Why sales onboarding matters
Are you tired of hiring new salespeople, only to see them struggle to make a sale? Or perhaps you've hired a top performer, but they seem to be struggling to fit in with your company's culture? The solution to these problems is implementing an effective sales onboarding program.
In this post, we're going to dive into why sales onboarding matters and how it can benefit your company. But first, let's start with the basics.
What is sales onboarding?
Sales onboarding is the first training new sales hires undergo when they join an organization. Its purpose is to equip sales hires with the fundamentals they must know in order to be successful. The sooner new sales hires can start making sales, the sooner they can generate revenue for your company.
The initial period at a new company can make or break a sales career, but is so often overlooked. A survey conducted by the Sales Management Association found that only 56% of companies have a formal onboarding program for new sales hires. Furthermore, according to a study by Gallup, 88% of employees indicate their organization is not good at onboarding.
Why does sales onboarding matter?
In the age of remote and hybrid work, sales onboarding is more important than ever. And let’s face it, remote work is here to stay. According to Gartner, the number of fully remote and hybrid knowledge workers will account for 71% of the U.S. workforce in 2023. To remain competitive, organizations need to evolve their sales onboarding strategies to effectively equip new sales hires to be successful in their remote work environments.
Reduced turnover costs
Hiring new salespeople is expensive. In addition to the time and resources spent on recruiting, interviewing, and training, there are also costs associated with turnover. When salespeople leave, they take valuable knowledge and relationships with them, which can be costly for your company. According to DePaul University, losing a rep costs an average of $115,000 with an average replacement time of 6 months! Take a moment to consider, how much would it cost your organization to replace 5 sales people?
A strong onboarding program can help reduce turnover costs by ensuring new salespeople are well-equipped to succeed in their roles. According to a study by the Brandon Hall Group, companies with effective onboarding programs experienced 50% lower employee turnover rates than those without one.
Improved new hire productivity
Starting a new job can be intimidating, especially if you're in sales. A comprehensive onboarding program is essential because it helps ease new hires' anxiety and build their confidence. When new salespeople feel more confident, they're more likely to be motivated and engaged in their work, which leads to better performance and improved new hire productivity.
According to a report by GlassDoor, companies with a strong onboarding process experienced over 70% improvement in new hire productivity. Additionally, companies with effective onboarding programs achieved 91% first-year quota attainment for their sales reps compared to only 42% for orgs without a formal process, according to a study by the Aberdeen Group.
On the flip side, a study by McKinsey & Company found that ineffective onboarding can lead to a 50% increase in the time it takes for new hires to reach full productivity.
Increased employee retention
Did you know that employees who go through a structured onboarding program are more likely to stay with the company long-term? In fact according to GlassDoor, companies with a strong onboarding process improve new hire retention by 82%. Additionally, a study by the Wynhurst Group found that new hires who go through a structured onboarding program are 58% more likely to stay with the company for three years or more. This is because onboarding programs provide new salespeople with the necessary knowledge, tools, and resources to succeed in their roles, which leads to job satisfaction and a sense of investment in the company.
On the flip side, a study by O.C. Tanner found 20% of employee turnover happens within the first 45 days of employment with poor onboarding and 4% leave after a disastrous first day.
Improved customer retention rates
Sales onboarding is also critical in improving customer retention rates. According to a report by Brainshark, companies with effective onboarding programs experience 16% higher customer satisfaction rates. Similarly, a study by the Aberdeen Group found that companies with effective onboarding programs had a 17% year-over-year improvement in customer retention rates compared to companies without a formal program.
You might be wondering, how does sales onboarding impact customer retention rates? Sales onboarding programs ensure that new hires understand your company's messaging, value proposition, and product features. This consistency in messaging is critical in building a strong brand and sales team. By providing new salespeople with the same knowledge and resources, they can represent your company in a unified way, which builds trust and credibility with prospects and customers.
Conclusion
Sales onboarding is a critical process for companies to prepare new sales hires for success. The statistics show that organizations with effective onboarding programs experience reduced turnover costs, improved new hire productivity, increased employee retention, and improved customer retention rates. By investing in a comprehensive onboarding program for new sales hires, companies can set themselves up for long-term success.
Missing the time and resources to build an effective sales onboarding program? Or wondering how effective your existing sales onboarding program is? Have a look at our services to see how we could partner in taking your sales onboarding to the next level.
Sources
Sales Management Association, "Sales Onboarding: A Critical Discipline”
Gallup, "Why Great Onboarding Matters”
Gartner, "Gartner Forecasts 60% of Organizations Will Offer Flexible Work Options by 2023”
Harvard Business Review, "The High Cost of Losing a Salesperson”
Brandon Hall Group, "The Evolution of Onboarding: Trends and Opportunities"
Glassdoor, "Why Onboarding Matters for Employee Retention"
Aberdeen Group, "Sales Onboarding: Addressing the Gap between Enthusiasm and Effectiveness”
McKinsey & Company, "The impact of candidate experience on recruiting”
Glassdoor, "New Hires Leave Within the First Year? Here's How to Stop Them”
Wynhurst Group, "Onboarding New Employees: Maximizing Success”
O.C. Tanner, "The Power of Employee Recognition"
Brainshark, "Effective Onboarding: A Catalyst for Success"
Aberdeen Group titled "Onboarding 2013: The Path to Productivity”
