---
title: "Impact of Sales Performance Problems"
slug: "impact-of-sales-performance-problems"
updated: 2026-02-04T22:56:29Z
published: 2026-02-11T04:48:16Z
canonical: "support.fullcast.com/impact-of-sales-performance-problems"
---
> ## Documentation Index
> Fetch the complete documentation index at: https://support.fullcast.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Impact of Sales Performance Problems
[](https://bit.ly/3LNpJqD)
## **The Problem with Sales Performance Problems**
Dealing with sales performance problems isn’t fun. Having conversations where you, as a manager, map out to a rep that their level of performance isn’t where it needs to be, and why, is never comfortable. But you need to do it anyway.
As a results, many managers and leaders will avoid these conversations, thinking that the discomfort of addressing the situation is worse than letting the situation persist, so managers will often look the other way, hoping it will go away or fix itself (spoiler alert: it never does.).
This is a terrible management decision, though. It will kill your sales org, and then your company.
Being seduced into this bad decision in part stems from not fully comprehending the many costs associated with poor performance in a rep. In the interest of helping snap folks out of this comforting, dangerous trance, below we enumerate the consequences of not proactively addressing and resolving performance issues.
We’ll go through these from most basic, to more advanced, but the important thing to remember here is that you’re eating **all** of these costs as long as you have an unaddressed and unresolved performance problem in your sales organization.
So while addressing that performance problem directly will be uncomfortable, it’s highly unlikely avoiding that discomfort is worth the below wreckage.
### Individual Underperformance - “Not covering your own nut”
The first and most basic problem is that a rep who doesn’t perform doesn’t cover his own “nut.” If you’re paying an account executive $150k, say at a $75k base with a 10% commission, and he doesn’t bring in, say, more than $15k+ a month - well, he’s literally burning cash for your organization, when he should actually be delivering more along the lines of $40k - $60k. We’ll talk more about this opportunity cost in a bit, but at most basic sales reps should cover themselves (and throw off cash for other parts of the org - more on this soon.)
### Organizational Opportunity Cost - “Stealing Others’ At Bats”
The next problem is that this rep is taking at bats from others who could be doing good things with them. First, consider the SDR and marketing cost to generate a valid opportunity for an AE to engage. Say your SDRs cost $60k a year, and generate 10 opps per month. Each opp costs $500. Second, consider the value that a typical opportunity represents at your organization’s Average Sales Price and Win Rate. If across your AE team, you have an aggregated 20% win rate, and a $25k ASP, every opp an AE engages represents $5k in bookings ($25k * 20% ). That is, AEs take opps that cost $500 to create, and turn them into $5k dollops of bookings.
Now consider a rep who has a substantial win rate issue. Instead of winning 20% of his deals like the other reps, he wins 5%. Instead of turning a $500 opp into $5k of bookings, he turns each opp into $1k in bookings. Which is bad enough, but now consider the opportunity cost of not giving his opps to any of the other AEs with a 20% win rate? Every opp you hand him is like lighting $4k on fire - since any other AE would turn it into $5k.
Now, you might say “I’m not sure that my other reps could handle more opps”, but this is rarely the case. As long as your other reps aren’t fully loaded (look at their calendars, if they don’t have 15+ meetings a week, they aren’t fully utilized) and are on top of their opps (if their win rates and ASPs are in line with team averages this proves that they’re efficient - if that win rate, ASP, or frequency of opp engagement started to dip, then yes, they might be overloaded.) Or, think about it this way: if you asked any other sales rep on your team if he would like 5 more opps per month (which at above win rates would mean another win) what would he say? Probably “hell yes!” By not managing the shortfall of your performance problem rep, you’re actively stealing from these other, higher-performing reps. Even if all of your other reps are fully utilized, even though it may be more work, there are other candidates in the market that you can hire, onboard, and get to success - like your other reps.
Now take the above concept of the opportunity cost of a rep with performance issues, and extend this to SDRs with leads / accounts or CSMs / AMs with existing accounts, and the point still stands.
A huge, underappreciated cost with performance problems is that other people in your org could be doing a much better with the “at bats” that are currently being squandered by a rep with performance issues. As such, it is vital to address these issues and remediate the performance issue, or get this work into the hands of others who will do it better.
### Team demoralization - “Underperformance Contagion”
If the downsides, both actual cost and opportunity cost, of rep performance issues were isolated to that single rep, it would be bad enough. This is not the case, however.
Sales organizations are cultural institutions, where the performance of each rep impacts the others reps - by demonstrating implicitly what is “ok or not ok” and further by characterizing if there are benefits tied to outperformance or consequences for underperformance. The absence of performance management in an organization furthermore injures the ability of an organization to set policies that will actually be adhered to - if it’s clear there are no consequences associated with non-compliance, why would reps comply? In a “use it or lose it” fashion, by not managing, you actively injure your ability to manage, even if you wanted to.
Team contagion shows up in two problematic states. First, your middle of the road performers can observe the lack of consequences associated with underperformance, and will tend to converge on the lower standard of performance themselves. “If so and so can get away with fewer calls / emails / a worse win rate / lackadaisical pipeline management, why should I bust my ass?”
Secondly, it will impact your top performers. While top performing reps are more immune to these sort of performance contagions, and will continue to be top performers, they are impacted in the form of not being pushed by others. Frequently top performers define themselves as wanting to be at the “top of the pack.” Well, if the rest of the pack diminishes in performance, top performers need not push themselves as hard to lead that pack.
In this fashion you risk having a Ferrari (or couple Ferraris) cruising in fourth gear - still faster than all the others (who themselves are slowing over time), but below where it could be. Furthermore, top performers typically don’t appreciate being in organizations where underperformance is tolerated. Part of it is a recognition thing, but by leaving underperformance unaddressed in your organization, you will be opening the door to top performers thinking “do I really want to be in an organization that is ok with that?” and the associated attrition. That is, leaving underperformance unaddressed can literally chase high performers out of your sales org - the worst possible outcome.
As an example, this is actual data from a sales organization where a single underperforming rep, whose performance went unaddressed
### Busted Recruiting & Onboarding Ability
Related to the impact of unaddressed performance issues on others on your sales team is the impact on potential new hires. Your ability to hire and successfully onboard new sales reps (SDRs, AEs, AMs, etc.) is core to your ability to grow your business. [This is how B2B businesses scale their revenue acquisition functions](https://docs.google.com/presentation/d/1pcSy-zV-776abGmZ8WJ7bGeXcHQAxscdypGdrUz28_c/edit#slide=id.g20619feeda_0_2562).
The same way that unaddressed performance problems in a rep (or set of reps) injures your existing team, it also injures your ability to successfully bring on new reps and get them to success. Much the same way that it’s difficult to hold existing reps to a standard of performance that is not being maintained by a low performer, the same will be the case with new reps you onboard. But whereas performance contagion impact on your existing reps can erode their acceptable performance (or create drag on top performers), in the case of new hires it can prevent new hires from ever getting into band. This, of course, is a massive issue, in that your ability to grow as a revenue organization is 100% tied to your ability to hire and successfully onboard new reps. Your existing performance problems, left unaddressed, can stop your ability to grow in its tracks.
### Fundraising Impact - “Broken Numbers”
This is a particularly insidious manifestation of unaddressed performance issues because it’s even less obvious than organizational opportunity cost while potentially removing the very fundraising means by which you could successfully scale your company.
When investors are evaluating businesses, they look for the efficiency of the sales organization, and also its ability to grow by adding reps in a cost effective fashion. On the first point, efficiency, a key metric of evaluation for investors is “cost of sales” and contribution margin of the sales organization. How much does it cost in sales rep and SDR salary expense and commissions to earn a dollar of bookings? This is a key indicator of the capital efficiency of an organization and has implications for how much money the organization will need to raise to get to ever higher levels of recurring revenue.
To understand how unaddressed performance issues impact this, consider our rep with a 5% win rate, as above. Let’s assume that the SDR team provides that rep with 5 new opportunities a week (at a cost of $2,500, as we documented above). Because the rep in question has a 5% win rate, we would expect them to win one deal a month worth the $25k ASP we discussed above (20 opps * 5% * $25k / win). This is where things get interesting. Assuming that rep is on a $150k On Target Earnings plan, split 50/50 with base and variable, we would expect him to be paid $6k or so base salary a month, and then nearly 10% of commission on that $25k deal, for another $2.5k. In this scenario, the rep costs us $9k a month, and the SDR costs of those opps adds another $10k, for a total “cost of sales” (this is before we get to marketing expense) and is delivering $25k of bookings per month.
On the face of it, you might say “Well, he’s at least covering his nut, so that’s good.” But it’s actually not. This is extremely inefficient. It costs the organization $19k to get $25k of bookings - a 76% cost of sales. In this scenario, acquiring $10m in bookings would cost us $7m+ purely in just sales costs - to say nothing of engineering costs, etc. Given that a more typically B2B SaaS cost of sales is 20% - 30%, an organization composed entirely of these inefficient reps would be 3x more capital intensive than peers. For example, a sales organization fully composed of reps with a 20% win rate, in this model, would be earning $100k of bookings, costing $6k in base, $10k in commissions, and $10k in SDR opp creation costs, totaling $26k - a 26% cost of sales. Scaling to $10m in bookings in this scenario would cost us $2.6m. That’s a much better deal if I’m a VC looking at this company.
Now, it’s unlikely that the organization is fully composed of these underperforming reps from the first example, but if 50% of the reps are at this poor level of performance, you’re 150% more capital intensive than peers, and if it’s 25%, it’s still a bunch of drag. These are precisely the metrics that investors will be looking at to consider if your business is worth investing in and at what valuation. The more capital intensive it is (due to expensive, inefficient cost of sales), the lower the valuation.
This is also the case as relates to the issue above about the ability to successfully onboard new reps. If you are unable to bring on new reps in an effective manner because your sales organization culture is being eroded from unaddressed performance issues, again, investors will take pause. [Consider this example](https://docs.google.com/presentation/d/1pcSy-zV-776abGmZ8WJ7bGeXcHQAxscdypGdrUz28_c/edit#slide=id.g20619feeda_0_3069) of two organizations with similar sales motions, but wherein one organization successfully ramps reps in 4 months, and another ramps them in 8 months. Which curve would you want to be participating in?
The upshot is, by leaving sales performance problems unaddressed, you are injuring your organization’s ability to raise money - at all, or on terms that are more favorable - and hurting the value of your equity and the long term viability of the organization.
### Unfair to staff
One thing that people don’t consider is how avoiding performance conversations is unfair to the individual who is having the performance problem. Rarely do people want to be bad at their jobs, and so letting them persist in having a performance issue without coaching them or helping resolve is doing them a huge disservice. Moreover, if the root cause of their issue is that they’re actually, truly, in the wrong role (an SDR who has decided that sales isn’t for them, or an AE who has decided he would rather be in management than day to day selling), then the longer you don’t address this, the more wasted career time they’re encountering. Having candid, frequent performance conversations is the best and most rep-centric thing you can do in this situation and is good for them as well.
### What can be done about this?
The above may seem drastic, and honestly, it is a serious topic with substantial potential negative impacts to your business.
The good news is there are well-proven paths for addressing performance shortfalls.
First, ensure that you have a consistent cadences of well structured [one-on-one meetings](https://docs.google.com/document/d/1O8aihVhcP0SCwvGqPNr349G8T7EtCJvX9MpQHVGmgwk/edit#bookmark=id.8zi0d0w4kamq) with your direct reports. If you have consistent, recurring, one on ones with your staff, there will be lots of “space” for performance feedback and coaching conversations. Second, be proactive and clear about what expected levels of performance are - this should be numerical where possible. Provide it in documentation, using an activity quantity and quality [activity level guideline document like this](https://docs.google.com/document/d/12Xy4dBr47nbXpm5Db7oXoA5yBrCyeDaf-R3ncnYB_rA/edit#). Be frequent in your inspection of key metrics on a cadenced basis, in [weekly team meetings](https://docs.google.com/document/d/1O8aihVhcP0SCwvGqPNr349G8T7EtCJvX9MpQHVGmgwk/edit#bookmark=id.md201khvt68n) and [monthly retrospectives](https://docs.google.com/document/d/1O8aihVhcP0SCwvGqPNr349G8T7EtCJvX9MpQHVGmgwk/edit#bookmark=id.ib10ztu0majw).
When you discover performance shortfalls, use tools like the [metrics inspection and diagnosis guide](https://docsend.com/view/txbczig) to figure out what the root cause may be and use the techniques described in [Making Performance Conversations Easy](/performance/docs/making-performance-conversations-easy) to, well, make the conversation about addressing the performance issue easy yet clear.
And if all of the above is not working, use a well-documented [performance improvement plan](https://docs.google.com/document/d/1-TYRAmO9h8NP-cZZXJFjkBrRuvXVwQD3AgS_dTLusTI/edit) in order to be more structured about the issues and the path to remediation.
As discussed at the beginning of this document, the most important thing with performance issues is to address them. So even if you are afraid you won’t be the most skilled at addressing the problem, at the very least start the conversation today!
And of course your friendly Atrium sales strategy success manager is there to help you with any of these documents or topics, so just reach out!