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Performance management:
the dialogue 

How much of a revenue hit does a company take when a rep leaves?

2/26/2018

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Startling data on how much of a "revenue hit" companies take when a high performing Sales Exec (SE) leaves…  I crunched some numbers and calculated that a $3mm/year producer in a $100mm top-line company costs that company $2,540,000 in lost revenue in the following year after that rep leaves. (That's assuming the chair gets filled 90 days after s/he departs.) That figure DOESN'T include recruiter fees and Sales Manager (SM) time to keep fingers in the dike.  

But the bleeding continues.... the replacement rep will not immediately produce at levels of the departed rep, and therefore in year 2, the departed SE costs the company $1,278,000 in lost revenue. The two-year total of lost revenue to the company is $3,818,000. YIKES.  

Takeaway: me thinks SMs should improve how they communicate with the SEs who are pounding the pavement for us!  SEs are the lifeblood of the company and management needs to understand how to keep them tucked-in and motivated, which bring us to...
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    Welcome to this forum focusing on performance management issues.  As you know, I'm fiercely passionate about helping Sales Managers and Sales Executives be the best they can be in their career pursuits.  This is why I created STAR, and it's why I'll be posting about performance management issues.  


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