Only 57% of quota-carrying salespeople made or exceeded quota. Some might say that's a good number.
Unfortunately, it also means that 43% of sales reps are not delivering revenue performance that their managers are counting on.
This information statistic comes courtesy of CSO Insights' Jim Dickie, who has researched the sales profession with partner Barry Trailer for more than 20 years.
This brings us to some best practices for improving sales reps' performance that should not be ignored.
Best practices for boosting sales
Coach for success. For example, adopting a formal practice of sales coaching can raise the number of sales reps meeting or exceeding quota by nearly 10 percentage points. More than 30% of companies surveyed said that they have no formal coaching method, and only 55% of reps make or beat quota. In comparison, 27% said that they have a formal coaching method and 63% of their salespeople hit their numbers or do better -- a difference of almost nine percentage points.
Adapt to change. Salespeople and their managers are rather conservative; they like to stick with what worked before for them, so change happens slowly. Consider how businesses adapt to changing market conditions. When asked if their sales organizations continually adapt their sales process to market changes, just over half, or 52%, said they adapt their practices to change with the market, while a whopping 44% said they needed improvement in this area.
Hire well. Interestingly, only 41% said their organizations were able to consistently hire reps that succeed met or exceeded expectations, while a whopping 50.4% said their hiring needed improvement.
Only 57% of quota-carrying salespeople made or exceeded quota.
Have a sales process. One of the more telling aspects of a sales organization's performance is its ability to formulate and use a consistent sales process.
Using a process gives everyone a standard vocabulary to work with. Terms like qualified and forecasted have universal meaning. When a rep forecasts a deal, it is because all of the steps in the sales process to that point have been successfully completed, and if they have not, the manager has the ability to point out deficiencies in the coaching process.
For 15-plus years, CSO Insights has banged the drum about the need for a formal sales process. After all this time, there is still a 50-50 split between companies with formal and informal processes.
The results are so revealing that it almost defies comprehension why so many organizations still fly by the seat of their pants. Compare a random sales process with a dynamic sales process. CSO Insights shows that vendors with a dynamic sales process win 52% of the time and get "no decision" only 21% of the time. That’s a better win rate by 11 percentage points and a reduction in no decisions by eight points.
Analysis. On the whole, the results of the research indicate that the sales industry captures a great deal of data but lacks fundamental processes in active selling hiring, coaching, and other everyday activities that generate sales success.
Why selling appears to be so disorganized is difficult to explain -- no doubt the cause is a combination of pressure from high quotas, a bias for action, and an implicit decision to give a great deal of professional freedom to salespeople in return for making their numbers. But this latitude might be misplaced, given the large number of people who fail to perform each year. In a way, asking salespeople to manage themselves is like expecting them to know what they don't know.
This ought to be the year for businesses everywhere to assess sales competencies and decide to shore up some deficiencies. As Dickie and Trailer say, "We used to say about CRM and say now about process, 'It's not quick, it's not cheap, it's not easy, and it's not optional.'"
Denis Pombriant asks:
Is a lack of formal process the reason for the failure of sales reps?
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