| By Chuck Schaeffer
A Systemic Approach to Increase Sales Performance by 80%
There's a long standing myth that your top 20% of sales staff deliver 80% of the sales. However, that statistic is not supported by the research. CSO Insights offers the best sales performance research available and when I recently spoke with CSO Insights partner Barry Trailer he reaffirmed that as measured in their annual Sales Performance Optimization research studies, 20% of sales people pretty consistently deliver just over 60% of sales revenues. Understanding this figure is important when in implementing systemic improvements.
The Top 20%
These are your career sales professionals. They are often lone wolfs and are content to operate autonomously. They use their sales managers to co-strategize sale opportunities, expand their thinking and acquire access to company resources that can be applied to sale opportunities. They embrace knowledge and are particularly adaptive. They learn from most every deal, they adjust and they get better. They don’t need the company’s call sheets and target account plans as they naturally exercise these concepts in ways that work best for them.
This group has the highest potential for near-term revenues — making them the go-to when incremental revenues are needed in short order.
Sales managers must treat this group differently. They can be poached at any time so if they're not feeling trusted or connected to the company they're vulnerable to competitors. Displaying their performance in a sales leader board for all to see gives them a public recognition they appreciate. Micro-managing these professionals is a sure fire tactic to induce their job search.
Moving the Middle 60%
The middle 60% of your sales force offer the single biggest upside challenge and opportunity.
The challenge is exemplified by the fact that they are not in the top 20% and are often okay with that. For too many in this group, as long as they're not in the bottom 20%, they feel safe and become complacent. More often than not, they won't self-initiate change, so it becomes critical that their sales manager imposes needed change in a positive way. This group often includes sales reps that are relatively new to the company – which itself makes them more susceptible to positive change.
The opportunity here is to move members of this group into the top 20%. Their future as career sales professionals is heavily influenced by their sales managers. Good sales coaching, mentorship and personal development – and of course rigorous sales performance review with actionable objectives – offer the single biggest opportunity for the company to increase revenue performance.
When considering the biggest impact to top line revenues the middle 60% represent the biggest pool and upside opportunity. Research from Qvidian shows that a 5% improvement among the middle 60% of your sales force can deliver a 91% greater revenue impact than a 5% improvement among your top 20% of the sales force.
Because this group is largest in number and offers the greatest upside potential, sales managers should be investing the bulk of their time here. It is important to recognize that members of this group are going to fill the vacancies left by the top 20% who generally leave voluntarily (often to competitors) as well as the bottom 20% who move on for other reasons. Treating the middle 60% as a farm team will help sales managers mitigate members from falling into the bottom 20%, identify potential stars, advance many of the group's members and enable the company to better accommodate the inevitable losses of the top producers.
The Bottom 20%
Far too many sales managers spend around 80% of their time managing the bottom 20%. It's somewhat understandable as this is where the biggest challenges and problems reside, but it's a poor choice in terms of time allocation and does not deliver the biggest revenue impact.
The reality is that much of the bottom 20% are hiring mistakes, turnovers in waiting and disproportionally high consumers of scarce sales management time. They're heading for resignation or termination. Sales management often drag out the inevitable because they're nice people and have families to support.
However, dragging out the inevitable only exacerbates the problem. When bottom performers eventually leave the company the sales manager recognizes they really checked out several months ago and have just been buying time until the next job was found.
I'm not suggesting that management rush to employment separation, but I am suggesting that managers don't look the other way until the problem can no longer be tolerated. It's important to make a good faith effort for those bottom performers willing to step up. Sales managers need to assist by diagnosing their activities and making specific recommendations — often backed up with a Performance Improvement Plan (PIP).
My experience has been that most bottom performers we’re never destined to be sales professionals but for whatever circumstances found themselves in the role. If you help staff recognize they are not personally suited for sales, you accelerate their progress to whatever their life calling actually is.
One big method to minimizing the bottom 20% is improved hiring. Most of the people in this group should never have been hired in the first place.
The Point Is This
There will always be a top 20% and a bottom 20% of sales performers. However, applying specific sales management tactics to each of these tiers can add value to the top sales performers, elevate some of the middle 60% and mitigate the bottom 20% in a way that actually skews the bell curve toward significantly improved sales force performance.
If you calculate the revenue impact – either as a forecast for this initiative or after the fact – you will find that moving about 5% of the middle 60% to the right will have a multiplier effect, capable of growing top line revenues in excess of 80%.