It’s the end of the calendar year. For many of you, next year’s planning is in full swing: Sales Kickoff, Organizational Changes, Updated Strategies… so many important challenges to translate into 2016’s sales enablement programs. Can I stop you for one second, while you’re in the midst of all this planning, and ask you a question:

How many good sellers did you lose this year?

There’s always some turnover at the end of the year. Some of it is intentional, driven by poor performance. But sometimes, good sellers leave and it’s a bit of a surprise.

But, what if it’s a pattern? What if a group of similarly tenured sellers is leaving at the same time? Can you say for certain that you would be able to identify that this is happening? And if you could, would you know both what the issue is and how to fix it?

The purpose of this blog is to walk you through how to uncover any patterns in seller churn. And, hopefully, by identifying if there is a pattern, you can take action with your team to address it.

How to Leverage Class-based Turnover Rates to Determine Your 2016 Sales Enablement Priorities

In my blog “Bubbleball, (Analytics for Seller Onboarding)”, I introduced the importance of evaluating your seller’s performance based on “class”. In that blog, my analysis illustrates that comparing new and tenured sellers via a “stack ranking” skews your view of seller performance. Each class of seller (“class”, by the way can be any period of time appropriate to how often you onboard a new group of reps) should be judged as its own group. Top Performers in that group are your top performers, regardless of how they compare to your tenured reps.

In this blog, I want to take the concept of class a step further. I intend to show you a step-by-step approach for using an analysis of “Churn Rates by Class” to identify sales enablement issues and potential priorities.

Step #1 – Translate Hire Date to Class

To start, I suggest taking your list of sellers and their start date and group them by “Class” in an Excel sheet. (You can use an excel function, like the “=year(cell)”, calculation if you don’t want to do it manually). And feel free to segment them by whatever time period you think is appropriate (by quarter, by first half / second half of the year, by hire class, etc.).

I created a fictional example below to show you two approaches. “Class Category (Manual)” is simply the category type that I used in my Bubbleball blog. The “Year Calculation” column is an example of how the “Year(cell)” function works in Excel. 

Step #2 – Total the number of sellers by class

The new hires are the “Class of 2015″. Your second year reps are the “Class of 2014″, etc.

Step #3 – Insert the class totals for the previous year

In order to try to help you identify the “churn”, insert the previous year’s numbers above the current year.

I color-coded each class, so you can see how in last year’s rookie class (Class of 2014), there were 30 new hires. But, by the end of that year, one of those rookies left.

Step #4 – Calculate the Churn Amount

From the “Class of 2014″, you can see that they lost 1 seller. The “Class of 2013″ lost 5 and so on.

Step #5 – Calculate the Churn Rate (Percent) by Class

Now if we divide the churn amount from the previous year’s class size, we can get to a churn rate by class:

Maybe a better way to look at this is via a bar chart:

Summary

There are three key points here:

1. Churn Rates across a company do NOT show you if you have issues within a particular group of sellers. In this example, the overall churn rate is 16%, which is considered “average”. At 16%, few companies would believe that they have a “churn” issue.
2. But, when Class is taken into account, you can see that this company is losing a high percentage of its most senior salespeople. And, the question is “why”?
3. One final point, this pattern (if consistent across years) could be affecting your long-term revenue. To find out how, please see my next blog titled “How Patterns of Seller Churn Affect Revenue” (coming soon).

By reviewing turnover by “class”, you can look at seller churn in a more detailed, and actionable, way. It should pop out almost immediately whether your company or your sales enablement team needs to increase its support for a specific group of sellers. Maybe new hires aren’t succeeding, maybe emerging veterans are frustrated, maybe there’s too much confusion around new products for senior sellers to be successful. By using this method, you will be able to see IF you have an issue you weren’t accounting for, and hopefully address it in next year’s plan.

Chris Patton is a Consulting Practice Lead for SAVO. He specializes in helping clients define their Go-To-Sale process and their Onboarding process and then implements automation technology that improves them. You can connect with Chris at: https://www.linkedin.com/in/citypatton.

SAVO and SiriusDecisions produced a Research Study to continue uncovering the “reality” behind the challenges and successes of seller onboarding and ramping. We’re looking for leaders in sales, enablement, and training to take 10 minutes to complete the survey – respondents will be first in line to receive study findings that will be published into a report in early 2016.

Click Here to take the survey: SAVO / SiriusDecisions 2016 Onboarding Study.