Think about the cost of a bad sales hire in your organization by completing the table below.
You will need to calculate costs using your best estimate. Consult with others in your organization for help as needed.
For example, human resources may have numbers on costs for recruiting, hiring and training a new salesperson. Assume that the ineffective salesperson remains in the territory for three months.
While the poor sales performer is in the job for three months:
Lost sales revenue in territory (calculate what the territory should be producing vs. what poor performer actually produces):
$
Value of manager time, dealing with poor performer’s issues:
$
Cost of recruiting and hiring the poor performer:
$
Cost of training and coaching the poor salesperson:
$
Cost of low morale on team, caused by poor hire (think about burnout, turnover, and negative attitudes):
$
Value of human resource’s time facilitating the termination:
$
Other:
$
Subtotal:
$
When the poor performer leaves the organization:
Revenue drops in other territories while salespeople are covering the open territory:
$
Time and dollars spent repairing customer relationships or making good on promises made by the salesperson:
$
Dissatisfied customers who left for a competitor (lost accounts):
$
Other:
$
Subtotal:
Total estimated cost of a bad sales hire:
Phyllis Roteman’s experience includes over 24 years as an HRD consulting and training practitioner and salesperson. She founded The Loyalty Group (TLG) in 1995 after working as a consultant for Development Dimensions International (DDI). She has developed and delivered learning solutions in the areas of sales, performance management, coaching, selection, and customer service. Her clients have included top companies in a variety of industries, including Tropicana/PepsiCo, Zenith National Insurance, Florida Power and Light, Dreyer’s Grand Ice Cream, Knight Ridder, Toyota Motor Sales U.S.A., Celebrity Cruise Lines, Alltel, Shaw Industries, Inc. and Wasatch Advisors. She has been published or quoted in leading industry publications including Selling Power, HR Magazine, SHRM Consultant’s Forum and HR Executive. She holds an MBA from the University of Miami, where she was an adjunct professor in the business school, and is a certified job analyst.
The Loyalty Group (TLG) helps companies sharpen their competitive edge by maximizing the potential of human capital in organizations. It helps companies build what customers value most and sell solutions that address their changing needs.
TLG’s Sales in Action solutions challenge salespeople and their managers to find untapped budgets, dig for new opportunities and sell smarter. For more information call 818-981-8806, or visit www.theloyaltygroup.com.
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Expert Access FeedThu, 02 Nov 2006 13:56:57 ESTThu, 02 Nov 2006 13:56:57 EST
Nowhere to Run. Nowhere to Hide. Nowhere to Even Stand Still.
Each day, every company steps onto an increasingly competitive global playing field. Their success and survival depend on the continual improvement of processes, products, productivity and personnel.
Question: My manufacturing company plans to expand into China to take advantage of the growing economy there. Do you have any advice on how to be successful there?
Answered by:Bob Fitzgerald, Director of China Operations, Cincom Systems
Cincom hopes that you find its e-mail communications informative and helpful. However, Cincom respects your wishes for either receiving or not receiving e-mail communications from us. If you would like to be removed from Cincom communication distribution lists, please state your wishes by contacting us via the following ways: Submit your request to www.cincom.com/unsubscribe, call us at 1-800-2CINCOM (US) or 1-513-612-2769 (International), or contact Marketing Do-Not-Contact at Cincom Systems, Inc., 55 Merchant Street, Cincinnati, Ohio USA 45246.
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