Every sales team has players who try to act smart by overselling the product or underselling themselves. It usually happens when there is a variable pay structure with incentives offered to those performing above par. But this is where the “Churn and Burn” behavior comes in your sales team.
There are times when the individual in your sales team tries to sell the product’s features that are usually not present there. This usually happens when there is unhealthy competition amongst the sales team. You can term this behavior as “churn and burn” behavior.
Let me now walk you through what happens when this kind of behavior carries on for an exceptionally long time in an organization:
The company loses big time
Due to poor training and lack of product knowledge, salespeople can oversell a product. This leads to losses for the company, contrary to what they assume. This is because the brand and reputation are damaged due to wrong information. This leads to a paying customer churning out due to erroneous information. This leads to the loss of money for the company- to onboard, close, manage and handle a customer who churns out fast.
The representatives think that they can go away with anything and everything
The sales representatives get the commission, so they look at it from a revenue standpoint. This leads to them repeating what to do to trigger short sales. The representatives pack low-quality products and say anything to close a deal. This is what leads to huge losses for the company. Usually, sales teams tend to overestimate and underdeliver. This attitude must be dealt with naturally. You need to allow them the flexibility to communicate with prospects and still not allow them to share false information of any kind.
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The customers churn out quite quickly
In the end, even customers lose out quickly. You lose a chance to get them back in your books again. You cannot close them again. This leads to a lack of trust in the company. They may even lead to negative reviews online. Customers churn out quickly because of incorrect information.
So, what are the Separate ways you can overcome this situation? Let us derive a solution to this problem in our next section.
How to Minimize “Churn and Burn” Behavior in Your Sales Team?
It is prudent for companies to listen to customers more than ask questions. Keeping the customer comfortable, informed, and aware of the product is important. Build a great relationship with the customer and ensure transparency in the process. Hiring the right salesperson is important. The job is not to be persuasive alone. It is to help the customer solve a problem with our product. This is what sets a good salesperson apart.
Overturn commissions for those customers that churn quickly
Implement clawbacks to ensure that sales reps stay in line. The customers who churn out quickly can be noted, and the related sales professional’s commission can be cut back. This might not help much but they will cut back if there is a deal velocity. This will lead to representatives and sales officers looking at keeping the information as true as possible to customers. This will keep them on the toes to not provide false information to customers.
Let the bonuses be given on account of revenue and NPS or even better sales rep NPS
Another terrific way to minimize churn and burn behavior is by tying it with bonuses. You can match a bonus pay with the revenue or NPS. They need to be paid for only the five-star, well-made deals. It needs to be noted that sales rep NPS is the best way to keep track. The sales rep NPS process is of the process as below-
- Ninety days post the sale. the customers will receive an automated survey about the buying process. They need to rate it on 1-5.
- Sales reps with a good rating will get the bonus for sale.
This will improve close sales rates and reduce renewal churn. This will reduce the ‘fake out’ sales and ‘churn and burn’ sales. Representatives will not sell crummy products and deals those customers won’t use. This is beneficial for a company since there is a long-term benefit.
Train your sales reps properly
The most important piece is to train sales representatives properly. You need to train them well to handle all questions from the customers. An internal system that helps customers know the answers to the top questions customers ask is important. You need to impart enough product knowledge to sales representatives to make a better approach. Sales collateral and sales education are important aspects of this process.
Get approval of the CS (Customer Success) team for larger opportunities before they are marked as closed out/marked won
This strategy will work with large accounts. Customer success teams can be forced to accept the opportunity before it is validated in the CRM. This means customer success approves sales leads. Though the sales team may not like this, it is a great step to ensure that all deals are properly checked, resourced, and understood.
When your sales team develops the “Churn and Burn” behavior, it can ruin your organization in the longer run. In this situation, the best thing you can do is to follow the things I have mentioned in this blog and see that your sales team discouraged this kind of behavior from the start. 17
You can do this by informing them to act responsibly and do the right thing. Yes, exceptions exist in every organization, let alone the sales team, but with what I have mentioned in this write-up, you can discourage this behavior in the longer run.
Dattatraya Shetty is an IT Professional with 2 Decades of experience in areas of Product Development, Implementation & Service Delivery Management. As the Head of Implementations and SOC Compliance in Smartkarrot he is on a mission to provide relishing customer experience.
Published January 13, 2022, Updated March 02, 2023