Crazy high turnover in the B2B sales world continues... Let the music begin, again!

It’s not rocket science folks! B2B sales have been ”screwed up” for years... Part 7

(Originally published June 24th, 2015. Update December 29, 2019)

Crazy high turnover in the B2B sales world continues... Let the music begin, again!

I've been voicing my concern, i.e. ranting and raving for over a decade, about the horrendous high turnover in B2B, business-to-business sales jobs that seem to be ignored by too many in sales management. Notice, I don’t use the term sales leader. That’s because to ignore high turnover for over a decade is not being a leader but a manager at best.

I have been fortunate over the years to get to know a ‘few’ others that can see the big problems in the B2B sales world that many others are so blind to. Graham Hawkins and Derek Wyszynski are two that immediately come to mind. If you don’t follow them on LinkedIn, you should. They both have brought some common sense to the crazy world of B2B sales.

I’ve often said that being in B2B sales in most companies today is kind of like playing a game of musical chairs. Someone is always gone from the Monday sales meetings, and there are new faces that appear out of nowhere. Again, again and again. Then the game starts over, a few salespeople are gone in a short amount of time and new ones are hires. 

I have been in sales for a couple of decades working, speaking, researching, and writing my second book on B2B sales, so I have been fortunate to get to know many folks in sales roles throughout the USA and around the world. Many I have met face to face and others I’ve only corresponded with via social media like LinkedIn. From there the conversations over the years either continued on LinkedIn or moved to email, phone calls or even online like Zoom or Skype with hundreds of contacts from around the world. 

It is saddening to see ‘all’ of the weekly notifications of sales job changes on LinkedIn, which only continue to reinforce my findings. Which is, that something needs to be done about the massive turnover in B2B sales, the status quo is broken, and it needs to be fixed!  Sales turnover just continues to get worse and worse for the average B2B salesperson. 

I quickly determined that this topic was one that salespeople wanted to talk about, but they would ask if they could talk to me on the phone, under the condition that nothing would be made public. The majority were salespeople, but I was contacted by all levels, i.e. CSO’s, President of Sales, VP of Sales, Regional Managers, etc. Almost all of them said I was right with all of my articles, feedback, posts about the huge problem of turnover. Most people said they wanted to talk to me to help in researching my next book on B2B sales, but again, I had to promise not to ever publish their names or the name of the company they worked for presently.  

My research involved a mix of international, regional and local companies. Almost every person I talked to said that the turnover for salespeople at their present company was very high and it would be embarrassing if ever made public.  

Knowing the cost of hiring a new employee, my only thought was "WOW!!" One salesperson said that over the past 5 years, no salesperson in the Treasure Valley Idaho made it over a year with their employer. As well, we all know that once someone leaves the process starts all over. The expense of a potential employee with time to screen, interview and hire, time as well as the expense of training and monitoring and the managerial time of overseeing this entire process adds up very quickly, not to mention the toll it takes on overall morale and productivity. The company referenced above has a good product/service, I should know, I'm a customer. But, how could that high turnover continue without someone taking notice and someone being held responsible, i.e. sales management?

Originally, I hired someone to find studies helping me research various topics in my book. Then, in an attempt to further validate the statistical data, I contacted the Idaho Department of Labor in Boise, Idaho. After numerous transfers and callbacks, I was finally put in touch with the gentleman in charge of tracking the analytics on employee turnover in Idaho. Unfortunately, he informed me that the turnover rates in the majority of the states aren't separated by job title. He told me that most businesses don’t want to be bothered with having to give too many specifics on turnover rates and the vast majority of state’s unemployment government agencies don’t require any specifics, i.e. titles and roles for each position.

I believe that most studies’ findings are the best-case scenario on sales turnover, yet still alarming. So, to get truly accurate B2B (business-to-business) sales turnover stats in nearly impossible. 

Many people supposed sales gurus and even well-meaning authors, others, site sales studies that they have no clue where they came from. I have discovered that many have small sample sizes and no additional information on who and how they sampled. I reached out and found that one study only had 21 sales managers sampled. No other information was given, i.e. size of the company, inside and/or outside salespeople, etc.

Many times, these types of studies are posted all over the internet, articles, and publications that have no date/year or source listed. Then I would have to try to Google the study numerous ways to try to find where they came from and when the survey was done. Many times, if I found the source, I would find that the study was from years or even decades ago. Several I found were from the 70s and one of the most quoted on the internet, publications and even sales books, was from the mid-50s. Now, that couldn’t be a problem??? (Insert sarcasm here.)

I dare say that surveying salespeople anonymously with a large sample size, designating inside vs. outside B2B sales, size of company, industry, etc. would be the best way to get an accurate picture of the problem. I am confident that the problem of B2B sales turnover would be found out for what it is, a crisis. That’s gone on for years, and years. 

Which leads to another big problem with many of the studies, as mentioned, they are based on the honor system to those in sales management. As a sales manager, I am sure you’re going to be ‘completely’ honest on how ‘bad’ your sales team is doing and how bad of a problem you have with turnover among salespeople. Sure, you would. Not!

I would offer to say, all sales studies you see should be highly suspect of being somewhat to very inaccurate. At best, they paint a rosier picture than what exists in reality. Which should scare most, because most of the studies show high turnover rates, low goal attainment, etc.

I’ve tried to find a few studies with decent sample sizes and that are from reputable research companies. But, as mentioned, even the best companies use the honor system. Meaning that you asking many sales managers to be completely honest about how bad or good things are under their management never leads to the truth. And to add to the problem, I would be willing to bet most sales managers don’t have a clue on how to even figure their true turnover number of their B2B salespeople. (Psst, sales managers, here is a great article on how to calculate yours. Sales Employee Turnover Rate: How To Measure (and Lower) It, Written by AJ Beltis, HubSpot, Content & Acquisition Manager. 

Let’s see how sales management has done, their scorecard since I started to research and write my second book of B2B sales.

- I talked to my dad, a math whiz engineer, who said the studies I sent him are ‘not’ giving enough data to truly figure sales B2B turnover rates. One of several that I respect in 2014 says, remember the honor system only now, say every four years the ‘whole’ sales force turnovers over. Wow! The whole sales team is new. Can you say WT@! And, has gotten progressively worse ever since. 

In 2018 depending on which study you look at B2B sales tenure dropped to 18 - 14 months. (Oh, where do I sign up for a job, not a career, of less than two years.) Says every new college graduate. Not!!!

- According to an article in the July – August 2017 issue of the Harvard Business Review, How to Predict Turnover on Your Sales Team, “Estimates of annual turnover among U.S. salespeople run as high as 27%. This is an alarming rate especially given how challenging it is to hire top sales talent in a tight labor market”.

“Companies worry about employee attrition in every department, but it’s especially costly in one function: sales. Estimates of annual turnover among U.S. salespeople run as high as 27% - twice the rate in the overall labor force. In many industries, the average tenure is less than two years. While some attrition is desirable, such as when poor performers quit or are terminated, much of it isn’t - and every time a solid performer leaves, his or her company faces many direct and indirect costs. U.S. firms spend $15 billion a year training salespeople and another $800 billion on incentives, and attrition reduces the return on those investments.” (The cost of turnover in the B2B sales world is staggering!)

- The average tenure for a sales development representative, SDR, in 2018 1.5 years, down from 3 years in 2010. Only 8% of SDRs stay in the role for 3-plus years. According to a Bridge Group study.

- “Only 41 percent of respondents rated their sales training as effective (defined as a combination of “always” and “almost always” effective ratings), whereas 26 percent of respondents rated their sales training as ineffective (defined as a combination of “sometimes” and “not effective” ratings). These results demonstrate that from the perspective of salespersons, the average encounter with sales training may leave a lot to be desired.”, The Salesperson’s Perspective on the Impact of Sales Training. Sales Readiness Group partnered with Training Industry, Inc., 2018.

- According to the Bridge Group 2018 report who surveyed more than three hundred fifty B2B SaaS companies. The average sales organization salesperson turnover rate is now 34%, with “involuntary turnover up nearly two-thirds of that number.” The same research suggests that one in ten companies experience turnover rates above 55%. (And again, is the studies with decent sample size are based on the honor system. “Yes, we have a terrible turnover rate amongst our sales force! Says, little to no one in sales management.)

The cost of ‘all’ of the churn, turnover to companies, is STAGGERING as mentioned! Especially, when considering all of the direct and indirect costs. But, I will put that aside for now. Sales management, don’t worry, I will be back to add it to your scorecard in the negative column here shortly.

Can anyone see a problem? As previously mentioned, the problems are obvious to non-sales and salespersons alike but not to most in sales management. What about sales managements bosses’? Many just go on doing the same thing year after year. How can the top supposed leaders of companies continue to let the insanity continue???

 So, I use analogies of sports and other professions applying the same idiocy, i.e. insanity, to help others in sales management possibly see the light.

Scenario #1, Auto Mechanic

Let's use the same best practices for great retention rates, training from the B2B sales world and apply them to your auto mechanic. 

80 to 90% of the training fails, the majority are ‘newbies’ and most, if any, additional knowledge they received would be outside business hours on their own time. Any of their "self-development", which is pushed relentlessly in the sales word, comes at a sacrifice to personal time outside of the job. So, if salespeople can learn additional skills needed for their job on their own time, yeah, like after nine at night, lunch hours, work breaks and weekends. Oh, don’t forget they have ‘windshield university’ time too. That's right, your technician is a newbie and there is a 20% chance they know what they're doing. You have to love those odds.

As a customer, I'm sure that you would feel confident letting a mechanic work on your automobile that has the same great success rates as salespersons who lack training, don’t use or respect the tools and have short-term experience due to the high turnover. 

Scenario #2, HVAC Technician 

Now, let's look at it from a personal comfort example. Let's apply this to your HVAC breaking down on a day when the temperature is going to reach 105 degrees. The technician you get is a newbie with the same great success rates as in the B2B sales world. They will not have a clue about what they're doing. Just like in sales, the assumption is that they’ll learn it in the field and on their personal and family time. “Fake it till you make it baby!”

Now, let's add a few best practices from the B2B sales world to "help" those technicians and mechanics from the above examples. They're both put on a high commission compensation with little to no base. Like the B2B sales world, “You gotta keep them hungry to keep them motivated now!”

I'm sure that wouldn’t make them recommend or do any additional services you didn't need. Add to the fact that it has been a tough quarter and they're going to have trouble paying their mortgage payment this month, that wouldn’t influence them to do the wrong thing now, would it???

Let’s throw in another best practice from sales management; people only perform at a high level through high compensation, reward. Your HVAC technician is close to getting an extra thousand dollars if they sell another $500 in services and/or parts in the next 5 days. Now, that wouldn’t influence them towards recommending any additional services that aren’t needed, would it?

Scenario #3, Family Attorney

You're going through a nasty divorce and there is a lot at stake, custody of children, substantial savings, real estate, and the list goes on. I'm sure you want your attorney representing you to be a newbie, with the same great training success rate your typical B2B salesperson gets and tools to help them, that they don’t use. I am sure you would survive the divorce proceedings and come out the other side the best you can following sales rock-solid keys to success.

Oh, let's add another best practice from the B2B sales world, stretch goals. This attorney needs to finish your divorce out; unbeknownst to you, in the next 7 days or they miss their goal. If they miss their goal, they will be put on a performance improvement plan (PIP). And if this is their second time then they’ll face potentially being fired! “Shoot for the stars and if you hit the moon you’ll be doing great!”

Would you recommend the attorney from this scenario above to your best friend or your worst enemy? 

In all of the above scenarios, if you have a problem in the future, with the high turnover rate, don’t think you’ll get the same person if you were to ever have a problem. The person that made all the promises to get you sold/closed before the end of the month.  You’ll have to re-explain ‘everything’ to a new person and hope all the original promises are honored. Now, that wouldn’t be a problem, would it? (And, well you know by now, more sarcasm.)

I think we should apply your typical sales manager's keys to success, poor training, horrendous turnover, high-pressure goals to doctors, firemen, police officers, military ... etc. The B2B sales world does have a fantastic scorecard now, don’t they???

Many of the above problems in B2B sales have just continued for over a decade and continued to get worse of a problem. Most companies and their sales management seem to have what I call a severe case of DDD. Which the first to D’s stands for, “Delusional and in Denial” and after all these years of ignoring these major problems, the third D, just plain “Dumb”. 

“Common sense isn’t a common practice for many of today’s sales managers.” – Scott Marker

It’s not rocket science folks! 

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What has been your experience with B2B sales turnover, training, high commissions, and stretch goals?

For those ‘sales leaders’ that are trying to do things right, not following the status quo, we would love to hear what you’re doing differently and your successes. 

Please leave your comments below.

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Would you like to be the first to get a copy of my next book on how to drastically improve your B2B sales and other cool offers? If so, just click the link below and provide an email to get on my list to get notified.

https://mailchi.mp/6c84392d9007/the-screwed-up-world-of-b2b-sales-and-how-to-fix-it-in-only-135-pages

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Stay tuned for my next installment of “It’s not rocket science folks! B2B sales have been ‘screwed up’ for years...’’ Part 8, which will soon be followed by my second book on B2B sales titled, “The ‘Screwed’ Up World of B2B Sales & How to Fix It… In Only 135 Pages”. 

The problems are numerous and have been repeated for years to this day. Yes! I will be offering solutions in my book but only if you can handle the truth... Be ready for a paradigm shift!

If you liked this article you might enjoy reading others. Here is my latest article in the series, which was an update to an earlier article in my series.

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Scott Marker is a 30-year B2B sales thought leader which he is still working in the sales world to this day. Successful speaker and author of “Let’s Get It On! ‘Real’istic Strategies for Winning the Sales Game” and he is researching and writing his second book on B2B sales, “The ‘Screwed Up’ World of B2B Sales and How to Fix it in Only 135 pages”. 

He joined the Boise State University faculty following six years as a guest speaker of sales and sales management classes. Adjunct Professor facilitating Marketing 321, marketing/sales course. 

He is the owner of a successful once-a-month professional networking franchise Network In Action International.