Your company’s “seasonality” has a significant impact on new salespeople. It affects their onboarding development and ultimately their revenue performance. Find out how. Come check out my presentation on Sales Onboarding at the 2015 SAVO Sales Enablement Summit on Wednesday, June 3 at 1 p.m. CT.

How is company “seasonality” affecting your new sales hire’s development?

Have you ever known a child who so badly wanted to be good at a sport or activity but they just never got over the hump of being successful, and so they quit? But, their lack of success wasn’t due to lack of effort or commitment, it’s because they just weren’t developing physically at the same rate as their child-peers?

Unfortunately for many new sellers, we put them in a similar position, where their effort and commitment are clear, but they just don’t develop at the same pace as some of their peers. And, so, either through managerial intervention or personal frustration, they leave the company.

And there can be a direct, long-term impact on your company’s revenue performance, because new hires typically do not generate revenue at the same pace as your average tenured seller. (Below is an example from one client’s data).

In my previous blog, The “Relative Engagement Effect” (Part 1), I introduced the series of “seasonal” activities that support salespeople through the course of a fiscal year. I stated that I believe that we affect our new sales hires’ first two or three years of revenue performance based on WHEN they start with our company. In fact, I believe that the dominant percentage of seller churn is directly linked to the timing of their initial hiring.

In this blog, I want to highlight HOW these seasonal activities impact the learning process of each “kind” of new hire (“Early Year” and “Second Half”). And I will share some analysis that you can conduct on your own numbers to see if this issue is affecting your company as well.

Through the New Seller’s Eyes

The “Early Year (EY)” New Hire

At the beginning of the year, the “Early Year” New Hire who is hired two days after your fiscal start has ALL of the benefits of a learning process that  COINCIDES beneficially with the series of activities designed to help the reps create, manage and close leads.

Franchise Planning: At the beginning of the year, the Early Year New Hire is learning from more experienced people on how to attack their territory. They are listening to questions from their manager and the answers from tenured salespeople. They are mentally processing how to connect “solution value” to general “business challenges”.

Leads: Once leads start coming in, the EY New Hire may not even be ready for them, because he or she hasn’t had the full extent of training. But they are introduced to prospects anyway. Win, Lose or Flub Up, that new hire has the best type of case study possible – a real one. And not just one! The EY new hire will receive multiple leads and opportunities on which to “cut their teeth”.

Prospect Nurturing: Whether it’s through a webinar with an analyst or a seminar with a customer, the Early Year New Hire combines three thought processes: their onboarding training, the webinar’s content, and their own prospect’s requirements. By thinking through how the webinar content translates to their prospect’s specific environment, they are learning exactly what we need them to learn: how our value affects our customer’s business challenges.

Opportunity Mgmt: During each of their opportunities, the Early Year Rep engages team members, who help articulate to their prospect the potential value on their rep’s behalf. And the EY New Hire hears this multiple times through multiple discovery sessions with multiple prospects. Their learning curve is going through the roof.

Competitive Positioning: Across their multiple opportunities, the Early Year New Hire is bound to face multiple competitors (sometimes even in the same account). Thinking through the challenges they present and adapting your positioning with them in mind is another important learning process.

Executive Alignment: As they near the short list decision point, Early Year Reps can actively arrange executive-to-executive meetings, either with their own leadership team or with customer references. They listen to these conversations, and take in the dialogue around need, value, and “real” close requirements. They gain insight from their manager and senior reps about how to leverage the right internal resources, and they learn the real “ins and outs” of proposals and contracts. AND THEN they do their best to execute on them.

Political Navigation: By the end of their sales cycles, and with their multiple opportunities, the EY New Hire becomes engaged in the most critical challenge to their success which is also almost impossible to “teach”: Political Navigation. Guiding your champion to re-communicate both your business case and your value proposition in order to enable them to convince their senior leaders to approve the purchase is a critical skill. And it drives the rep to the heart of explaining “why now”.

In summary, The EY Rep has the opportunity to “practice” in real time with multiple opportunities. If they screw up, they have another opportunity to try something different. When their manager gives them an account strategy idea, they immediately think about how or if they should use that with their other opportunities. And “Win, Lose or Flub Up”, there is NO better training for a seller than managing a real opportunity from start to finish. When they have multiple opportunities, their learning is exponentially better.

The “Second Half (SH)” New Hire

The poor seller hired in the second half of the year misses almost ALL of this.

Lack of Lead Mgmt: They have FEW (if any) leads. Any lead found earlier in the year that just happened to reside in their territory has long been handed to someone else. IF a lead does pop up, they still missed out on the lead campaign planning exercise and working with the inside sales team to prepare for it.

Lack of Field Marketing Campaigns: If they do develop a prospecting plan with their inside sales rep, they still missed out on most (if not all) of the field marketing activities that the inside rep could have leveraged earlier in the year. And, as a result, the SH New Hire will miss out on qualifying multiple leads into a legitimate pipeline. Typically, they chase every deal because they don’t have very many, and they desperately want access to some kind of experiential opportunity.

{Research Point: Do you have reps that chase EVERY lead? Are these reps desperate to show sales activity even in low odds accounts? Can you match them up with WHEN they were hired? Is it possible that Early Year reps are better at qualifying out bad deals, because they started with multiple leads to pursue early in their training process? And is it possible, that Second Half New Hires have “learned”  the unwanted “sales behavior” to cling to every unqualified lead in order to appear as though they have legitimate sales activities?}

Lack of Executive Alignment: By the middle of the year, because the planning for all of the mid-year executive alignment activities are generally in full swing by the time they get there, (but the new hire doesn’t have any opportunities to think about or learn from), the Second Half New Hires are remote from all of those interactions. They are “sitting on the sideline” with no context or real use case to evolve their training information into something tangible.

Lack of Strategic Deal Reviews: As the end of year close activities swing into high gear, the SH New Hire is as isolated as a person can be. They might be invited to listen to another rep’s prospect-to-customer reference meetings. But, they are still missing nuance and context, because they have nothing else to compare it too. They don’t have an executive meeting to arrange (unless they’re lucky), because all the BIG deals in their patch were given away earlier in the year. So, they don’t learn about the potentially creative ways to fashion proposals or align the two businesses.

After 6 months, the amount of learning that the SH Rep has actually received is NOMINAL, because they haven’t had the benefit of many interactions with customers.

The Relative Engagement Effect

The gap between EY New Hire and SH New Hire can be HUGE. The average 90-day onboarding process is only one step in a new sellers overall development, and, typically, that process is focused on product content and operational systems. It rarely covers the “physical” and “verbal” interactions between prospect and new hire.

And, in reality, the seller’s life includes so much coordination of resources, bringing the right people in at the right time, and the conversations, which are led by these resources, are focused on the concept of “business value”. In other words, the very exercise of these discussions enhances the new hire’s verbal and mental processing of “how” their solutions will resolve specific business issues.

The more engaged a seller is in these early conversations with real-world prospects, the more they learn and absorb the “reality” of how to sell. The result of all of these interactions is an accelerated learning curve for the Early Year New Hire.

Year 2 Issue – “Equal Quotas & Equal Expectations”

The Biggest issue for Second Half New Hires is that the Sales Leadership team has an expectation that onboarding only takes 60-90 days. Since they started in Months 7 or 8 (July or August in a calendar year), and the beginning of the next fiscal year is actually 120 to 180 days later, there’s no reason to view these new hires as “unprepared” to manage their territory.  So, there isn’t even the slightest belief that the Second Half New Hires couldn’t meet the same quota level and achieve the same performance level as the Early Year New Hires.

But, the Second Half New Hires have NOT experienced ANY of the planning activities. And, because their “actual” training level is significantly lower than the EY Reps, they will ask the same questions that the EY Reps will have asked the year before. In addition, the SH Reps will receive leads and mess them up during qualification. They will struggle to verbalize the connection between business challenge and value messaging. And, when compared to their “peer”, the EY Rep, everyone will look at them like “why don’t you get this?”

And the pressure mounts, especially towards the end of the next year. The Second Half Seller’s manager’s expectations increase significantly. The perception that they should understand things they went through at the end of the previous year should NOW be kicking in… but they didn’t have an OPPORTUNITY to shepherd through the executive alignment activities. They’re verbalizing answers to objections poorly, they’re missing information in their Strategic Deal Reviews, and they’re missing chances to be creative during the negotiation process, because this is the FIRST TIME they’re doing it.

Again, even if the Second Half rep had a couple opportunities to manage in their first 6 months, the likelihood that the Early Year Seller had many more means the EY Rep has more experience, and, because of this, things are getting easier.

How to tell if you have this problem

{Note: the following charts are based on data from one client from over 5 years ago. There are numerous economic and market factors affecting these numbers, and the data set is really too small to “prove” anything. So, to be clear, it is NOT my intention to use these charts as “proof points”. They are intended as visualization aids only to help you conduct your own investigation.} 

Chart #1: Stacked Bar Visualization

One way to tell if you have this problem is to create a “stacked bar chart” based on “hire month”. The timing of this chart should be the first “full” fiscal year for each of the new hires. (Note: YOUR first month should be whenever your fiscal year begins. This example assumes a January calendar year start.)

To be clear, for new hires in Oct/Nov/Dec, this is really their first full year. For the Jan/Feb/Mar guys, this is practically their second year.

The key months to look at are Jan vs Jul. They have similar numbers of new hires and the average revenue is clearly displayed by each color. They both experienced the previous year’s fourth quarter rush, and they both enjoyed a year of ALL of the “seasonal” activities that I describe above, but the July folks are still not performing at the same level as their Early Year Peers.

Chart #2: Average Revenue across 2 Full Fiscal Years (after Onboarding)

In addition to the above first year view, it also makes sense to take the first “incomplete” year out of the equation. The below chart looks at the first full two years with the intent that both kinds of new hires (Early Year and Second Half) actively participate through two full “seasons”, including two fourth quarters.

What this chart shows is that after more than two full years on the job, the Early Year New Hires still show a performance edge over the sellers hired in the middle of the fiscal year.

Chart #3: Seller Churn

Another important analytic is to compare the churn rate by the two kinds of sellers. For this company, it was pretty clear:

In this case, 50% more sellers, who were hired in the second half of the year, departed than those that started in the first half of the year.

Part 2 Summary

When a new salesperson experiences success early, it means they are making money, meeting goals, receiving accolades, and building confidence. When you are doing “okay”, but just not “as well”, then there is pressure, insecurity, and frustration.

The resulting churn from the Second Half Sellers, even when their revenue performance isn’t at par with the Early Year ones, still has a significant impact on revenue. Their departure slows your company’s overall growth.

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

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