Why are Half of All Sales Reps Still Missing Quota in a Booming US Economy?

Posted by Dave Kurlan on Mon, Dec 10, 2018 @ 05:12 AM

booming-economy

Around this time ten years ago, the US economy was famously tanking.  I remember it well as revenue at Objective Management Group dropped by more than 30%, almost overnight.  During 2008 and 2009 more than half of all US sales reps were missing quota and considering the circumstances, that didn't seem to shock anyone.  But during a slow crawl back to respectability between 2010 and 2016, and soaring revenue during 2017-2018, the percentage of reps making quota has not only remained flat, but the percentage hasn't even returned to pre 2008 rates.  This article attempts to explain why.

Here are 12 possible reasons that don't attribute everything to the completely useless 80/20 rule:

  1. Companies are setting unrealistic quotas, basing increases on nothing other than the belief that "Our revenue should be soaring too"
  2. The quotas are realistic for the territory but the reps aren't up to the challenge as only 5% are elite, 20% are strong and 25% are serviceable.  50% of all salespeople suck anyway!
  3. As the market for sales candidates has dried up, companies are lowering their standards and hiring crappy salespeople to keep territories staffed.
  4. The wealth of Inbound leads, most of them nothing more than contacts, have made salespeople incredibly lazy.  Only 24% of the bottom half have the Hunting competency as a strength.
  5. Only 14% of the bottom half of all salespeople have and/or follow a formal, structured Sales Process.  In other words, they wing it.
  6. The ever-increasing difficulty reaching decision makers has left salespeople with pitiful pipelines.
  7. Only 10% of the bottom half of salespeople are providing, demonstrating or selling value, resorting to price as they fail to differentiate
  8. Salespeople are still taking a transactional approach to selling instead of learning and embracing the more desirable consultative approach to differentiate themselves from the competition. Only 3% of this group has the Consultative Seller competency as a strength.
  9. Salespeople are mistaking "nice to have" for "must have".  When they only get their prospects to "nice" they fail to create urgency, making it difficult to get decision makers engaged or money approved, with opportunities stalling in the pipeline.  Only 20% of the bottom half of all salespeople have reaching decision makers as a strength, only 9% of that group has the  Qualifier Competency as a strength, and only 22% of this group has the CRM Savvy competency as a strength.
  10. Lack of Commitment - 53% of the bottom half of all salespeople lack the commitment necessary to do what it takes to achieve success. When it becomes difficult, they do what's easiest and most comfortable instead of what is required.
  11. Excuse Making - Even worse, 66% of the bottom half of all salespeople make excuses, rationalize their outcomes, preventing improvement.
  12. Sales DNA - In order to execute sales process, methodology, strategy and tactics, salespeople must have strong Sales DNA. The bottom half of all salespeople don't, as only 3% of them have Sales DNA that is strong enough to help them execute.

If the bottom 50% are this bad in all 21 Sales Core Competencies, then what are the bottom 50% good at?  They may have tremendous product knowledge, decent presentations skills and some great relationships, but they aren't very good at selling.  They are really order takers.  If they work for the best-known company, the low price leader, or the incumbent vendor, then it might be enough. But if they work for an underdog it's simply not enough to get the job done.

Join the discussion of this article on LinkedIn.

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Topics: Dave Kurlan, Consultative Selling, sales process, reps making quota, selling value, differentiating yourself, order taker

How Many Salespeople Made Quota in 2010?

Posted by Dave Kurlan on Mon, Feb 21, 2011 @ 12:02 PM

percentage signAccording to CSO Insights 17th annual Sales Performance Optimization (SPO) study released earlier this month, an all-time high percentage of salespeople hit their quota in 2010.  2,800 companies participated in the study which found that 59% of all salespeople made their quota.

Does that sound right to you?

This study is basically saying that during one of the worst recessions ever, an all-time high percentage of salespeople hit their numbers.  I don't buy it and here's why.

Objective Management Group's data (on more than 500,000 salespeople from 8,500 companies (about 50,000 of them from 2010) shows that only 44% are hitting their numbers - a 15% discrepancy.

Could it be that after such an abysmal 2009, companies lowered quotas for 2010 ?

Could it be that companies lowered their expectations as they completed the survey so their sales forces wouldn't look so feeble?

Could it be that salespeople with existing business spread over a number of accounts - basically functioning in an account manager role -  are capable of hitting their numbers when the quota doesn't go up?  In other words, just because salespeople are hitting their numbers, it doesn't necessarily mean that those salespeople have become more effective, or that they ahave become producers.

There's certainly no reason why even 1% of salespeople would tell us that they aren't hitting their numbers if, in fact, they are; so why else would there be such a discrepancy?

It doesn't really matter.  Of more importance are the following additional findings:

  • Sales hiring is WAY up;
  • Sales training investments are increasing by 9.5 percent per rep;
  • Marketing and sales are still not aligned, with marketing picking up more of the burden for lead generation.
  • Up selling and cross-selling are still issues
  • Emphasis on finding new business

My take away? Optimism is up!

Companies are certainly investing in their sales forces again. I can see that first hand with both of my companies. Objective Management Group is seeing more Sales Force Evaluations and more Licenses to assess candidates than at anytime in the past 20 years!  Kurlan & Associates has more active clients for training and development, coaching, recruiting and selection, sales force architecture and sales measurement and metrics than at any time in the past 25 years.  Why are so many companies looking for help right now?  As the economy slowly rights itself, nobody wants to be left behind and most companies are tired of not getting the growth they need and want.

Closing thought - Today is President's Day.  Select the US President, past or present, that you most admire and pretend you are him.  As that President, how would you use the information in today's article to accelerate your firm's growth?

Topics: Dave Kurlan, sales training, sales candidates, cso insights, reps making quota, sales assessments

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Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog earned a medal for the Top Sales & Marketing Blog award for six consecutive years. This article earned a Bronze Medal for Top Sales Blog post in 2016, this one earned a Silver medal for 2017, and this article earned Silver for 2018. Read more about Dave.

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