Sales performance is always top of mind for sales leaders and finance executives, but with a lack of timely, reliable data and the right reporting and management tools, they are often limited in their ability to accurately pinpoint any sales performance issues or opportunities for improvement. Thus, they fall back to relying on anecdotal individual sales performance and quota attainment information. Unfortunately, this will not drive fact-based, systemic sales performance improvements.
This further emphasizes the fact that analytical tools and approaches to sales performance measurement and improvement are needed more than ever -- tools that can pinpoint precise performance issues, highlight ways for sales managers to coach to specific problem areas, and support sales reps to own their behaviors.
In Part I of this two part series, we start with a look at the sales landscape, common sales challenges organizations are facing, and the key reasons companies tend to fall short on achieving the results they seek. Then, we present a case for change and the tools sales managers need to impact sales performance improvement.
The modern sales landscape is filled with challenges for leaders to navigate
According to CSO (Chief Sales Officer) Insights, 37.8 percent of sales reps missed their quotas in 20131. This statistic is startling, especially given that organizations spend billions annually on performance assessments, training, sales methodologies, and new technology platforms. Despite this investment, sales leaders often struggle with understanding which of these investments, if any, are driving a genuine improvement in sales performance. Specifically, we find that organizations seem to grapple most with the following:
1. Significant investments in sales training and development lack measurement of value
Companies spend billions of dollars every year on sales training, but they find it difficult to measure value. One study reported that 90 percent of all corporate sales training programs yielded only a 90- to 120-day increase in sales productivity before returning to pre-training levels2. Similar studies showed as little as a six-week lift and 85 percent of overall sales training fails to deliver results.
2. Application of training misses the mark when coaching is limited or absent
Typically sales managers spend less than 20 percent of their time on coaching. Pressed for time and immersed in sales reporting and planning activities, many managers assert they cannot prioritize their duties so that they can devote an adequate portion of time to coaching. This is critical, given that a sales rep’s percentage-to-quota can be as much as 19 percent greater when teams are supported by highly effective coaches1.
Furthermore, in “The Dirty Secret of Effective Sales Coaching,” the Harvard Business Review finds that sales managers often skew their coaching efforts dramatically toward the “tails” – the very best and the very worst reps on the team.3 However, greater improvements can often be realized when coaching is focused on moderate performers.
3. Forecasts suffer without true predictive indicators
While analytical tools have become more sophisticated in recent years, many lack true predictive indicators, so forecasts remain inaccurate. Given the volume of data that organizations and customers are generating, with the right tools, sales leaders are now better positioned than ever to predict future success.
4. Mistaken belief that the latest and greatest sales methodology holds the key to success
Sales effectiveness has little to do with the adoption of the latest and greatest sales methodology. If sales success was about the methodology, an organization could train its sales teams in the same ways and every seller would become a top performer. At its core, sales effectiveness has to do with a seller’s ability to execute – to go from the classroom to the field and then to performing effectively – and then continuously overcome barriers to growth, take ownership of actions, and embrace new paradigms.
5. Potential of middle performers is underestimated
Most sales reps fall somewhere in the middle on the performance bell curve. The common misconception is that B-players are simply average performers who lack the drive of their higher performing peers4. The reality, however, is that many of these individuals are competent producers capable of greater performance. They key is to figure out which of the B-players possess the characteristics to make the leap to become high performers5.
Despite best intentions, most organizations fall short . . . and it’s time for a change
In spite of good intentions and deep spend on training, organizations’ investments are not helping to change behavior in the field or having a noteworthy impact on sales performance improvement. Even if more sales managers could prioritize duties and allow more time for coaching, they are hard-pressed to deliver coaching in ways that are meaningful and engaging to their team members, much less drive true performance improvements.
Sales managers need to become equipped to not only identify and understand improvement opportunities for each individual sales rep, but support and encourage sales reps to own their professional development through effective one-to-one coaching. Ultimately, managers need to be given the tools to:
- Diagnose specific behavioral changes needed to help sales reps improve
- Coach effectively to specific performance issues
- Make coaching a collaborative experience between themselves and their team members
In Part II, we will review and assess an analytics platform and coaching methodology that can help organizations better understand each individual sales rep and facilitate smarter coaching to help drive sustainable financial results.
For more information on this topic, or to learn how Baker Tilly growth strategies specialists can help, contact our team.
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1CSO Insights, “2013 Sales Management Optimization Survey Benchmark,” 2013.
2ES Research Group, Inc. “Sales Training: The 120-Day Curse,” 2011.
3Matthew Dixon and Brent Adamson, “The Dirty Secret of Effective Sales Coaching”, Harvard Business Review, January, 2011.
4Thomas J. DeLong and Vineeta Vijayaraghavan, “Let’s hear it for B Players”, Harvard Business Review, June 2003.
5Sales Executive Council, “Shifting the Performance Curve - Exporting High-Performance Sales Disciplines to the Core,” 2003.