iStock_000026128854SmallThe other day I was reading an article in Selling Power about salesperson onboarding. Quoting heavily from Fusion Learning, the piece takes a training-focused view of the problem, though its observations about the importance of salesperson onboarding definitely resonated.

The article reminded me that we here at ZS also have something to say about salesperson onboarding. In fact, we’re long overdue for commentary on a topic that we started over the summer with posts on attracting producers and optimizing recruiting. So thanks to the prompt from my colleagues over at Fusion, I thought I’d share a few insights on the keys to onboarding salespeople.

The four Cs of onboarding

The Selling Power article focuses heavily on the skills, knowledge and activities required of new producers. Building these competencies—the first C of onboarding—is absolutely essential to new-hire success. But through our work and research, we’ve found that competencies alone don’t lead to long-term results. Three other Cs are just as essential to onboarding successful producers:

  • Customers: The initial assignment—an existing book of business or a territory for prospecting—has a significant impact on a salesperson’s early development. The territory significantly shapes a new producer’s earning opportunity, as well as his or her skill development and view of long-term potential. With one financial company, we found that about 15% of sales turnover in the first two years was explained simply by the salesperson’s starting territory assignment.
  • Connections: Sales professionals often operate independently, especially in many insurance and wealth management organizations. But companies are naive if they equate this independence in selling with general independence from the firm. In fact, we’ve found that connections—peer and manager relationships, the know-how to navigate internal systems and processes, and cultural and brand affiliations—have a meaningful impact on new-producer success, in addition to a more obvious connection to retention. This is one reason why at ZS we believe so strongly that first-line sales managers are key to success, and why we advocate for firms to deliberately plan producer networks during the onboarding process.
  • Cash flow: We could have easily used “compensation” here (it would have been a C word!), but when it comes to onboarding, we’ve found cash flow to be the most important aspect of pay. Cash flow is king for agents and advisors who operate on commission-based plans; but during the onboarding stage, it matters for producers in any role. We’ve done studies with wealth management and insurance firms to identify times when producers are most at risk for turnover. Often, these points occur early in a producer’s tenure at times when cash flow is light—for example, when performance guarantees or stipends run out, but before commission earnings have built up. Producers are often on a successful trajectory, but they may not feel that way if cash flows are weak.

Without being mindful of these four Cs, companies run the risk of losing valuable producers during the onboarding period. And since the onboarding period can last quite a long while—anywhere from three to 36 months, depending on the organization—any underdevelopment of producers can cost a significant amount in production, too.

The good news: Customers, connections, and cash flow are all within the company’s direct control. It can change these drivers without investing in a new training program, sales force automation system or anything of the like. And the decisions made now can pay off soon, in the form of lower turnover and better production during the onboarding stage.

Topics: sales, sales force effectiveness, Jason Brown, territory alignment, sales training, Recruiting, salespeople