Closing the Sales Performance Gap
What would you do if you were told almost half of your sales team would not reach quota this year? In the U.S., only 58.4% of sales reps reach quota – not what sales leaders want to hear about their teams.
In fact, sales leaders are feeling the pressure; the average tenure for a VP of Sales has declined and now only stands at 19 months, or just over a year-and-a-half. This timeframe, as you can imagine, does not leave much time for VP’s to effect change or implement new policies at respective organizations.
How did these two trends happen, and how exactly do they correlate? As the “sales performance gap” continues to grow, that being the gap between your best performers and your average sales reps, the following issues arise that perpetuate a pattern of just barely missing quota and therefore resulting in decreasing tenures within organizations.
Rep Turnover Rate
The most concerning issue for sales teams is good reps falling just short of the quota. When a rep is performing well but not great, they are likely to leave due to their frustrations, not because their role wasn’t a good fit. What these reps need is proper and better coaching to give them that final push to reach quota—especially considering that on average it takes $30,000 and seven months to onboard a new salesperson. Not to mention that when these reps leave, they are often replaced with someone similar, and the cycle continues.
Cost of Revenue
The gap between high performers and most of your team increases the cost of revenue. The cause? Individual rep effectiveness. Even if your team is just slightly underperforming, the cost of revenue aggregates. If qualified opportunities are being fed to your team—and they aren’t properly equipped to turn these opportunities into revenue—they will go through more deals to find a winner, and in turn, lengthen the sales cycle.
Further, once reps do come across a deal, the opportunity will likely be smaller in size. The problem then becomes one both of quantity and quality. A lack of rep effectiveness not only means you are not closing enough deals, but these deals aren’t the big fish that you’re looking to catch.
Closing the Performance Gap
In light of these statistics, the first step in combating these trends – and closing the sales performance gap – is to focus on improving your average reps’ effectiveness over the phone. A phone conversation dictates which way an opportunity will go. A well-conducted sales conversation can turn a buyer one way or the other, and more effective conversations mean more deals won and greater revenue. Because small changes can have a real impact on the greater problem.
So, as a sales leader, your main priority should be slightly improving the performance of your good reps; those that are neither superstars nor stragglers. This group is unique because they possess potential and room for improvement, two things that your top performers and lowest performers do not possess mutually.
When coaching this group, focus on conversational (qualitative) data. Analyze conversations with speech analytics and identify behavior patterns such as tone of voice and keywords that do and don’t work. Know who spends the most time talking on the phone and who’s the best at getting the optimal outcome on the phone. And then use this data to replicate the conversations of your most successful reps across your team.
The differences between your good and great come down to one thing: your ability to really connect via the phone with your customer. Phone data is the richest source of intelligence for managers, so use analytics to your advantage to close the visibility gap into your team’s performance, and from there begin closing the sales performance gap that is preventing your team from reaching quota and other goals for 2018.