Is a sales turnaround worth the effort?8th February 2019
Where are you going to get those increased sales from? Can you squeeze your top performers for that bit more? Could it come from the “middle many” those who look like they’ll do more or less ok but not break any records?
Might it come from the under performers who have either gone off the boil or never reached boiling point? Or maybe as a sales manager, you’ll just pull on your super-hero outfit and get out there and save the day yourself?
It’s a critically important question because according to a recent CSO Insights study only 47.3% of forecast deals were converted. Revenue attainment is still high (thanks to accounts converting, not new business), at 93%, so that means sales teams are hitting quota, but as the report notes: “Often at large cost.”
All of the key indicators in that report: “conversion rates, win rates and quota attainment are all flat. Further, 15 of 16 seller abilities covered in the study show lower performance than five years ago.” For sales leaders, these are troubling indicators.
60.7% of respondents to another CSO study say that it takes at least seven months to bring a new rep from point of hire to full performance. If you look at the time taken to decide that the previous under-performing rep has to go, and then allow for time to arrange the exit and hire the replacement you are looking at least a year of reduced contribution to the revenue goal.
Then there is a key question: “Will your replacement be any better than the last rep?”. Here’s a quote from a sales leader in an email to a recruiter just this week: “Thus far, no candidate has exceeded the median line of one of our current team… In other words, we’re getting more weak candidates,”
So if about half of a sales team are underperforming; if it takes perhaps a year to get a new rep up to full speed and if outstanding new reps are hard to find then it’s got to be worth the effort (and it is an effort) of turning under-performers around.
How to improve sales performance?
Doing more of “the same old same old” probably won’t do the trick. It’s time to innovate. Here are some thoughts on the how of the turnaround – five aspects of sales success to look at:
1. Goals. Are the goals the right size and shape for the individual? Is under-performance less a factor of failed achievement and more of inappropriate targeting? Sure, it may be impossible to change this year’s goals mid-stream but at least you have clarified the issue.
2. Results: Start by analysing the result not just the headline figure but the underlying data, number of deals, average deal size, product mix, customer mix”¦ This will help you focus on the real problems
3. Activity: Getting the activity levels up is the single fastest way of boosting performance. It’s not the only stop on the line but it’s the vital first stop on the train to success. It is possible to achieve at least a 21% increase in performance when the right tools are used to boost activity.
As i-snapshot Chief Scientist Alan Timothy explains: “We also know that the top 25% of sales people (by the number of sales visits made) make twice as many calls as the bottom 25%. Unsurprisingly, when the bottom 25% are shown their performance data, 80% make an improvement”.
I used to think that you should start by changing the capabilities of reps because it took the longest time but had the greatest long term impact. But now I spend even more of my time with sales directors facing the painful daily realities of hitting sales targets I have come round to this view: start with activity.
4. Concentration of focus: The key question here is “Are we talking to the right people in the right organisations about the right things?” In a volatile, Uncertain, Complex, Ambiguous (VUCA) world where low growth may the norm we need to re-select those customers and prospects who will give us the right result for the future. These may not be the same customers who gave us a good result in the past (look out for my “forthcoming post on selection criteria in challenging times”.)
Don’t just focus on the right organisations but on the right people. I was talking to a senior technical manager responsible for the infrastructure and equipment in a major institution. They were explaining that a purchase of under £1000 (which was well within their sign off limit of £15,000) had been referred to the departmental ExCo. If the seller was focused only on the technical manager and had to contact with the ExCo then they were likely to fail with this sale.
Finally, make sure that the product mix is right. Are reps concentrating their focus on the right products and services. Is it time to go for higher value deals or should they going for easier-to-sell entry level offerings?
And let’s add in more element: “at the right time?” Is sales activity aligned with the customer’s buying cycle? The SSO Insights studios referred to earlier indicate that an improvement of one third is achievable when selling takes full account of the customer’s buying journey where they are in their strategic, commercial and buying cycles.
Timing is key.
5. Effectiveness: Activity and concentration of focus are critically important, but without a change in effectiveness it is unlikely that sustainable growth will be achieved. The impact can be very quick e.g. â‚¬1.92 million of incremental income in 3 months measured by 41 actuarial consultants following a coached-in training on “professional selling”.
But it can take a long time. Hear one senior sales leader looking back on his time in front-line selling: “When I was a pensions consultant I joined several training programs. The live case study I focused on was an intermediary which was then generating ~£1m a year. I applied what I learned on that course and (with a lot of hard work) we saw the £1m a year grow into £24m a year over the next 3years. I have no doubt that the training and coaching was instrumental in helping me achieve this”
For business investors, for business owners and for boards of directors, the achievement of the top line sales result is essential. Without the predicted revenues all the other budgets fall over. There is good evidence that many businesses are falling short of their revenue plans. The average achievement of plan for 2015 (CSO Insights) was 82.7%. Of course there may be multiple causes and multiple solutions but now is a good time to diagnose the situation and its causes; formulate new approaches for changing times; develop people and processes; fine tune the approaches and then re-calibrate for the next change in your market place.
Given the time, cost and uncertainty of firing and hiring sales people then it must be wise to do what you can with who you’ve got. Doing what you can means innovating in 3 areas: activity, concentration of focus and effectiveness.
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