18 Nov 2019
The introduction to the article was prepared by PRW Consulting, which is represented by Jacek Wójcik. There are two crucial facts in the introduction:
How much does it cost to lose an employee? How much does it cost to effectively replace a lost employee? Every manager in every organization will meet with this question.
The departure of an employee is a natural moment in the activities of any organization. Let’s add that a very expensive moment. Let’s count how much it costs. To simplify the calculation, let us assume that the employee is paid gross in the amount of the national average in Poland (ca. 5 000 PLN, ie. the cost of employer is 6 000 PLN), so the total cost of a standard notice period is 18 000 PLN. Why is this a cost if the employee can still perform their duties? Maybe, but will he perform them conscientiously and with full commitment when thoughts already is at a new employer?
So how much does it cost to effectively replace an outgoing employee? With the “effective replacement” in mind, we mean an employee who will achieve comparable work performance to an outgoing employee. Let’s count it.
The average cost of recruitment in Poland by recruitment agencies is twice the employee’s gross monthly salary. So in our example: PLN 10,000.
During the recruitment period, other employees must take over the duties of the employee who is leaving. This means additional costs for the employer. Unfortunately – these costs cannot be clearly estimated.
So we already have a new employee. So now let’s count how much it costs to implement him. The vast majority of organizations employ an employee for a 3-month trial period. Typically, in this period, the employee should implement the basic obligations and achieve a minimum acceptable efficiency of the organization. So this is the cost of another PLN 18,000. Additional costs that the organization must bear are the costs associated with employing and equipping the employee: research, training, etc. These cannot be precisely determined, as their scope depends on the organization.
Summing up the current costs of termination, recruitment and implementation, it turns out that the total cost is at least PLN 46,000. And yet you have to add additional costs that we have to bear in the sales department: tool costs (car, fuel, business trips, etc.), sales bonus costs, costs of additional benefits etc.
How long does the implementation of the seller take to effectively replace the outgoing employee? This, of course, depends on many factors, such as the industry in which the organization operates, the type of sales (B2B / B2C) and finally the type of products or services sold. We should also consider whether the new seller has experience from previous jobs, or whether he is “fresh”. It is also important whether the new seller “inherited” from the previous customer base, whether it has to be built from scratch.
Based on the 2015 ICAN Institute report, according to sales managers, the average time needed to implement a new salesman is over two months. Interestingly, 25% of respondents could not clearly determine how long it takes to implement sales representatives in his company.
Let’s remember that implementation does not equal the expected effectiveness. If we assume, as indicated in the study, that the implementation lasts over two months, then this period usually coincides with the so-called trial period. Therefore, it should be assumed that we should expect the full effectiveness of the seller only after half a year of admission to the organization.
Now imagine that according to Harvard Business Review data, the average turnover level among sellers is 25%! This means that with a sales department of only 10 people, the average cost of sales turnover would be PLN 115,000 per year. Can your organization afford such a risk?
At the top we have a “product” – there is no sale without it. In this particular case, they are the product of motorcycles grouped in series because of its properties. And so we have:
– 6 product categories: Sport, Tour, Roadster, Heritage, Adventure, Urban Mobility
– as many as 7 available models in the Adventure series alone
– a total of 29 motorcycle models, i.e. 29 different products
The division into categories is aimed at specifying the offer in relation to the specific needs of customers. Flagship brand, which undoubtedly is the R 1250 GS with the Adventure is just made up for touring the wilderness. It is characterized in relation to the completely different characteristics than a typical equipment of “urban” R nine T Urban G/S with the Heritage.
The aforementioned R 1250 GS comes in several color variants. In addition to vehicle varnish, we can choose the right package or a number of related or mutually exclusive options. In addition, the BMW Motorrad product range also includes a clothing line dedicated to individual vehicles – R&G Style.
Even if we are optimistic that our new seller will learn at a rate of 1 motorcycle per day, it will take 29 days to absorb the entire product range!
And this is just the beginning of the BMW Motorrad offer.
Motorcycle financing – in addition to traditional methods of covering costs (purchase for cash), we now have access to various financing options, including to solutions such as credit or leasing. Both of these financial instruments have their own parameters and – of course – their GTC which the seller must know.
Insurance – the premium customer wants to be serviced comprehensively, so the seller should know not only the scope of insurance, but also the terms of the GTC and specific amounts.
Clothing and accessories – BMW Motorrad’s offer includes several hundred items of clothing and accessories, from t-shirts to coveralls. Of course, the products come in various sizes/variants for both men and women.
Maintenance services – with a distinction between different seasons. In addition, each product has its own complicated technical characteristics (looking only through the prism of sales). Some motorcycles must also have matching like seat height. There is always information provided directly, but always have to know them.
Are the funds at the company’s disposal sufficient for the seller to acquire all the necessary knowledge? After this brief analysis, we know that the time after which a new employee begins to sell consciously is from 2 to 6 months.
Regardless of whether knowledge during training is provided at the headquarters or on site, the training materials are mainly made available in paper form. There are also electronic courses and e-learning + paper materials. Will the seller be able to sell using training materials? Definitely not!
Salesbook reduces the time needed to implement a new employee to a minimum. Already after a few days we have a vendor who can sell. Salesbook does not leave the seller alone during the sales process, but ensures his safety – and thus increases the certainty of sales presentation. The issues raised during the training are available at your fingertips.
Salesbook – gives a beginner salesperson a ready-made conversation diagram, which was arranged by the best practitioners from the company in which he works. They also took care of selecting the best materials and prepared a comprehensive argument. So in the simplest scenario, our “new colleague”, initially frightened by the high complexity of the product, is completely supported by the Salesbook from the very beginning.
Salesbook – is for the novice seller a work tool, thanks to which you do not have to prepare anything yourself. All information and work tools are in the Salesbook, which supports the entire sales process.
Salesbook – prepares an offer for a novice seller and automatically sends it to the customer. It informs him when and what sections the client viewed.
Salesbook – reports every meeting to CRM, a novice salesman does not have to enter anything.
And what will our “beginner seller” do? HE WILL SELL – because that’s why we hired him.
Even if Salesbook does not reduce turnover in your company, it certainly reduces the costs of implementing new sellers!