Apr 012012

Sales people, on the whole, are still underperforming with around 1 in 2 missing goal.  This performance places increasing pressure on business goals and the softer matters like culture and team work. Firing and rehiring is the initial knee jerk approach to improving sales performance.  Yes… replace them… but only if your 100% sure they are the problem.

Unfortunately, many organisations are chiselled from the old school approach, which is understandable considering most leaders are baby boomers. Additionally, the organisation is also likely to have a poorly aligned Revenue Engine®. Learn what a Revenue Engine® is here.

The point we are exposing here, is that if your organization has some degree of poor revenue performance and thinks the thing to improve is in fact the actual selling resource… then think again. It does make sense to assume poor sales results are a reflection on the sales person.  That is true but only to a degree. Time and time again, organisations are losing good selling people due to their internal inefficiencies. These inefficiencies are the basis of building and managing a revenue engine and impact sales performance from many angles and on many levels. Focusing on your recruitment, may not be the best way.

In reality, firing and recruiting another sales person is very costly when you quantify the total loss in productivity, loss in customer engagement and reputation. Research conducted by Chandler Macleod Group concluded the cost to replace a poor performing selling resource could equate to over $1M in a moderately complex selling environment. (someone selling technology on a base salary of just 100k)

The case for pinpointing the root cause to poor revenue performance is based on this consideration. There will be some symptoms that your selling resource is not the problem, for example;

  • Sales spend more than 10% of their time prospecting
  • Customer retention is poor
  • Monthly lead generation quota’s don’t exist
  • New staff need to “hit the ground running”

Selling resources are a huge investment to any organisation and yet are at times the most alienated, especially when poor sales results are on the table. So, before you start thinking that you may need to look into recruitment and replace a selling resource, ask yourself this simple question; “Is there any chance the sales rep doesn’t have everything in place to hit target?”

Maybe start with the symptoms offered earlier.

If there is any sense that you may answer “yes we may not have everything in place”, then you may be about to spend more money on a very short term answer. Avoid this by knowing where your blind-spots are to revenue performance.

You may be better off investing those resources (effort, time & budget) on something else… and that shouldn’t be sales training either.