Companies may not be able to prevent turnover, but they can manage it. Here's how.

Your company is not the only one with turnover problems. The securities industry has some lessons for all sales managers.

Merrill Lynch recruits top college graduates, trains them as stockbrokers (salespeople), develops them and, often, loses them to other brokerage houses. Merrill Lynch's competitors recruit from Merrill Lynch. They "cherry pick" the best talent without having to go to the expense of recruiting, selecting, training and developing people. Other brokerage houses can buy proven talent at a bargain instead of going to the greater expense of developing their own.

Merrill Lynch attacked their turnover problem by identifying and managing it. They didn't try to prevent broker turnover on a company wide basis. Instead, they sought to retain a core group of productive brokers who had spent six years or less with the firm. This group represents the "target market" for competing firms. It is also the group whose loss most negatively affects profits. The marginal producers and the brokers who had been with the firm for over six years were not part of the retention management strategy. In a business where 25 percent of salespeople produce 75 percent of the sales, this strategy paid off. Merrill Lynch reduced turnover in this high-leverage group from 8 percent above the national average to 11 percent below the national average.

Here is a four-step system to help manage sales turnover and improve the company's sales and profits. It involves gathering enough data to define your turnover problem, and then developing a turnover reduction strategy.

1. List the top sales performers who have turned over during the last five years. Figure the average length of service of these salespeople. If you are only keeping each top performer for 9 to 18 months you can set a goal for keeping them longer, but not forever. Certainly two to four years would be a more profitable length for the company, and probably, for the sale rep too.

2. Target the top producers on your sales staff whom you want to keep and tell them that you want them to stay. Discuss opportunities for them within your company. Many managers resist this advice because they feel if salespeople know they are important, they will be harder to manage. But top salespeople already know who they are. They feel that they are doing you a favor by working for you- as much of a favor as you are doing for them by providing a place to work. And they are probably right.

3. Build in rewards to improve your retention rate. An extra week or two of vacation a year may be a great incentive for a salesperson to stay on the job. But if you find that your top producers are quitting after an average of two years of service and you give three-week vacations after ten years of service, your rewards don't match the realities of the problem. If you want to use vacations as a reward, offer a three-week vacation after three years and a four-week vacation after five years. It's better to have top producers on the street for 48 weeks a year than to have brand new trainees spinning their wheels for 52 weeks a year.

4. Conduct exit interviews when people leave to find out if they could have been retained. And ask for their advice on how you might have managed them differently. You don't have to take their advice, but you might want to make some changes. Some authorities suggest conducting these "exit" interviews before salespeople leave. Here's how: Every six months or so hold a meeting with your salespeople and ask the following questions- Why are you still here? What do you like about working here? What would you like to see changed during the next six months? What would you like me to do differently in managing you?

Risky questions? Not if you ask them sincerely. Not if you're willing to listen to their answers.

Every salesperson is a "free agent". Loyalty must be earned by management. The task for sales managers is to keep challenging your salespeople to grow and develop in a job. Not forever- just for a few years and a few hundred thousand dollars longer than average. Quit hiring "warm bodies". Eliminate that term from your thinking. It represents an attitude that guarantees turnover. If you need some terms to substitute for "warm body", try "qualified applicant", "proven performer", or "potential winner".

There is a critical difference between managing and preventing turnover. Turnover is not a bad thing. Getting an additional year or two from a top rep is a profitable improvement. It helps you recoup your training investment and buys you the time to develop another salesperson who will eventually take over for your top biller, who will eventually move up and/or out. Train and develop your veterans and manage them as much as you do your beginners. Your best chance for higher sales is from people who are already top producers. It is just as important to interview a prospective salesperson who can sell 30 new accounts, as it is for you to make a call on an account. Set a goal for interviewing an average of two people a week.

One authority writes that trying to prevent turnover is like trying to kill a porcupine by sitting on it. It's not worth the pain. Just focus on keeping top producers longer and spending time to find, train, and develop people to replace them.