I recently read a blog post by Dave Kurlan & John Pattison from our partners at Objective Management Group called Salesenomics The Born to Sell Myth.
You can find a link to the post here, but here are several excerpts that I would like to use a reference to my premise. The question is why so many companies doing are so poorly managing, developing and measuring their sales organization. If you look closely, the answer is in the OMG post.
I have bolded elements for emphasis.
Nearly 50% of salespeople are willing to work on straight commission but only 7% of companies offer such a compensation plan.
Two of the sales metrics tracked most often are margin at 65% and profitability at 51%. Yet only 6% of companies track cost of a sales call. Why do companies who care about margin and profitability not care about the cost of a sales call?
Only 34% of companies track win rates, 32% track account retention, and 9% track the percentage of meetings that close; yet 57% track the percentage of salespeople under/over goal and 47% track their top opportunities. Why would they track their top opportunities but not care about meetings that close or win rates?
49% of companies track the number of opportunities in their pipeline yet only 27% track the quality of those opportunities. That leads to the low win rates that companies are not really tracking! Could it be by design?
Sales managers with strong coaching skills are 230% more likely to have elite salespeople working for them! If that doesn’t make a case for developing coaching skills, I don’t know what does.
New salespeople with no sales experience – born to sell – have a sales percentile score of 32 with an average Sales DNA score of 61 and an average Will to Sell score of 60. They fall into the very weak category! Compare that to salespeople with 5-10 years of experience – trained to sell – who have a sales percentile score of 58 (182% higher) with an average Sales DNA score of 67 (110% higher) and an average Will to Sell score of 66 (110% higher). Trained to sell beats born to sell.
The Forest through the Trees
As usual the OMG data on sales organizations is brilliant. OMG has evaluated or assessed 1,862,917 salespeople from 28,040 companies in 123 countries.
There are many comments and correlations we can make about the data published in this post. However, I would like to take a couple of steps back, and ask you to look at the metaphorical forest.
The data is from a very large sample across the entire planet. I have to wonder why the forest is missed by so many Leaders.
Why do so many companies measure the wrong sales activities? How come CEOs and Sales Leaders allocate resources incorrectly? I think the answer is unbelievable simple, and very straightforward to correct.
CEOs, Vice Presidents of Sales, Sales Directors are not thoughtless or irresponsible. I believe they do not understand their sales force. Leadership is taking action, looking at dashboards, providing training, but much of it is ineffective and being applied in the wrong areas. Consider the data cited above, the proof is in the results.
Let’s pick one of the easiest to understand – good sales managers attract and retain more top salespeople. Most companies we encounter have no idea what their sales managers should be doing. The front-line sales manager often does not have a mentor, management training, or help establishing the appropriate sales activities that drive the company’s sales strategy.
Just go sell more is not a strategy folks. You ask salespeople to do different things and coach around different competencies based on the objectives and strategy. The activities to manage are different if you need to gain Wallet Share vs. Market Share vs. Roll Out a New Product.
Regardless of the size of your organization, leadership must understand what the capabilities of the sales organization are. It might not be the salespeople, it might be the sales managers or that leadership is measuring the wrong metrics.
Leadership must understand the strengths and hidden weaknesses of the salespeople and sales managers? Are the metrics leading or lagging indicators? Do the sales systems & processes support the company growth initiatives?
A Better Solution
There are five “buckets” in a sales organization, and the CEO or business owner needs to understand how they fit together, if they want to move the needle. By the way, it does not matter if the company is a $10mm or $100mm a year, they have the same buckets and the similar challenges.
The 5 buckets are Salespeople; Sales Management; Sales Process and Systems; Sales Hiring; Sales Leadership.
Our process guides you to revenue growth. It starts with Understanding your Sales Organization & answering these questions:
- Can the sales organization can be more effective?
- How much more effective can they be?
- What resources will be required to be more effective?
- How long will it take?
If you are serious and want to be ready for the next economic down turn or serious about growing your business today, maybe we can help. It starts with an Email to request 30-minute phone call. email@example.com we will make it easy to schedule the time.
Would you like to learn more about understanding your sales organization? Click here.
Would you like to see how salespeople score in each of the 21 sales core competencies? Click here.
Maybe you are hiring salespeople and would like to learn a about a tool that is predictive of sales success. Click here.