It's summer so they're digging up streets, repaving roads, and repairing bridges. That leads to epic traffic jams, long commutes and tremendous amounts of frustration. And you're late! I've been doing my best impression of the digging, without the paving and repairing. Ten of my last fourteen articles have been based on Objective Management Group's (OMG) data from the evaluations of sales professionals and like the road work, we're gonna dig some more today!
In this article, we will look to determine whether there is a correlation between sales percentile, sales pipeline and sales performance. And as has been the case with the last ten articles like this, the data is sure to surprise.
OMG includes a pipeline analysis as part of every Sales Force evaluation it conducts. We ask each salesperson 19 questions about four late-stage, proposal-ready/closable opportunities currently in their pipeline. In the table below, the percentage of salespeople who actually had 4 late-stage opportunities on which they could report are sorted by Sales Percentile.
Almost half of the elite and strong groups, representing the top 15% or so percent of all salespeople, had 4 late-stage opportunities while only a third or so of the serviceable salespeople and just 21% of the weak salespeople (half the population) had 4 late-stage opportunities in the pipeline. It should come as no surprise at all that stronger salespeople have more quality opportunities in their pipelines.
The table below shows correlation between sales percentile, sales process and sales performance.
There is a strong correlation between sales percentile and sales process. 86% of the elite salespeople (5% of the sales population) and 70% of strong salespeople (11% of the sales population) have the Sales Process Competency as a strength. It drops off quickly and significantly for serviceable salespeople (34% of the sales population) and dramatically for weak (50% of the sales population) salespeople. Is it any wonder that only 20% of weak salespeople have Sales Process as a strength?
The most interesting finding was in the area of performance.
While the percentages do correlate to Sales Percentile, the way companies report sales performance is insightful. In the table above, read the column on performance backwards. Companies report that 36% of elite salespeople aren't performing. In other words, they believe that they "should do better!" The finding is even worse for strong salespeople where companies say that 43% should do better. Companies say that 53% of the serviceable salespeople are performing and 40% of the weak salespeople are performing. This is crazy and it's all about expectations. Expectations of the best salespeople are incredibly high, while expectations of the crappy salespeople are incredibly low. For example, take a look at this screen shot of one small company's revenue by salesperson, and whether or not the company believes the salespeople are performing.
As you can see, the company says that their top 2 salespeople, generating approximately $20 million between them, are not performing, while they say that their worst salespeople, generating a little more then $6 million combined from 3 of them, are performing. Crazy, right?
Quotas continue to go up for the salespeople who perform until they can no longer hit the numbers. Meanwhile, in a race to the bottom, quotas are adjusted downward for crappy salespeople until they hit a mutual area of pathetic. Some of us intuitively knew that this insanity was occurring, and now we can show proof of this with the data.
We can do so much better than this. Why do so many executives protect their worst salespeople? We hear things like, "Their customers love them." "They serve a purpose." "They have legacy knowledge." "They're family." "I recruited him here from another company we both worked for." "They're not really costing us anything."
If these crappy salespeople and their protective bosses worked in accounting they would have been fired or jailed for this kind of performance!
What will it take for companies to demand the same performance from all salespeople that they get from their best salespeople? Better recruiting and selection, better training, better coaching and better accountability. And what will it take for those things to happen? Don't hold your breath.
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