What separates high-performing sales organizations from average and underperforming sales organizations? In order to answer this question, I recently conducted an extensive 42-part survey with 786 sales professionals. Participants were asked to share their opinions on their sales organization and personal details about their own quota performance.
Twenty-two percent of survey participants included top-level sales leaders such as vice presidents of sales, 14% were front-line sales managers who manage salespeople, 17% were hybrid sales managers who sell directly to customers and manage other salespeople, and 47% were salespeople who carry their own quotas.
Study participants were asked to compare their company’s year-over-year revenue growth for the past two years and indicate whether annual revenues increased significantly, increased slightly, remained about the same, or declined. Responses were then analyzed by company name, annual revenue, number of employees, and industry type to ensure data accuracy. Thirty percent of participants indicated they had a high level of revenue growth, 44% had slight revenue growth, and 26% had revenues which were about the same or had declined. The survey responses were then grouped into high-performing, average, and underperforming categories according to these revenue classifications.
The study results reveal there are 15 significant differences between how high-performing, average, and underperforming sales organizations perceive themselves, measure performance, staff their organizations, and operate. Below are five of these key attributes and performance-related metrics that illustrate these differences and the gap between optimum and sub-par sales organization performance.
1. High-performing sales organizations rated the quality of their sales organization higher than average and underperforming organizations.
Twice as many salespeople and sales leaders at high-performing sales organizations rated their organization as excellent as compared to average and underperforming respondents. In addition, 76% of high-performing team members rated their organization as excellent or above average compared to 51% of average and 49% of underperforming team members. Only 1% of high-performing team members rated their sales organization as below average compared to 10% of average and 8% of underperforming team members.
2. High-performing sales organizations employ a more structured sales process.
Fifty percent of study participants from high-performing sales organizations responded they had sales processes that were closely monitored, strictly enforced or automated compared to just 28% from underperforming sales organizations. Forty-eight percent of the participants from underperforming sales organizations indicated they had nonexistent or informal structured sales processes compared to only 29% from high performing sales organizations.
3. High-performing sales organizations hold their team members to a higher level of accountability.
Study participants were asked whether or not they agree with the statement that their salespeople are consistently measured against their quotas and held accountable for their results. Twenty-nine percent of high-performing sales team members strongly agreed with that statement while only 13% of underperforming sales team members did.
4. High-performing sales organizations are not afraid to aggressively raise year-over-year annual quotas.
Seventy-five percent of high-performing sales organizations raised 2014 annual quotas more than 10% over 2013 quotas compared to 25% for average and 17% for underperforming sales organizations. Annual quotas remained the same or decreased for 65% of underperforming sales organizations, 48% of average sales organizations, and only 14% of high-performing sales organizations.
5. High-performing sales organizations are quicker to terminate underperforming salespeople.
Eighteen percent of high-performing sales organizations indicated that salespeople will be terminated for poor performance after one quarter compared to only 2% of average and 5% of underperforming organizations. Seventy-eight percent of high-performing sales organizations indicated that a poor performer will be terminated within a year compared to 63% of average and 52% of underperforming sales organizations. Nine or more quarters are required to terminate an underperforming salesperson according to 12% of underperforming and 9% of average sales organizations while no high-performing sales organizations indicated it should take that long.
The results from this study quantify what many sales leaders have intuitively known for years. The best sales organizations have strong leaders who exercise control, monitor team performance, and establish internal processes that all team members must abide by. They hire talent of such high quality that it challenges the more tenured sales team members to continually perform at the highest level. In addition, weaker sales team members who cannot contribute their revenue share are quickly removed. While the company’s goal may be to go public or reach certain revenue milestones, the greatest sales organizations are on a never-ending mission to prove to the world that they are the best.
Source: Harvard Business Review / Steve W. Martin