“Can you imagine hiring a [software] engineer who couldn’t code or contribute anything to development for [the first] six months?” asks Christopher Faust, CMO of sales-execution software provider Qvidian.
The answer is probably “Absolutely not,” unless your approach to hiring is highly unorthodox.
And yet, when hiring sales team members, organizations routinely expect that their new hires will contribute little or nothing to the company for their first few months on the job.
“Sales is one of the only jobs where you hire somebody with the expectation that you’ll lose money the first six months,” Faust says.
Faust attributes this to lengthy ramp-up times for new sales reps, which have been the norm for decades, he says. According to Qvidian’s latest annual Sales Execution Trends Report, “it takes a new sales rep an average of 7-9 months to be fully productive.” Moreover, 71 percent of respondents to Qvidian’s survey say it takes sales reps at their organizations longer than six months to become productive.
While unconscionably long ramp-up times have plagued sales forces for years, Faust says this issue really rose to the top of sales leaders’ minds this year: 36 percent of respondents in Qvidian’s survey cited long ramp-up times as a leading reason for their organizations’ failures to reach sales quotas.
“It’s classic: the root of the problem of sales ramp-up is people think of it as onboarding,” Faust says. “But onboarding is just the first step of ramp-up. I think most organizations continue to struggle there because they look at it as a training exercise or an onboarding, HR exercise. they’re not thinking about it from the perspective of time-to-revenue.”
Disconnected Systems Slow Down Ramp-Up Times
“[Sales leaders] know [ramp-up times] are a problem, but they keep doing the same things,” Faust says.
According to Faust, the problem partially results from the “firehose effect” that new hires in all departments — not just sales — face when going through the onboarding process. This “firehose effect” occurs when employees receive data faster than they can process it, which happens whenever companies treat onboarding as more of an infodump than a strategic training program.
Faust jokingly describes such “firehose training” this way: “Here’s our product, here’s our features, here’s out benefits, here’s our value proposition — go get ‘em!”
This rapid-fire delivery leaves new hires disoriented, rather than informed. Thus, they have to essentially retrain themselves. It’s no wonder, then, that it takes sales reps months to become fully productive.
Faust says that disconnected systems within an organization also contribute heavily to lengthy ramp-up times. In fact, Qvidian found that “80 percent of companies that rate ramping up new reps as very important to reaching quota attainment report that their systems are not connected or streamlined.” When an organization’s sales- and training-related systems are not streamlined efficiently, it leads to a “disorganized flow of content and resources,” the Sales Execution Trends Report reads.
“Imagine you’re a new sales rep,” Faust explains. “You just started, and you have to go to this place to search for something, you have to go to this place to search for something else, and you have to go to this other system [to search for another thing].”
The keyword, Faust says, is “search”: not only are new sales reps running around frantically to find the information they need, but the information isn’t even readily available. New sales reps not only have to figure out which system they need for which purpose, but they then need to dig through that system to find the information they’re seeking.
Overall, it seems that sales reps aren’t receiving the sort of training and support they truly need — and that means companies are missing out on potentially massive profits. According to Faust’s calculations, if an organization with 100 sales reps can cut ramp-up time from nine months to seven-and-a-half months, that organization will see about $15 million in gained revenue, assuming the organization has sales quotas of roughly $2 million per employee. For a smaller organization, with 10 sales reps, the gained revenue is around $1.5 million; for companies with 1000 reps, it’s about $150 million.
It’s Not HR’s Fault — But the Department Can Still Help
As mentioned above, sales leaders are starting to recognize the impact slow ramp-up times have on their businesses, but this is only the first step toward a solution.
“It’s not just a matter of recognizing it, but instituting change,” Faust says. “The fundamental thing that has to change for organizations … is to think about how they onboard and ramp up [their] sales teams.”
According to Faust, most onboarding and ramp-up programs fail because they lack context: they don’t help new sales reps locate themselves in the company or situate themselves in the organization’s systems and processes. All new hires need this context.
“Whether you’ve been selling in this industry for 25 years [or you're a brand new sales person], this is a new company with a new solution,” Faust says. “Where’s the context to help that new sales rep ramp up faster?”
The integrations of systems like CRMs, coaching tools, and marketing collateral can help give new sales reps the context they need, thereby speeding up ramp-up times.
“If they’re not connected, then it’s making the rep less productive and taking them longer to ramp up to productivity,” Faust says of these systems.
Faust also notes that organizations should look to integrate not just technological systems, but activities as well.
“Can I integrate training, coaching, the day-to-day activities?” Faust asks. “Can I provide some context to intelligently guide sales people, to get them in deals faster — to get them into a deal that first month?”
While HR is not to blame for the current state of sales team ramp-up times, Faust says the department can certainly play an important role in streamlining systems, creating context, and improving onboarding and training processes.
“HR is not the culprit. I put it squarely on the sales leaders. They’re the ones that need to drive it and say, ‘This is what I need for my new sales team,’” Faust explains. But HR can contribute in a lot of ways: the department can help the sales department rethink onboarding and post-onboarding programs; HR can help create more streamlined and intuitive connections between various systems; and HR can also help to ensure that sales managers are trained to become better coaches and resources for new sales reps.
Faust also notes that salespeople lose 87 percent of what they learned in training in 30 days. HR can help mitigate this loss by working with sales managers to ensure that training is not limited to a one-time onboarding event.
“HR’s contribution is to not just onboard, but reinforce,” Faust says.