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How to Reduce Sales Turnover with Artificial Intelligence

Mar 19, 2021
4 min read
Revenue organizations aren’t strangers to sales turnover, but replacing a top sales rep can still be costly and time-consuming. Learn how you can predict sales rep turnover, take action sooner, and increase rep retention using artificial intelligence.

Departing sales reps can throw your forecasts into disarray and be a costly endeavor to replace. Over the past year, we reached out to over 2,000 organizations and discovered that salespeople are more likely to leave since the start of the pandemic, and the cost of replacing headcount is going up. Considering that, sales churn may be the biggest challenge managers face in 2021.

They say hindsight is 20/20, so accurately predicting the future should be even more valuable, right? Imagine being able to know when your sales reps are most likely to quit and being able to proactively respond so that you don't lose top talent and potential quota attainment. 

Sound like a wild fantasy? It’s not. Today’s leading companies are quickly realizing that the more insights they can gain around their sales team, the better their performance is and the better their ability to reach their revenue targets are. It’s why more than 80 percent of companies took some action to accelerate their digital transformation in the past year alone, according to Dell Technologies.

Combating Sales Turnover with Artificial Intelligence

Sales turnover is a fact of life for revenue organizations. It comes with the territory of a highly competitive role and fast-paced industry. And it doesn’t necessarily pause, even when a global pandemic hits. In 2020, a time of economic turbulence, voluntary turnover increased among companies. Xactly research shows that 58 percent of companies saw more sales reps leave voluntarily to other businesses.

For many, headcount itself didn’t change, but there still remains the challenge of replacing a rep when they unexpectedly leave. According to the Sales Management Association, the average new sales hire spends 10 weeks in training and is fully ramped after approximately 11.2 months. That’s where the importance of technology and artificial intelligence (AI) comes in. Salesforce reports that 57 percent of organizations use some form of AI to aid in their revenue-driving processes, and high-performing companies are 2.3 times more likely to use it.

And when it comes to rep turnover, AI can make a huge difference between being blindsided by a salesperson giving their two week’s notice and working with them sooner to avoid their departure all together. Here’s an example from our own experience at Xactly.

Xactly on Xactly: The Challenge of Unexpected Turnover

Sales leadership teams ask plenty of questions to help improve sales performance analysis and management, including: 

  • Do our teams have the resources they need for success? 
  • Is our compensation competitive enough to attract and retain the right reps? 
  • Are we assigning effective territories? 
  • How does quota attainment compare to the amount of incentives we’ve paid out?

No company is immune to the factors that afflict every revenue organization. At Xactly, our sales team has grown. We’ve lost some tenured reps, but we’ve also added many new reps to the team. We’ve promoted some of our best performers into management roles to continue motivating and retaining top talent.

We’ve also experienced the pains that accompany growth and have taken stock of all the successes and challenges that face both our company and our sales organization. We asked ourselves a key question: can we analyze our sales performance and use our data more effectively?

The answer is yes. We decided to “drink our own champagne” and enabled Xactly Insights, our data-driven sales performance application, for our team. Our goal was to give our leaders an in-depth look at Xactly’s sales performance across our entire organization, as well as at the team and individual rep level.

Gaining Vital Visibility with Xactly Insights

Xactly Insights is a powerful tool that provides leaders with a true understanding of their team’s performance—at the individual rep, team, organizational, and industry levels. The solution leverages more than 16 years of anonymized and aggregated pay and performance data to provide visibility that leaders need to make strategic decisions.

By enabling Insights for ourselves, we quickly discovered a handful of important trends and leading indicators for rep attrition and how tenure affects performance.

Potential Rep Attrition 

Insights’ Sales Rep Attrition Algorithm is built to help sales leaders identify reps at risk for turnover so leadership can take corrective action earlier. Within a few days of enabling Insights, the application instantly flagged some of our tops reps and indicated that they were at risk of attrition.

With this leading indicator, our sales leadership team was able to proactively address the situation, ultimately retaining these reps. Having a “heads up” on performance dips and issues helps sales leaders retain top talent and improve their sales planning, whether that means reassessing territories, adjusting training and career development, providing more enablement opportunities, or offering additional incentives.

The Performance “Sweet Spot”

Using Xactly Insights data, we confirmed that tenure plays a major role in how reps perform and how they will continue to add value to an organization over time. High-performing sales reps hit their performance “sweet spot” at three to five years with the company.

This means companies should emphasize cultivating top performers in years one to three. By identifying performance trends, sales leaders can realize a rep’s potential, even if full quota attainment isn’t achieved initially, and ultimately provide the resources needed for reps to grow and stay.

Harnessing the Power of Your Data

The impact of these valuable performance insights is a game-changer for sales and revenue leaders alike and shows how dashboards highlighting leading data-driven indicators are extremely helpful to run any organization effectively.

Xactly Insights is a tool that empowers leaders to drive a stronger organization and optimize team performance. It digs deeper into performance analytics, asks the questions we may not have thought to ask a year ago, and ultimately helps us be more competitive when trying to attract and retain top talent.

Learn more about the power of Xactly Insights and end-to-end SPM solutions in our white paper, Driving ROI: The Business Case for a Comprehensive Sales Performance Management (SPM) Solution.

  • Benchmarking
  • Sales Performance Management