Hire slow, fire fast.
It’s a well-known saying in the business world, but all too often sales managers don’t follow this sage advice.
Sales is a tough job, and sales leaders are sometimes hesitant to fire reps quickly if they’re not hitting sales goals consistently. However, at some point, you have to draw a line. But at what point is enough enough?
Luckily, you don’t have to guess. Harvard Business Review conducted a study of 786 sales professionals, asking a variety of questions to understand what top sales teams do differently from the rest. The data from this study is fascinating, and you should definitely read the entire report. However, one data point really sticks out:
78% of high-performing sales organizations fire a poor-performing sales rep within a year, compared to 63% of average-performing sales teams and 52% of underperforming sales organizations.
In other words, top sales teams fire poor-performing reps sooner. This data confirms the age-old wisdom that you should fire your worst reps quickly — specifically within a year. However, an underperforming rep shouldn’t be fired without taking specific steps first.
As a sales leader, you should use a combination of performance metrics, sales coaching, and accountability to drive improvements on your sales team and understand exactly when it’s time to fire your worst reps.
Track Sales Performance Metrics
Before you fire your lowest-performing reps, you first have to define what high performance is for your team. As a sales leader, it’s up to you to set appropriate sales goals and track important metrics through the sales funnel. If your goals are impossibly aggressive, for example, it’s not your rep’s fault if they can’t hit the number. You have to set the right sales goals, and then measure specific sales performance metrics over time. For example,
- How long is each rep’s sales cycle?
- What are their conversion rates through the sales funnel?
- What is their Average Sales Price?
Even if a sales rep missed their number for a few months, these KPIs can be a leading indicator of success down the road. For example, if a rep has improved their conversion rates through the sales funnel in the past few months, you should give them more time. While you want to fire underperforming sales reps fast, you have to be able to differentiate between reps that have the potential to improve, and those that don’t.
Hold Reps Accountable
Not every rep is going to hit their number every month. But if you have a sales rep that is consistently missing their quota, you have to be proactive and offer targeted sales coaching. Work with underperforming reps to identify their weaknesses and give them the tools they need to improve. However, if it’s been a few months and they still haven’t displayed growth in their performance metrics through the sales funnel, then you have a problem. You have to hold reps accountable to their number and the KPIs you’d like them to hit. You want to give reps a chance to improve, but if you don’t enforce these rules, the quality of your entire sales team will suffer. Be fair, be honest, and enforce the standards you’ve set for your team.
Fire The Bottom 10%
It sounds harsh, but unfortunately, sales can be a harsh business. If a few of your reps aren’t performing after a year and haven’t improved any of their conversion metrics, you need to fire those reps and move on. The resume waiting on your desk right now could be your next standout sales rep who is able to close massive deals that will carry your team. But you’ll never know if you allow the spot on your team to be taken up by an underperforming rep. Fire the bottom 10% of your sales team and work hard to recruit high-quality, ambitious, and smart sales reps to join your team.
No one enjoys firing their employees, but sometimes you have to do it for the good of the overall business. Remember that top sales teams in the business track the metrics, hold reps accountable, and — if that doesn’t work out– fire underperforming reps quickly.