What Really Drives Sales Rep Retention?

Written by Steve Deist on Monday, 29 June 2015. Posted in Sales Compensation Blogs, Distribution, Manufacturing

We work with distributors to realign their sales and marketing investments with the real opportunities for growth. Getting it right at the top is critical to implementing a sustainable market-based sales model. This blog looks at the impact poor sales management can have on retaining your best sales reps.

The greatest challenge for most distributors is developing top sales talent. Distributors rightly see their sales reps as a vital cog in their customer relationships: the key to growth and profitability. And in today’s hyper-competitive environment, operational efficiency and high service levels are just the ante to play the game. Recognizing this, distributor senior executives get personally involved in hiring, and HR departments develop targeted recruiting and development programs.

Sales force retention is equally critical. Distributors recognize this, as well, investing large amounts of time and money in the development and funding of initiatives and incentive plans. But such plans issued from headquarters are generally not nearly as effective in the field as their creators would like. In the course of our sales force re-engineering projects, for example, we are often amazed by the level of delusion regarding corporate dictates. Headquarters staff will assure us that there is 100 percent compliance with a program that reps in the field have never even heard of!

After all, even compelling initiative and incentive programs will quietly die in the field unless branch and sales managers continuously reinforce them and tailor them to local conditions. So the ability of these programs to positively affect retention rates actually depends just as much on the managers implementing them than on the programs themselves.

Similarly, even well-paid reps can become dissatisfied if they don’t feel they are being recognized for their contributions. Managers are in the best position to give such vital reassurances; as a result, the quality of local management can be the biggest factor in a person’s decision to either stay with a company or to hit the road.

The old saying “people don’t quit their company, they quit their boss” is often true; good managers keep good talent happy. Because they are also critical to the successful implementation of corporate retention programs, sales and branch managers are one of the most critical retention tools in a company’s toolbox.

About the Author

Steve Deist

Steve Deist

Steve Deist has been a IRCG Partner for six years. He has over 20 years of experience working for hundreds of distributor, retail, manufacturer and private equity clients in dozens of lines of trade. He is a highly rated speaker, a permanent University of Industrial Distribution faculty member and a distribution company board director.

Steve has extensive knowledge of the distribution and supply chain space, with substantial experience in retail, construction and industrial channels. This experience includes:

  • Strategy, sales effectiveness, operations, supply chain, marketing and technology projects for over 100 organizations over the past 10 years. These clients have ranged in size from $5M family run businesses to Fortune 500 corporations.
  • Numerous marketing channel projects for top tier manufacturers which sell through dealers, distributors, retailers, etc.
  • Frequent industry speaking engagements for clients including, trade associations and manufacturers on a broad range of subjects. These engagements have included workshops, technical sessions for management level audiences, strategic sessions for executive level audiences and keynote speeches.
  • Due diligence and related projects for top tier private equity firms.

Steve is IRCG’s strategy guru, focused on helping companies achieve lasting competitive advantage. His hands-on approach enables him to apply leading edge concepts to the practical realities of daily business.

Prior to joining IRCG, he was director of consulting services at a major supply chain software vendor. Steve’s thought provoking articles appear frequently in premier industry publications such as Modern Distribution Management. Steve has authored three books published by NAW (The Five Fundamentals for the Wholesale Distribution Sales Manager, Value Creation Strategies for Wholesaler-Distributors and the upcoming What’s the Right Plan? Effective Sales Incentive Design for Wholesaler-Distributors).

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