According to Salesforce.com, “It takes about 7 months and almost $30,000 to recruit and onboard a new salesperson — and 87 percent of that training is forgotten within weeks. With the right tools in place, an organization can decrease ramp-up time by at least 30-40 percent while increasing productivity and reducing mistakes.”
I did a quick ROI model on an even more conservative number that you can review here: You can Download the Ramped Up ROI Calculator here.
So. let’s take a $28,000,000 company with 46 sellers. Each seller would be held responsible for $608,695.65 a piece of that annual number or $50,724.64 a month if the quota were distributed evenly.
This $28,000,000 company has a somewhat complex sale so their sellers need 6 months ramp up time before they can be considered a full participant in the revenue production process. 6 months to learn the company, competitors, buyers, sales process, and positioning. 6 months to learn the difference between speculative practice from B players and best practice from A players. That same 6 months costs the company $304,347.83 in revenue production (6 X $50,724.)
If the onboarding process could be decreased by 25%, that would equal $76,086.96 (1.5 X $50.724) in recovered revenue per rep. Not too bad. And if the $28,000,000 company with 46 reps held to a 14% turnover margin, then the 6.4 new reps per year would yield $486,500 in recovered revenue as a whole.
The question remains, how can we decrease ramp up time from 6 months to 4.5 months? The answer is by focusing on the only thing that really matters – winning business, removing the noise of speculative practice, and provide best practices to new hires. By creating a gamified and comprehensive New Hire Checklist where the seller and the manager are both updated on the seller’s progression, you can also expect to cut down on ramp up time.
New sellers are sponges for information and any information they receive fills the knowledge gap. They don’t know if the loudest seller on the sales floor is a producer or on a plan. Are the sales leads really crap or does the seller not know how to close them? They can rattle off the latest elevator pitch, but do they know how that elevator pitch closed a deal last week? What part of these training videos is actually important to new buyers vs new users?
There are many more ROI expectations from sales onboarding that can be found on our ROI page. Here is a completion of experts outlining the costs to your organization on the back end, from SalesStaff.