One of the most pressing trends impacting salesforces today is the steady decline in the numbers of salespeople making quota. According to CSO insights, the percentage of salespeople at quota has been in a steady decline, and 2017 marked the first year that this important metric dropped below 50%. This has occurred while most organizations have raised revenue targets: The perfect storm of bad news for sales leaders. These conditions make the Herculean task of hitting growing revenue targets increasingly difficult.
How Much Does Sales Coaching Matter?
With this confluence of events, it is no surprise that in recent years sales coaching has become an intense area of focus for organizations looking to improve the capabilities of their salesforce. In fact, research we conducted with the Sales Management Association indicated that sales coaching was identified as the most important sales management training topic. Needs analyses conducted across a variety of industries revealed that sales coaching was either the number one or number two topic in order of importance. Organizations think coaching is important and most sales managers want to become better at it. So how much does sales coaching matter? What kind of impact are sales managers having on their organization’s ability to hit their targets?
Is Performance Against Revenue Targets a Good Measurement?
We turned our research toward these important questions and we discovered some interesting things. First, there’s the most obvious measure of a ‘good’ manager, which is how they perform against their revenue targets. Here’s what we found… Vantage Point’s recently completed, comprehensive study into sales coaching practices revealed that the top 25% of sales managers outperformed their lower-performing peers by $3.5m dollars in revenue, and achieved 115% of their revenue targets on average. Even the middle 50% of sales managers were hovering around 99% of their revenue target. With almost 75% of managers coming close to or meeting their revenue targets, why is the percentage of salespeople at quota below 50% – and what are the highest performing managers doing differently?
Or is the Percentage of Salespeople at Quota Better?
One of our most illuminating findings was that examination of the percentage of salespeople at quota on any given team is a much more useful metric. When we look at the same three groups of managers in the bottom 25%, the middle 50%, and the top 25% – something shocking emerges. The lowest performing managers and the core (the middle 50% of managers) had almost the same percentage of salespeople at quota. That means that the core group of managers were relying on a few high-performing salespeople to get them close to their revenue target. The top 25% of managers were getting 30% more of their salespeople to quota. That is the key to hitting increasingly aggressive revenue targets – get more of your salespeople to quota.
A Double Blow to the Sales Organization
The cold hard facts demonstrate that sales managers are failing at this critically important task. High-achieving individuals who were successful salespeople are largely unable to replicate their high performance when managing a sales team. This is a travesty, both for the sales managers who are failing, and for the organizations that employ them. Consider why this is particularly alarming. Sales managers are promoted because they are successful salespeople. When a high performing sales rep becomes a failing sales manager, not only is the organization they work for at risk of not making their numbers, that same organization has also lost a high-performing salesperson. It is a double hit.
On the one hand, it makes perfect sense to promote the best and brightest. It makes intuitive sense that the best salespeople would be the best candidates for the sales management population. However, a successful individual salesperson contributor all-to-often doesn’t translate to success in the sales manager role. In our study, 75% of the sales managers missed their revenue targets and were getting fewer than half their sellers to quota. Something is amiss. Why are so many managers failing? What can we do to address this problem and where does sales coaching come into play?
What can be Done?
The first thing we must do is challenge the conventional wisdom we’ve been governed by for decades. The most common beliefs about sales coaching are that the most successful sales managers spend more time coaching their salespeople, and that they do the majority of this coaching in the field. These two beliefs form the holy grail of sales coaching wisdom – and they are wrong. “What?” you might be thinking. “Really? No, I don’t believe it.” Well, it’s true, as our solid research reveals. In our study, the lowest performing managers spent more hours per month coaching than the highest performing managers. The highest performing managers spent 17 hours on average per month coaching their sellers, whereas the lowest performers spend 24 hours per month. The low performers also spent more time in the field with their salespeople than their organizations required. Not so for the high performers, who spent about the required time, or slightly less. Yikes. What does this mean for the state of sales coaching?
In my next column, I will begin to unpack the coaching practices that allowed these high-performing managers to get 30% more of their salespeople to quota. I will share the real insights that came from our exhaustive study, many of which were both surprising and contrary to conventional coaching wisdom. I hope I’ve have sufficiently piqued your curiosity and that you will take this exciting journey with me to dramatically improve your sales coaching prowess!