Eric Schmidt, Chairman and former CEO of Google often says, “revenue solves all known problems.” Most companies fall in line with this philosophy of being oriented around revenue and growth. More revenue or the acceleration of growth attracts investors, leads to better valuations, and positively impacts stock price. A great sales onboarding process in combination with the right people and technology can be a key element in driving more revenue and a competitive differentiator in the war for sales talent.
How can sales onboarding help with revenue and growth? The idea is simple, you want more sales reps that you can classify as “A players,” and you want to hold on to them for as long as you can. According to the Sales Benchmark Index, “A players” generate 5x more revenue than “B players,” and 10x more than “C players.”
When a new sales representative walks in the door, you have three goals: get them to ramp up to full productivity quickly, cultivate the highest productivity possible through training and coaching, and retain your top performers. This ongoing effort will result in a company performance attainment curve shifting positively to the right.
You’re probably thinking, sounds great, we onboard sales reps today. So, what’s the problem?
The problem lies in that most companies either have no formalized onboarding process or are stuck in a rut of what I call, “common practices.” Common practices arise from the path of least resistance based on what is known, and what is easy. They aren’t necessarily bad – companies are putting some wood behind the arrow, they just aren’t best practices, and as such, are impacting your company’s ability to scale and drive revenue growth faster than the competition.
Before your new sales rep even steps foot in the door, they’re already costing you money in recruiting and hiring costs.
Sales Onboarding Best Practices for Your New Hires
Common Practice: No metrics around onboarding. Most companies don’t have real numbers around the sales rep cost or sales rep ROI. These companies often track rep productivity in terms of sales and attainment-to-goal. Often, companies stack rank their reps to get a feel for who their A, B, and C players are.
Best Practice: Know your numbers. In addition to the common practices metrics there are several other questions you should be asking:
- What does it cost to hire and on-board a sales rep?
- What is your average ramp to productivity time?
- What is the average time to break even for a sales rep.
- What is the average tenure of your sales representatives?
- What is the ROI at the rep level – investment vs. return.
- What training and certifications does each rep have?
Once you have the metrics in place, the goal is improvement and then external benchmarking. After some time, start looking at trends.
- Can you identify A, B, and C players early and take appropriate informed action?
- What training and coaching has the most positive impact?
- What should the cadence of training and coaching be?
Common Practice: Wait to start training until the new sales reps show up for their first day of work. Let them get orientated with HR and IT before training begins.
Best Practice: Assign pre-work right after job acceptance. The new sales rep should walk in the door with a baseline of product and sales methodology, and be able to pitch the company on day one.
At a recent trade-show, I had an inside sales rep working the booth and representing the company on his first day. Prior to that moment, he watched twenty of his peers give their corporate pitch via video. This new rep practiced his own, recorded his own video pitch, and received peer feedback on where he could improve.
The result? He was comfortable pitching prospects and ended up doing a fantastic job. Pre-work sets the tone and culture of your sales organization. We’ve had new hires balk or fail to complete this pre-work, and both sides come to realize that working with us isn’t a good fit. Moral of the story? The “A players” will embrace it, and the future “C players” will resent it.
On day 1 you start to incur additional costs – salary, benefits, commissions, infrastructure, and training. According to variety of sources1, 2 and depending on industry it will take between 4 – 7 months for a rep to get to full productivity. Furthermore, it can take two to three times as long as that (about 6- 18 months) to break even on your investment. Combine this with recent statistics that show depending or role and experience the average tenure of a sales rep to be between 14 – 30 months3,4,5, and you can conclude that the faster you can ramp a rep to full productivity, the better.
3. Once vs. On-going
Common Practice: Onboarding is one time event. Hold a sales boot camp. Hit them with a fire hose of information for 2-3 days, then put them on the phones, and send them to the field.
Best Practice: Onboarding is an on-going process. A rep is fully on-boarded once they hit full productivity. A sales boot camp is a great kick start to onboarding, only if it’s well-structured and executed.
The key difference here is that boot camp is a part of the process, not the whole process. Recently, I had a sales rep send me an email saying they didn’t understand how to sell to a particular persona. Looking at their training history I could see they had, indeed, been through the persona class. The reality is people forget. Sales representatives need consistent and customized coaching throughout the course of their sales career.
The learning community has long known that content not reinforced is forgotten. The classic forgetting curve put together by Herman Ebbinghaus showed that how we forget is predictable, and in a single day up to 66 percent of learnings from new hire training, sales kickoff meetings, product trainings and sales methodology is lost. Learning must be repeated often until mastery is achieved, and then kept up to keep skills and knowledge sharp.
Common Practice: Reps have been given the knowledge and materials, so our work is done.
Best Practice: Mastery of skills and knowledge is an iterative process. For example:
- Watch multiple examples of “A players” approach common objections and the latest competitive landmines.
- Practice and record a video of yourself overcoming objections.
- Get feedback from your manager and peers.
- Rinse and repeat to naturally overcome objections.
Common Practice: Onboarding is done in a class room setting, with lots of handouts and materials.
Best Practice: Onboarding is done using a combination of learning formats: classroom setting, e-learning, self-guided classes. It’s important to match the topic with the format.
For example, classrooms are good for general baseline knowledge and Socratic dialogue. A one-page electronic format document is good to cover features and functionality of a product. Videos are good to demonstrate sales conversations like elevator pitch, qualification, discovery, and negotiation.
6. Delivery Mechanism
Common Practice: Most companies onboarding processes are done in person or over the computer.
Best Practice: Leading companies are shifting their onboarding process to be mobile-optimized or a mobile-only strategy. How people are learning and what tools they’re using to do so has shifted. Recent studies show that the attention span lasts around eight seconds – that’s less than a goldfish. At the same time, we touch our phones an average of 2,617 times per day. Over the last few years, online video learning exploded.
For years, I took my car into the dealership and they would ask me if I wanted the air filter or cabin filter changed. These were always pricey items which I assumed had a lot of margin built in, but I wasn’t raised as a car guy. My grandfather never changed his own oil, or spark plugs, and never showed me how. One day I decided to give YouTube a try. Voila!
If you want to learn how to build a rocket, or in my case learn the very basics of car maintenance, give YouTube a try first. There are now more than 135 million “how-to” videos on YouTube and 91% of smartphone owners use their device when completing a task. Mobile is ubiquitous, so giving your reps the tools and content when and where they need it is important to your onboarding success.
If you can replace one or more of these common practices for your reps, your sales organization will see an immediate positive shift. Reps will ramp up to full productivity faster, achieve a higher peak of productivity, and stay longer. Overall your ROI per sales representative will increase forging an easier path to scale and grow. Sales onboarding is a foundational layer for the ultimate success of your sales team and an imperative in today’s hyper-competitive market place. References:
- “Average ramp time jumped sharply from 4.2 months (2010) to 5.3 months (2015).” Bridge Group 2015 SaaS Inside Sales Survey Report Survey of 342 B2B SaaS Companies
- 60.7% of the study participants reported a ramp-up time of seven months or more. (CSO Insights)
- “Virtually unchanged since 2010, average rep tenure sits at 5 years.”Bridge Group 2015 SaaS Inside Sales Survey Report Survey of 342 B2B SaaS Companies
- “Average tenure has fallen to an all-time low of 1.4 years (For SDRs).” Bridge Group 2016 Sales Development Metrics and Compensation Benchmark Report
- The average sales rep’s tenure is less than 2 years. (Sales Readiness Group)
- 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)