Gauging sales performance is more than making the number
Jan 01 2018
Historically, there was one way to evaluate a salesperson’s performance: whether or not they achieved “THE NUMBER.” Unfortunately, that measure tells you if they were successful last period, not whether they are likely to be in the next. So, it is not a sound indicator of performance.
Getting specific about performance is increasingly important. The market is full of talk about whether the sales profession will evaporate in favor of AI-fueled bots. While that won’t happen in the next few quarters, change is coming and it’s coming fast. Many transactional sales models will evolve to be machine to machine. However, we believe there will always be a need for the human connection in perspective sales-based models where sellers use their expertise to provide value to customers through a deep understanding of business (their customers’ and their customers’ customers’) crafting creative and personalized solutions to complex needs.
That being said, only the best sellers are going to succeed in this very near future. With quota attainment at a five-year low, the time is critical to ensure that every seller you have is maximizing their potential. Today, only 53% of salespeople are making or exceeding their goals.
Performance management deserves a second look. It works in conjunction with hiring, workforce planning and other disciplines as part of a broader talent management system. Yet unfortunately, in many sales organizations, it has been reduced to checking boxes on an annual HR form.
Truly measuring and managing performance helps assess how people are doing against their goals and why in order to drive coaching and development. Importantly, we don’t just mean onboarding of new hires, or exception training for poor performers. We mean the ongoing and perpetual coaching, enabling and development of both salespeople and sales managers (as well as all customer-facing roles).
In our recent World-Class Sales Practices Study, we found that only 37% of organizations agreed or strongly agreed that “our culture supports continuous development of salespeople and sales leaders.” However, a whopping 90% of World-Class organizations report success at this practice. For this development to have any basis, you have to start looking at performance as more than just making a number.
1. Set clear performance expectations for key roles. Start by being very specific, at the capabilities and behavioral level, about what success will look like. What will people need to say and do? What kind of expertise will they need in order to execute on your chosen sales methodology and sales process?
2. Conduct an individual assessment. Conduct an assessment of your incumbent salesforce’s capabilities. What are they doing well? Where are the opportunities to improve? Do this on at least a 180-degree basis (collecting feedback from both managers and the sellers themselves). And be sure to communicate this well.
I once ran a 180-degree assessment with the managers and salespeople of a failing sales organization. When the results came back, there were few to no gaps. This just didn’t pass muster. How could a salesforce be perfect and unsuccessful? Turns out that managers had been told that there was a hiring freeze. They were afraid that they would have to fire poor performers and would not be able to replace them. The feeling was a poor performer was better than them personally having to manage all the accounts.
Make the assessment process very transparent. Make it clear how it will be used and the benefits of candid feedback.
3. Institute individual coaching and development. Use the assessment as a way to drive and align formal coaching. Most (57%) of sales organizations feel like their ability to coach to skills and behaviors needs improvement or major redesign. (2017 CSO Insights Sales Enablement Optimization report). But those who report a more dynamic approach to coaching which is formalized, reinforced and tied to a broader enablement approach are outperforming those who leave coaching up to managers, +27.6% improvement in win rates!
Be sure to give coaches the skills and tools they need to act on the assessment results though. Managers need a formal approach. But today over 1/3 (34.7%) still leave coaching approaches up to managers with no direction or framework.
Ultimately, your goal is for each individual to have a personalized improvement plan to guide their individual development. Eighty-seven percent of World-Class organizations support such plans, versus 40% of sales organizations overall (2017 World-Class Sales Practices Study). Do note that all of your sellers deserve coaching. Coaching an A player may look very different than coaching a new hire. But it doesn’t look like ignoring them so they can “do their own thing.” Recognition is a great form of coaching.
4. Create the organizational support infrastructure to support all the individual plans. Look at the individual strengths and weaknesses in aggregate. Overall, what does your sales team need to be successful? Likely, you will need to invest in comprehensive training curricula, coaching training, tools, aligned content and more. Use a formal approach to sales enablement to orchestrate the creation and integration of performance support.
There are few organizations not undertaking some kind of sales transformation efforts in order to boost their likelihood of success in a rapidly changing customer environment. Your people will be one of your biggest drivers of these changes, or one of the biggest inhibitors. So, it’s worth a renewed and/or different look at performance.