Dear SaaStr: How do you reduce employee turnover in your sales teams?

Even today, in tougher times, sales rep turn-over is far higher than it used to be. You can’t completely stop it. But you can mitigate it.  The key is a great VP of Sales combined with a very fair comp plan — and a promotion path for those that want it.
  • First, you need a VP of Sales that great reps want to work for. If you cut corners here, it will be very hard to hire and especially retain great reps. You’ll often, in fact, see your top reps almost immediately leave if you’ve made a mishire at VP of Sales.
  • Second, you need a comp plan where the top reps make a lot of money. Not necessarily everyone. The “average” rep just needs to be paid market. But if the top 10% of reps make a lot of money — by closing a lot — everyone will see it’s possible. More on that here:

Your #1 Sales Rep Should Be Driving a Tesla Plaid Or Buying a New Home By Month 12. (And Not Buying a Panerai Watch.)

  • Third, successful reps making lots of money don’t want to leave a great boss unless they have to, or for a promotion. If you are doing very well as an Account Exec, have it dialed in, and have a great boss that has your back with a product you believe in — it doesn’t get much better. They tend to stay until the VP of Sales leaves, or some other big change comes. Or they want a promotion … which is the next point …

What Makes a Great VP of Sales and How to Hire One

  • Fourth, you have to promote as many sales reps as you can. Of course, you can’t promote everyone. And not all reps will want to be promoted. But many SDRs will want to be promoted to AE. And some AEs will want to be promoted to manager / Director. At least try. At least try to create a promotion path for the top third of the team. And at least try to “hire” most of your managers from internal promotions. A bit more on that here:

Time To Staff Up Your First Directors and Managers? Hire Half. And Promote Half.

Mediocre sales teams have very high turnover. But great ones don’t. Because the top sales reps know they have it good, with a great boss, great comp, and product they believe in. And that that’s relatively … rare.

(note: an updated SaaStr Classic post)

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