Conversion rate increase for outbound sales team

The Situation

We had a small outbound B2C sales team (~10 agents) that called our customers to upsell our products to existing customers and to finalize sales with warm leads. For a longer time we had struggled with increasing the average conversion rate of our calls as it was around 8.5%. We wanted to hire more good agents but HR was complaining that we aren't getting enough applicants and those who applied weren't too good. The advertised salary was 300€ + performance bonuses which was market average for such position in the market. On average agents were getting around 1200€ including base salary and bonuses. Bonuses were calculated based on conversions with each conversion adding 5€ to the salary.

The problem

Our outbound sales aren't improving performance and we can't get better agents to join the sales team.

This was important because we had a limited amount of leads to sell to and it meant that poorly performing agents were wasting our upsell opportunities and company lost potential revenue. 

What I did?

At first I reviewed each individual sales agent performance for the past 3 months in order to evaluate the performance and there were no surprises. Some agents were hitting really high numbers and almost doubling the salaries of worst performers. 

It was clear as day that we needed to switch out the underperforming agents but we were't getting any quality candidates. 

Scenario 1 - double base, decrease variable

What we did at first was considered doubling the base salary and decrease the bonus per conversion. In result we would probably get better candidates in the door but my calculations showed that by doing so we would penalize our top performers by reducing their total compensation and would increase the compensation overall. This was a no-go for me because we would risk losing our top performers due to this change. 

Scenario 2 - remove base, increase variable, introduce guaranteed salary

After learning that Scenario 1 would harm our top performers and the reason for that was that the variable part made less, I decided to test out a scenario to the opposite extreme and make the salary bonus-only. I used the average total cost per conversion of the initial scenario to come to a similar overall result in total company costs. This scenario gives a larger bonus to top performers but under-performers would earn significantly less. In terms of motivation this made complete sense but now we had a problem - we would put out that our salary purely depends on the performance which would bring us even less candidates in the door. 

To solve the lack of candidates we introduced a guaranteed minimum salary of 1000€. We were saying "salary from 1000€" in the job ad which was one of the top salaries for such positions in the country and this guaranteed us top talent applying. What we didn't mention in the job ad was that we would terminate the employment in a few months if agent doesn't reach the guaranteed minimal salary. 

In the example we could clearly see agents who were underperforming, and we had excellent candidates to replace them. 

The result

In the longer term we reached average Conversion rate increase from 8.5% to 10% and a significant increase in high quality applicants for sales roles while keeping the company cost per conversion on the same level (because we calculated the bonus per conversion based on the historical average).

Try it!

You can try this on your own and implement in your business yourself or if you need some help with call your sales agent work optimization or other growth issues, feel free to contact me. 

You can use my calculation template here https://docs.google.com/spreadsheets/d/16MjCr4YyChB5CdctCAd1GgtVveE_DOROwbS-SV8EesM/view