By now it’s no secret that more and more salespeople are failing to meet quota each year. If we look at the last several years, it’s safe to say that the number has been in the neighborhood of 50%, with win rates around 45% and turnover at 34%. It’s no wonder that 34% of reps are turning over when their win rates and quota-making ability are so poor. But why?
There are a number of factors. Let’s look at the top 5 and discuss how strongly they correlate:
- Salesperson Effectiveness – Objective Management Group (OMG) has very consistent statistics on this that show an elite 6%, another 20% that are strong, and 74% that suck. Based on these numbers, it’s actually surprising that as many as 50% hit their quotas because crappy salespeople hitting quotas suggests that quotas are too low, not too high!
- Sales Selection – It should not be surprising to note that much of the quota-hitting issues go away when the right salespeople are hired. A disciplined, sales specific recruiting process, featuring an accurate, predictive, customizable, sales specific assessment, helps companies hire the right salespeople. OMG’s statistics show that of the companies that use its sales candidate assessments, between 14% and 43% of candidates are recommended, depending on the sales role, its requirements and the difficulty of the position. If we take the average, that’s only 28.5% that are recommended, which is pretty close to that top 26% we talked about in point 1. But that’s just the companies that have honed their sales recruiting processes and use this assessment. The others are probably moving forward with many of the 72% that weren’t recommended by OMG!
- Ramp-up – When salespeople fail, it’s usually quite fast. Most companies assume that the salespeople they hire should know what to do so instead of preparing them for success they set them up for failure. They lack a formal on boarding process, fail to train on messaging, don’t set clear expectations, and aren’t coaching anywhere near the suggested 50% of their time and more with new salespeople. Is it any wonder that so many new salespeople fail? OMG measures a candidate’s ability to quickly ramp (FIOF) up and a score of 75 or better is indicative of quick ramp up. But a fairly small percentage of candidates score between 75-100. What if a company hires a strong salesperson but their FIOF is only 50? We will have a potentially terrific salesperson failing early on unless they get the help they need.
- Training – Most small and medium size companies do not provide sales training and when they do, it’s usually the wrong training, for the wrong reasons, sometimes with the wrong salespeople, and often for the wrong frequency and duration. How can we help the 74% that suck if we aren’t giving them enough of the right training to elevate their game?
- Selling Has Changed – If you aren’t aware of how much selling has changed in just the last 6 years you have been living in a cave. Many of the veteran salespeople that were selling earlier in this century and the last century too, have not adapted to these changes. While they may still be effective with their long-time existing accounts, selling new business has become very challenging.
So have you guessed the common link? There is one role in the company that has a direct impact on all five of these reasons.
80% of them are failing and if you review the five reasons again you can probably see why. Most of their salespeople suck but instead of coaching them up, holding them accountable for change, demanding improvements, replacing them, selecting better salespeople, providing training, and focusing on ramping up new salespeople, they either ignore these issues or are ineffective at addressing them. Why?
Only 18% of sales managers are any good! There is an elite 7%, another 11% that are strong and the remaining 82% suck!
They haven’t adapted to change. They haven’t gotten themselves trained and coached. Many of them don’t have a clue as to what an effective sales manager is supposed to do and the same goes for the VP’s and CEO’s they report to. What should this sales manager really be doing?
You can blame ownership, the C-Level and other executives that sales managers report to but let’s face it. This is the sales profession and sales managers should have the commitment to succeed and make themselves the best. What happens to their competitiveness when they become sales managers? They sure as heck want to hit their numbers but don’t seem to realize that THEY have to improve in order for that to happen. It’s bad enough that they don’t see how important it is for their salespeople to improve, but they aren’t looking in the mirror either.
So why do sales managers fail to improve? My top 5 Reasons are:
- They advertised to senior management that they have the all the answers;
- They think that getting trained and coached in sales management is a sign of weakness;
- They believe that they already know what they need to know;
- They don’t know what they don’t know. And that huge gap prevents them from improving, from coaching salespeople up, from bringing in experts to evaluate, train and coach, and from crushing their numbers;
- They are emulating sales managers for whom they once worked, who were also quite ineffective;
Note to sales managers: We don’t hate you – we love you. We don’t criticize you without reason – the statistics support what we say. We don’t want to see you fail – we want to help you succeed. There are many sales management and sales leadership experts who are ready, willing and able to help – and help in a big way. Just stop being so arrogant, defensive, pretending to have all the answers, and believing that the way you used to do it is the answer to how selling should be done today. Allow us to help and you’ll succeed beyond your wildest dreams.