Your sales plan – and your personal success – is based on having your sales team fully staffed and 100% productive – but what if it isn’t? Let’s look at the cost of just one open territory.
Assume a $1.2m quota. You’d think that every month the position is unfilled it costs you $100,000, but that’s not telling the whole story. That simple math assumes that the new hire is immediately at 100% productivity from the day they start. A lovely thought, but not even close to reality. Sales training experts project that it takes a new rep 90 days in addition to your normal sales cycle to close new business. Add to that the time it takes to find the right person to hire.
Here’s a more likely scenario:
Source, engage, interview, hire and start: 90 days. Revenue lost: $300,000
Onboarding / assimilation: 90 days. Revenue lost: $300,000.
Ramp / sales cycle: 6 months. Revenue lost: $600,000
TOTAL REVENUE LOST: $1,200,000 – an entire year’s worth of quota!
Granted this is (hopefully) a worst-case scenario. Your new rep may land some small deals along the way. In the case of a backfill, there may be business left on the table, but the reality is – good sales execs don’t leave until they’ve closed out their big deals, and poor performers don’t really have much pipeline to leave behind.
Every single week that territory is open it costs you $25K in lost revenue. Ka-ching, ka-ching. It adds up fast.
You need a plan to fill your opens as quickly as possible. Here are four things you can do to save time and get your revenue back on target:
1. Scrap the old-style job descriptions. Create a Candidate Centered Value Proposition that clearly defines the kind of person who’s proven successful for your team. You want to attract a producer, not a seat-filler.
2. Hire a book of business. Look for someone with established relationships that can be leveraged going forward.
3. Go after them. Skip the “post and pray.” You don’t need dozens of iffy ad responses to weed through. You need a handful of qualified, hirable candidates with documented accomplishments who can hit the ground running.
4. Hire a professional headhunter to get the job done faster and more efficiently - and get your revenue back on track quickly.
Time is money, both your wasted time going through a long and unfulfilling hiring process and the time wasted when the open territory isn’t covered. And the ultimate waste of time – settling for the wrong person. #hiringsalesreps #saassales #lostrevenue #software sales #consultingsales
In a future article, we’ll address the many indirect costs of an open territory, including loss of management time, loss of momentum with key prospects, impact on team morale and PR challenges.