When is it Time to Cut Ties with an Underperforming Sales Rep?

Letting someone go is one of the worst parts of being a manager. It’s never a pleasant experience, but sometimes it’s necessary for the good of your organization, and, paradoxically enough, the sales rep you’re letting go. Knowing how and when to fire someone is also a key skillset to learn – yet almost 80% of sales managers don’t really know how to prepare for a termination.

  1. Make sure you actually need to fire someone.
    As we all know, not even the best sales rep will hit their quotas every single month, and even some struggling sales reps can turn around with the right training and coaching. So before you pull the trigger on a dismissal, make sure that it’s the right course of action to take.That involves asking yourself some hard questions. 

    • Have you provided the potential termination target the tools they need to succeed?
    • Has the coaching they’ve received from you specifically addressed their individual areas that need improvement, and has that coaching been crafted to fit their learning style?
    • Have any of your own bad habits infected your sales team or this individual?

    If the answer to all these questions affirms that you’re in the clear, then ask yourself if the person is coachable. More specifically, are they open to new ideas, and are they willing to implement corrective actions based on those new ideas? Even the worst performing sales rep can improve, even thrive, if they’re coachable. It’s the ones who can’t, or who have a negative attitude, that need to be let go. Negativity in particular is a valid reason to let someone walk, because it’s the ‘cancer’ that can spread and affect your entire sales team, bringing everyone down.

  2. Keep good records.
    As a form of protection, and to be absolutely certain you need to terminate a sales rep, it is important to document all substantial interactions and record of them. That not only includes sales and activity discussions, but notifications of under-performance and Performance Improvement Plans (PIPs). The latter are particularly important. Not only are they evidence in a possible future court contestation of the dismissal, PIPs are an opportunity for a failing sales rep to improve their performance and productivity to succeed in their role.
  3. Secure company assets at the time of or before the termination.
    Continuing the theme of safeguarding your organization, make sure that your company assets are safe. That includes customer data, proprietary information, business inventory, and anything else that belongs to the company. A termination is a rough event in and of itself, representing a poor hiring decision at significant expense. Leaving yourself open to exposure by an enraged, emotional former employee doing something like taking trade secrets or customer lists to a competitor or wiping the company’s network is even more expensive a setback and potentially ruinous.To ward off these events, have someone else – often loss prevention/security – accompany the employee to their desk while they collect their personal items and lead them out the door. While this might seem a touch much at first, preventing revenge sabotage and espionage will be worth far more in the long run.
  4. Despite the need to carefully prepare, also be swift in the termination process.
    Harvard Business Review found in a massive study that 78% of high-performing sales organizations fire an under-performing sales rep in a year; 63% of average sales teams in the same time span, and just 52% of likewise under-performing businesses. The takeaway is clear – put in the work to identify and clear the chaff that can’t be salvaged as soon as possible while keeping in mind the earlier points about making sure they can’t be improved.Clara Hogan goes so far as to recommend firing the bottom 10% of your sales reps on a yearly basis. Obviously, such measures are draconian in a team stocked with quality performing reps and may lead to stress and anxiety among the rest of your organization. But for average or under-performing sales teams, such a significant, consistent pruning may inspire better performance from the remaining reps. Or, to put a slight twist on Machiavelli, sometimes it’s better to be feared than loved.
  5. In the actual termination meeting, be empathetic and explanatory.
    Many times sales managers fire someone with a reason that explains the what of the termination, but not the why. Failure to meet quotas is often a what – especially if numbers are showing improvement, even if they’re not quite up to par. Pointing out that their particular talents don’t match with the role is certainly a why, and a way to mitigate the hurt of the experience.You also want to make certain that you’re not disparaging the sales rep as a person. After all, just because you’re letting them go doesn’t mean they have no value, or that they’re incompetent. It’s just that this particular job with this particular company isn’t the right fit for them. Frequently, if the conversation is done with care and attention to how the person is feeling, it’ll come out that they agree with you. It’s also a chance to present this event as an opportunity for the person to find the right situation for their particular skills and talents and frame the unemployment in as positive a terms as possible. 

    Side note: you should also be prepared to answer questions such as final check, any severance package, and outstanding trailing commissions. If you don’t have that information, get it from HR – the terminated rep is going to have enough things to deal with without your requiring them to go through unnecessary steps, and you want to create as smooth a transition as possible.

  6. Immediately follow up with the fired sales rep’s clients.
    Without going into specifics or details for legal reasons, contact the clients in the former rep’s portfolio posthaste – ideally from the sales rep who will be handling the accounts on either a temporary or permanent basis. In your communications with the clients, you want to reassure them that your organization values the clients’ needs and relationship and will be attentive to both. Also follow up those words with concrete actions proving it.

Termination time is always stressful and unhappy. But if you pave the way beforehand, act fairly during the termination itself, and engage in best follow-up practices to keep the transition as smooth as possible, what seems like a loss will be a win-win. You have space to bring in a higher-performing sales rep, your clients will be secure that their service and relationship won’t be disrupted, and your former employee will be able to move on to a position better suited to them.