Onboarding – every company does it, but a shockingly few do it really well.
Sales managers wear a lot of hats – but their main responsibility is to build the strongest teams possible and maximize short and long-term performance. With this in mind, here are some alarming statistics showing this is much easier said than done:
- The average sales rep’s tenure is less than 2 years. (Sales Readiness Group)
- The average tenure of a sales manager is even less - 19 months. (ES Research)
- 47% of companies say it takes 10 or more months for new sales people to become fully productive. 67% say seven or more months. (CSO Insights)
In other words:
That’s why it’s not too surprising that CSO Insights reports only 58% of reps are making quota.
Better onboarding is one of the most important steps to maximize performance and it serves as a barometer for success. Bad onboarding comes with short-term and long-term opportunity costs in addition to threatening the tenure of your most talented reps.
David A. Brock, author of The Sales Manager Survival Guide, says onboarding directly links to quota attainment. Here are some highlights from our conversation:
Can sales onboarding be linked to overall quota performance?
DAB: Absolutely! There are a number of important measures that come from strong onboarding:
- New salespeople are a multimillion dollar investment. Too many managers don’t recognize that hiring a new sales person is a multimillion dollar investment—mostly in sunk costs and lost revenue. Treating the hiring and onboarding process too lightly results in huge revenue opportunity losses.
- “Time to productivity.” Strong onboarding significantly reduces the time it takes to get a new sales person performing at their normal “run rate,” accelerating revenue generated by the salesperson.
- Improved retention and reduced churn. As I mention in The Sales Manager Survival Guide, a very large technology company was experiencing 72% voluntary attrition in the first 12 months of salesperson employment. Their onboarding program was, “Here are some product brochures and training, here is your laptop and password, bathrooms are down the hall and to the left. By the way, I need a forecast next week….”
The company was hiring very good people but these reps weren’t prepared to be successful. My calculations showed the lost revenue impact was between $700M to $1B per year. 18 months later, after creating a strong onboarding and peer mentoring program, voluntary attrition declined from 72 percent to less than 20 percent — with huge increases in revenue and quota performance.
What is the first step towards better sales onboarding?
DAB: Sales Competency Models are critical—for a whole number of areas, but a main area is onboarding. Without a Sales Competency Model, organizations have no idea what skills, attitudes, behaviors, competencies, or experiences a salesperson is expected to learn upon completing their onboarding. As a result, there is no way of understanding how to design the onboarding program, when salespeople can exit the onboarding, or if the onboarding process is effective.
The Sales Competency Model, in this application, provides a “picture of the ideal sales person” after completing the onboarding. Too many organizations focus their onboarding on just product training. That’s probably one of the least challenging areas in skills development. Onboarding needs to outline the company’s sales process, strategies, differentiation, how to create value, how to get things done within the organization, and market knowledge (just to name a few.)
What’s one way companies can realistically lower their sales onboarding time?
DAB: Develop a comprehensive onboarding process and remember the following tips:
- Be clear about what the sales person needs to be able to do at the completion of the onboarding.
- Design the onboarding program around all the things required to be successful, not just product training.
- Make sure the sales manager is deeply involved in coaching and developing the new hire.
Manager involvement is very important. There needs to be weekly, if not daily, meetings with the manager to assess what the salesperson needs to learn and help them acquire those skills. One of the biggest problems, in addition to the absence of a well-defined onboarding program, is the absence of deep front line management involvement and ownership.
Peer mentoring is also very powerful. This is where a salesperson is assigned to a top performer as a mentor. Initially, they may just be tagging along to meetings, but they start seeing how top performers work, how they handle different situations, what they do to be successful. Later, the mentor may tag along on some of the new salesperson’s calls, coaching and mentoring them.
In addition to reducing risk of failure and shortening time to productivity for the new sales person, it’s a terrific development opportunity for the top performer. They start to practice the coaching skills they will need if they choose to go into management.
How would you describe the ideal sales onboarding program?
DAB: The only real answer is, “It depends.” Depending on the organization’s customers, solutions, products and how the company works, onboarding can range from days to years. When I first joined IBM as a salesperson, onboarding was about one year, with 50 percent in training and 50 percent working with a sales mentor. As a typical overachiever, I completed mine in 9 months – hold the applause.
Onboarding programs should include several components:
- Practical “field” experience - tagging along with experienced salespeople
- Strong front line management involvement and coaching
- Training on more than just product knowledge, including:
- Who to sell to and why
- Problems the organization solves
- Value proposition and differentiation
- Sales process
- Go-to-market strategy
- How to get things done in the organization
- Organizational tools, systems and processes
- Specific performance expectations
This may sound like a “big company approach to onboarding,” but I’ve seen companies of all sizes do this. For example, my company is very small and the people I hire have minimally held VP of Sales jobs, but their first 6 months is spent working on projects with a mentor to learn how we go to market, prospect and sell.
Organizations expect salespeople to produce millions in revenue as quickly as possible. A new salesperson is a multimillion dollar investment, don’t treat it casually - make sure you are maximizing your return on that investment. Think of what happens if new salespeople are inadequately onboarded — organizations could lose millions of dollars in revenue to competitors. If salespeople upset customers, those customers could be lost forever.
Regardless of the quality of the onboarding program, hiring the right people is paramount. Poor hires that take a good onboarding program will still be bad hires. The Sales Competency Model is critical to recruiting the right people. If you get the right people into a quality onboarding program, the results are remarkable.