How to Fire a Salesperson

One of the most challenging and critical responsibilities of a sales team leader is knowing when and how to fire a salesperson. While terminating any employee is always somewhat painful and stressful, letting go of someone who has direct contact with a company’s clients and prospects can be a potential minefield if not managed correctly. Disgruntled former salespeople can do a lot of damage to a company’s reputation and can very well take existing clients with them when they move to a new position.

That said, sometimes a company may be better off firing a salesperson than keeping him or her on board. There can be several reasons to get rid of a salesperson. Perhaps his performance is poor. Other salespeople are negative forces to be reckoned with and alienate other employees. Even star performers can present a problem: They might ask for too much and believe that they can hold you hostage because they have good sales numbers. A “diva” salesperson is never good for an organization. The unfortunate reality is that a truly problematic salesperson can have destructive effects on a sales team and a company as a whole and needs to be removed promptly and efficiently.

If such a situation is managed effectively, the potential for anger, retaliation or litigation can be minimized, and the outcome after a termination can be positive for both the company and the salesperson.

Before You Make the Decision to Fire
Before you entertain any thought of firing a salesperson, it’s crucial to review whether or not you and the company as a whole have provided the necessary training and support for the employee to succeed. Too often, companies pull the plug on a salesperson without giving him the adequate tools for success. Ask yourself this question: With time and training, could this person become valuable to my business? Even the most competent professional needs ramp-up time unless he or she is coming to the organization with an established book of business. If the problem stems from a lack of training, it will be far more cost-efficient to provide a comprehensive training program than to simply terminate.

If there is any inkling of a potential problem, management should be proactive and take a hands-on role in the salesperson’s day-to-day operations. Much can be learned by simply joining the individual on sales calls to key accounts, including possible deficiencies in presentation techniques, people skills or product knowledge.

Through the process of any evaluation, keep the lines of communication open, and always provide clear direction and honest feedback. And — it can never be stated enough in any situation involving disciplinary actions or terminations — document everything! Give both verbal and then written warnings and be very clear about what is expected.

Plan for the Firing Carefully

First, you should review your customer relationship management (CRM) or contact management system and make sure it is up-to-date. A record of each of your salespeople’s activities and notes must be properly maintained in the CRM system. If there is a potential problem, you want to make certain all of the account and sales data is available in company records and does not go out the door with the salesperson. (As a team leader, you should be reviewing your employees’ files and information on a regular basis anyway.)

You will need to make some specific plans when firing a salesperson. Because you will want to contact the clients that person deals with as soon as possible — certainly the same day as the termination — you need a plan for how to move quickly. Familiarize yourself with the fired salesperson’s accounts, and notify them by phone, not e-mail, of the termination.

Plan for who will call clients (you, as the business owner, or the sales rep who will be reassigned the accounts), and what customers and prospects will be told. Ideally, senior management should initially accompany the new salesperson to appointments with key accounts. If a salesperson has yet to be hired, a manager might need to handle the accounts during the transition period.

I find that it’s best to give clients the least amount of detail about the firing as possible. “Joan is no longer with our company, but I want to tell you about who will be handling your account, and how we’re going to move forward.” If clients push for more information, politely resist. Tell them that you can’t discuss details but want to talk with them about their account. If you’ve decided to reassign Joan’s accounts to another rep, that person can make the calls. Keep in mind that if the client was close to Joan, it certainly doesn’t pay to share your complaints about her performance, and that it’s possible the client has already heard the news by the time you call. (On the other hand, it’s also possible that clients will be happy to hear they will be dealing with another rep.) What clients really want to know is, “How will this affect me?” They want reassurance that their accounts won’t be overlooked at your company. The same procedure should be used for prospects, although they’re obviously less critical than clients who are already generating revenue for you.