High turnover rate of salespeople
Morale is a feeling or state of mind, a mental or emotional attitude that centers about one’s work. In a source by Nicole Fink (of Roberts Wesleyan College), the author found out a company’s employee morale is the key factor that drives an organization; it can drive the organization forward, or it could also create discontentment among employees. A company with employees with low morale has a direct effect on a company. With a low morale among the sales team, a company would make far lesser than it normally would because of the unwillingness to work.
And there could be potential problems that the salespeople will face. Not addressing to the problem of the salespeople’s low morale can have a serious impact on the company. According to sources from CCH Unscheduled Absence Survey found by Nicole Fink, it states that an average United States company make loses of more than $760,000 per year in terms of just payroll costs. It would cost more when we take into consideration low productivity and effects of poor working morale. Based on the statistics we’ve seen and from the sources found, we can safely deduce that employees’ low morale will not do any company any good.
Fixing the problem of the company’s salespeople’s low morale is important. It not only will prevent such unwanted losses, but also increase the sales and in turn, revenue for the company. One logical assumption of a series of potential problems due to low morale among the salespeople the loss in the sales they will make. Low morale is linked to lower work productivity, as mentioned above. Lower productivity would mean lesser sales for the salespeople as their productivity level drops. This is not good for both the company and the individuals involved.
This will lead to another problem: customer dissatisfaction. Customers normally feel more attached to the one salesperson that they can relate to, instead of revolving contacts with different salespeople. That is probably one of the reasons why the company’s customers are feeling disgruntled. The most probable reason being that they feel more attached to the one salesperson of the company. Another possibility is losing faith in the leadership. When sales run low and morale dropping, the salespeople might start to doubt whether the management is leading them in the right direction.
They will start to lose faith in the higher management, in turn lose faith in the company. When a company’s employees lose faith in the company, they will be more unwilling to work for it. To deal with the first problem of potential decreasing sales made by the salespeople, there are a number of ways to resolve the situations. Some of the ways are through team restructuring and through training. One way is to train the salespeople. Training not only will help improve each individual salesperson’s skills, it will also make them more productive.
Morale will rise because when a company sends its employees for trainings, it is a way of telling these employees that they are valuable to the company. That way, they will be more willing to work for the company. And training is the other way around if there is no mentors to guide the novice salespeople along the way. One effective way is the 8 steps of The Selling Process. Knowing about the Selling Process would make a sale more pleasant and efficient for both the customers and salespeople from the start to the end.
The 8 steps start from “prospecting”, which let the salespeople know how to identify potential customers. Then is “pre-approach” and “approach”, where the salespeople know more about and get attention. After “approach”, they’ll have to do “needs identification” where the salespeople find out about the needs of the customers. “Presentation” and “handling objections” are part and parcel of sales. Training in these areas will help improve them. Then “closing the sale” and “follow-up” is where the salespeople confirms customers’ buying decisions and ensure that they have a good experience with the company’s products.
Knowing and improving on The Selling Process will definitely make sales better and with the power of word-of-mouth, sales will increase in due time. With the process, the customers would have a better sales experience with the sales people and would not be discomforted. With lesser unhappy customers, the salespeople’s morale would rise, and they can better serve the customers. Besides training, another method is to break down the group of salespeople into smaller groups and have them target at the different groups of customers. With the decrease in the number of salespeople, the company has to manage them more appropriately.
Instead of all having the whole team of salespeople concentrating on maintaining relationships with the current group of customers, which will cause the customers to be disgruntled, the company can break down the salespeople into different groups. The company can split them into 3 groups: the inside salespeople, the field representatives, and the account managers. The group inside salespeople is in charge of selling the company’s products at its own facilities. It can be done through the telephone or through walk-in customers. The second group is the group of field representatives.
They represent the company to go out into the streets to make sales. They are positioned at strategic locations where the customers are. The last group is the group of people who will be the account managers. They are the group who has the responsibility of gaining sales from specific accounts. A company has both individual customers and big company clienteles. The previous two groups, the inside salespeople and the field representatives, mainly deal with individual customers who make small purchases. The company cannot ignore the big clienteles as well.
This group of account managers will be targeting at companies who will make bulk purchases from them. With the company’s team of salespeople divided up, they will be able to reach out to more customers. Productivity can be increased in this way, and sales will increase. Furthermore, the customers would not be disgruntled due to the revolving contacts by different salespeople from the company. Compensation plans are incentives that are offered to the employees other than the basic salary or wages. This may include insurance, leaves, retirement programs, and other employee benefits.
Compensation plans are one of the things that draw potential employees to work in the company. Different companies have different compensation plans. Different plans attract different groups of employees because the wants and needs of people are different. A company’s compensation plans must be attractive enough to not just retain, but to also attract, potential employees. More attractive compensation plans from other companies could be one of the reasons to the high turnover rate in the number of salespeople in the company.
Because every company offers different compensation plans, and different people have different needs, it could be that these salespeople are attracted by other companies’ compensation plans and therefore decided to go for it. More salespeople leaving the company resulted in the higher turnover rate. But companies have to plan properly when changing compensation plans. The company has to make a sales compensation plan that works for the company and within the ability of the company, not according to what the industry norm is. The company has to take into consideration its profitability and what motivates the sales people.
One direct way to decrease the climbing turnover rate would be to reform the company’s compensation plans. As mentioned, one reason the salespeople are leaving could be due to more attractive compensation plans elsewhere. It would mean the company’s plans are probably not enough to retain them. Changing the plans would be the most direct way of retaining the employees. The company can target at changes to the company’s compensation plans. Because compensation plans include a number of benefits like leaves and incentives, the company would have more than just the basic salary of the salespeople to make changes to.