

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What you see during an interview

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People fail in their jobs not because they are incompetent…but rather because they don’t match the job!

Put the right person in the right job!

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Putting the right people in the right jobsAssess competencies of your high performers…and

bottom performersDetermine the competencies of your high performersEvaluate your hiring processDoes everyone in the hiring process have the same

understanding of the job openingAt the very least, ensure you are asking behavioral

interviewing questionsAll interviewers should meet and come to a consensus

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Sales Checkpoint

Measures 7 Universal Sales Competencies: Entrepreneurial Approach Understands the Prospect Develops Appropriate Solutions Prospects Proactively Manages Selling Process Closes the Sale Manages Sales Relationships

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1) Entrepreneurial Approach• Reflects entrepreneurial attitude• Time optimization• Sets effective goals2) Understands the Prospect• Recognizes buyer behavior• Understands the purchasing process3) Develops Appropriate Solutions• Uses feature and benefit solutions• Knowledge of products

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4) Prospects Proactively• Identifies prospects• Gets appointments5) Manages Selling Process• Understands client-centric selling• Establishes rapport• Identifies prospect's needs• Counsels prospect

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6) Closes the Sale• Explores prospect's options• Presents ideal solution• Overcomes objections• Closes effectively7) Manages Sales Relationships• Secures the relationship• Develops the relationship

Coaching tips you get from the Sales Checkpoint•Agreement of Critical Skills Alignment•Variance in Critical Skills Alignment•Gaps in Perception•Development Opportunities•K-S-S Method•Action Steps

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Coaching people upAsk what they love…and hate…about their jobGuide them to identify their strengths/weaknessesGet their input on what they need to start, stop and

continueAsk what you can do to best support themGive them on-the-job development opportunitiesCheck in with them regularly

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Ask yourself…Have you analyzed your sales team’s performance…on a deep

dive?Do you know dollar figure you are losing in turnover or

profit…and what you need to make up in sales to close gap?Are sales professionals’ expectations aligned with yours?Are you coaching people up based on a clear picture of what

they need to develop?Are you delivering the right training?Are you measuring all of the above to know if you are making

progress?

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Harvard Business Review“Job Matching for Better Sales Performance” HBR Vol. 58, No. 5

“It’s not experience or college degrees or other accepted

factors… success hinges on a fit with the job.”

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©2012 KEYGroup®