Sales coaching is finally heading in the right direction

We are just a few days into 2018. It’s a good opportunity to review your investments in sales enablement. How much do you invest in your salespeople and your channel, and what do you invest in your sales managers?

If you don’t invest in your sales managers right now, or if the investment has nothing to do with sales coaching, then I strongly recommend that you read this blog post. We will review how organizations approach sales coaching today and the potential two-digit performance impact on sales performance if you implement sales coaching properly. You may decide to rethink your investments! 

Organizations begin to improve their coaching maturity

Let’s first look at CSO Insights’ 2017 Sales Enablement Optimization Study and organizations’ approaches to sales coaching. For many years, around 50% of study respondents have reported that they leave coaching up to their managers. We all know what this means: nothing will ever happen. If there is no coaching culture, if coaching is not even an articulated guideline – “this is what we should be doing” – sales managers are usually neither developed nor supported to coach their salespeople.

In 2017, we finally saw a strong uptick in formalized coaching: The random approach where coaching is left up to managers decreased from 47.5% in 2016 to 34.7% in 2017. Organizations moved to an informal approach where coaching guidelines were available, but without a defined and formally implemented coaching process. This informal approach increased from 25.5% in 2016 to 35.0% in 2017.

The good news is that organizations are shifting from random to informal approaches to sales coaching. The bad news is that significant performance improvements can only be achieved with a formal or even dynamic approach to sales coaching. That means that 69.7% of organizations don’t leverage the potential to improve their sales performance significantly.

Only 30.3% leverage the potential of sales coaching (compared to 27.0% in 2016) as they apply a formal or even dynamic coaching approach where coaching areas and the coaching process are defined and implemented. Sales managers are expected to coach accordingly, and there is a formal effort to develop their skills. Periodic reviews help optimize processes and guidelines. Dynamic means that the coaching approach is also closely connected to the sales enablement approach to ensure reinforcement and adoption of the initiatives for salespeople.

Dynamic coaching delivers the most significant performance impact: a 27.6% improvement in win rates for forecast deals.

Year by year, we see a significant performance impact of sales coaching on win rates for forecast deals and on quota attainment. The average win rate in our 2017 study is 51.8%. As with the 2016 data, organizations with a random approach to coaching didn’t even achieve average performance (43.6%).

To be very clear: “coaching at random” is not a strategy; it’s a recipe that always leads to low performance. The win rate performance gap of 8.2 percentage points (an actual decline of 15.8%) represents the costs of doing nothing.

An informal approach is an improvement over random. It helps to achieve almost average performance (50.9%). But the informal stage has to be formalized as soon as possible to justify the initial investments in sales coaching.

Only formal and dynamic approaches to sales coaching lead to a significant increase in win rates for forecast deals: 58.8% with a formal approach and 66.1% with a dynamic approach. You can easily see the percentage point differences in the charts.

With a formal coaching process, win rates can be improved by 13.5%, and a dynamic coaching process can improve the same metric by 27.6%.

Maintaining a random approach to sales coaching, or doing nothing, results in below average performance. Investing in a formal coaching or dynamic sales coaching approach pays off: the performance improvement shows up to 27.6% better win rates.

Such a performance improvement requires enablement leaders to connect coaching approaches to their enablement frameworks to ensure adoption and reinforcement of the initial investments in salespeople. Most importantly, it requires enablement leaders to develop and equip the sales managers at the frontline adequately, especially their coaching capabilities, to achieve performance improvements sought by sales leaders everywhere.

Questions for you:

  • How do you approach sales coaching in your organization?
  • What are your next steps to evolve your coaching approach?
  • What improvements do you experience with sales coaching?

 

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