Great News! The Latest Data Shows That Salespeople are Improving

Posted by Dave Kurlan on Wed, Jan 23, 2019 @ 18:01 PM

breaking-news

Some really terrific news came across my desk this week when John Pattison, Objective Management Group's (OMG's) COO, showed me two graphs he had created.  For the first time in recent memory, salespeople as a profession GOT BETTER!

That's right, when we compared the results of the 85,000 or so salespeople that were evaluated in 2018 to the 80,000 or so salespeople that were evaluated in 2017, there was a measurable improvement in overall scores!

Let's review the two graphs below.

In the first graph below you will see the that the blue plot line for 2018 has moved to the right for the middle 50%.  

Sales Percentile 2018 vs 2017

The next graph presents a more familiar looking bell curve. The move to the right for 2018 (shown in blue) is even more apparent in this graph.

Sales Index 2018 vs 2017 v4

It might not seem like much but there are two significant points to consider:

1. The lion's share - probably 99% of this data - is from salespeople and sales candidates prior to receiving professional sales training from any of OMG's partners.

2. An average improvement of 2% by the middle two quartiles is significant.  Remember, this is an average increase for the middle two quartiles (the IQR).  The 2% average is also affected by which company provides the training and coaching and which sales process and methodology are selected.  If 80% of revenue comes from the top 20% of salespeople, then the middle we are talking about here produces about 20% of the revenue. A 10% improvement represents a 33% increase in revenue so a 2% increase in effectiveness would yield a 6% incremental increase in revenue.   For example, suppose you run a $20 million company with a 33% margin and you improve revenue by 6%. That's an increase of $1,200,000 on the top line and $400,000 in gross profit.  Most businesses will take that incremental improvement on top of their expected year-over-year organic growth.  Often times, that improvement is the result of being more effective at selling value and in addition to being 2% more effective overall, salespeople are improving margins by 5 points or more.  In our example above, the gross profit would increase to $456,000.

What can we attribute this improvement to?  If I had to point to one thing, it would be that the coaching by sales managers is finally starting to support, rather than undermine, sales training and sales process.  I'm sure you have your own ideas as to what has moved the needle.  Add your comments to this discussion on LinkedIn.

Finally, we have evidence that the work being done to improve the capabilities of professional salespeople is paying dividends.

Image Copyright iStock Photos

Topics: Dave Kurlan, sales revenue, revenue growth

The Crucial Channel Sales Strategy You Can't Get Wrong

Posted by Dave Kurlan on Thu, Oct 29, 2015 @ 10:10 AM

Our business is different.
Our salespeople are really good. 
We have a sales process. 
We sell consultatively. 
We don't have a sales force - we sell through a channel.

Those statements represent the 5 most inaccurate things we hear every day from executives before they become clients.  I say they are inaccurate because each statement is invariably proven to be incorrect after we evaluate their sales force.  If we take the 5th statement, break it apart, and make it two statements, then I could make a case for each being a true statement, but not when taken as a single statement of fact.  They "sell through a channel" is very easy to agree with.  They "don't have a sales force" becomes easy to agree with because channel salespeople are quite often among the weakest salespeople we see anywhere!  But there is a larger, more important issue with the channel statement. Whether or not you currently employ channels as part of your goto market strategy, you must understand this one crucial strategy which, if you get it wrong, absolutely sabotages your results with a channel.

Executives tend to believe that there is a major difference between selling directly to their customers versus selling through their channels. In reality, what is it that is so different?  When selling directly to a customer we’re trying to persuade them to buy what we sell.  When selling through the channel we’re trying to persuade the channel reps to sell what we sell.  The commonality though, is that we are trying to persuade them to do something.  Whether it's buy what we sell or sell what we sell, the only real difference is where the money ends up coming from!

The answers to "why you should sell more of what we sell" and "why you should buy what we sell" are similar.  Their respective reasons for taking action may be different, but the overall sales approach is identical!

The problem is that most companies view their channel salespeople as channel managers despite the fact that the channel managers don't actually manage anybody or anything.  The title reinforces inappropriate beliefs, behaviors, activities, messaging, questions and outcomes.  How would things change if their titles changed from channel manager to salesperson in charge of getting reps to sell more of our stuff?

Let's not disguise what we expect our salespeople to accomplish. Providing them with superficial titles that make them feel important, but mask or change expectations, does a huge disservice to all.  Call them what you want them to be! 

I don't write about channel sales nearly as much as I should, especially where so many of our clients sell through channels.  If you want to read more on channel sales, you might enjoy this article about the 10 biggest problems with channel sales.

Topics: Dave Kurlan, selling tips, sales revenue, channel sales

What Would You Do? Sales Force Attempts to Maintain Status Quo

Posted by Dave Kurlan on Mon, Jan 06, 2014 @ 04:01 AM

wrong stuffWarning - this story is disturbing and contains actual quotes from its participants.

The president of a small company, suffering from years of declining sales, asked us to evaluate his small sales force (3 salespeople and sales manager).  He hoped that our data would prove, both to him and his small sales force, that they could grow their revenue to the level of their peak years.

30 days later, when we met to review the findings from the sales force evaluation and answer his questions about potential performance improvements, there was some good news, but most of it was bad.

The good news was that with time (30 months), higher expectations, along with some training and much better coaching, his goals were achievable.  The bad news was that his salespeople were seriously among the worst we have ever evaluated and his sales manager, not much better than his salespeople, seemed disconnected and disinterested from anything other than managing his existing personal accounts.  Did I mention they were the worst we have ever seen?

We also produce individual sales and sales management evaluations for sales team members so that they can better understand their selling strengths and skills, and begin to overcome their selling challenges.  We always ask them to provide some feedback, some of which makes its way back to us.

Objective Management Group (OMG) has evaluated more than salespeople from more than 10,000 companies.  It isn't unusual or unexpected for a salesperson to disagree with a finding or two.  After all, if they were aware of their skill gaps and challenges, they might have attempted to work on them by now.  But in this particular company, everyone on the sales team believed that their sales and sales management evaluations were wrong.  According to this exceptional group of salespeople, all underachieving to the tune of more than 100%, OMG doesn't understand selling...but they do.

Here are just a few of their comments:

From the sales manager:

"First of all, management growth potential of 71%?...this is insulting and demeaning. I seem to have performed pretty well everywhere I have been employed for 44 years while providing pretty well for my family at the time. This is unbelievably pathetic."  [Note - 71% growth potential means he can improve that much and he is deflecting his and the team's pathetic results on our findings.  He also said the following:

"I don’t take responsibility? I do not handle joint calls effectively? How does he know? To my knowledge he has never been on a sales call with me or interviewed me. I do not have a selling system? Ever hear me talk about SIHBC which was taught to me by P&G over 40 years ago..."  [Note - this sales manager is still operating as if it was 1973 and that's what his salespeople were taught to do.]

From his salespeople:

"It's all crap" [Note - The strengths and skills that we identified must be crap too]

"You do not understand our industry.  I am the entire sales department, service department and customer service department for our company."  [Note - he is a bit overimpressed with himself.]

"My sales numbers could improve but my history has proven my abilities."  [Note - another one stuck in the past.]

"Too much talking - really?  Isn't this what we are supposed to do?"  [Note - like I said, stuck in the 70's.]

"The report said I do not have a “consultative sales approach”.  That is what we do every day.  We try to sell value and problem solve.  We do not sell “price” but we sell better results and we do save them money even if our [their products] cost more."  [Note - this salesperson believed that telling people what they should do and why they should do it equates to a consultative approach.]

*******************************************************************************

This isn't normal or expected, so why did it happen at this company and what does the future hold for them?

This is what can happen when salespeople have zero concept of selling; when knowledgeable, technical people are moved into selling roles without being trained to sell; when the sales manager is more interested in selling than managing; when the president doesn't hold the sales manager accountable; and when there isn't a sales culture.

If the president of this company gets serious, replaces the sales manager with a motivated, committed and talented sales manager, and hires strong salespeople to work for the new manager, this company can thrive.  On the other hand, if he sits back and hopes for the same dysfunctional team to suddenly change their behaviors and performance, he will be extremely disappointed.

Was OMG wrong?  Yes!  We predicted that this group could be developed, trained and coached, but the sales manager-led rebellion against change from the status quo undid all of that.  Were we wrong about how bad this sales team was?  Not a chance.  They were statistically at the bottom of all sales teams.

What would you do if you were the victim of a sales manager-led rebellion against change?

Topics: Dave Kurlan, sales force evaluation, sales training, sales management, sales improvement, sales revenue, sales assessments

What the Huge Patriots Win Teaches us About Sales Momentum

Posted by Dave Kurlan on Mon, Nov 26, 2012 @ 12:11 PM

pats beat jetsPerhaps you watched the Thursday night Thanksgiving Day football massacre between the New York Jets and the New England Patriots.  The Patriots scored 35 unanswered points in the second period and scored 3 touchdowns in one 52-second period of time.

Unbelievable!

Incredible!

Unheard of!

The more common reaction though is, "How quickly it all unraveled for the Jets."  We heard more of that than, "How quickly it all came together for the Patriots."  That's because humans love talking about people when they are down.  Why talk about how fortunate the Patriots are when we can talk about how unfortunate the Jets are?

Let's focus on fortune for a moment.  If you were watching that football game, it was completely uneventful up until those three quick scores.  It went from uneventful to explosive in just 52 seconds.  The same fortune can be realized by a salesperson, sales team or company, even when it seems that none is forthcoming. That's the point of today's post.  Sales and revenue can materialize very quickly. Momomentum - both good and bad - as in the football game, can build very quickly as well and success is all about building positive momentum.

So, what does it take for sudden sales, monumental momentum and ridiculous revenue? 

Consistency.  You must be consistent - about holding your salespeople accountable for consistently adding the right number of opportunities to the pipeline, moving those opportunities through the stages of the pipeline, following the steps of your sales process, qualifying , and providing both needs and cost appropriate solutions.

The wins (which can come suddenly) build positive momentum and lead to championship years.

Topics: Dave Kurlan, grow sales, sales growth, sales revenue, closing more sales, sales success

How to Interpret Sales Revenue and Economic News

Posted by Dave Kurlan on Mon, Jun 13, 2011 @ 06:06 AM

moneyI am having a disconnect with the bad economic news being reported.  Perhaps these conditions aren't like this where you live and work, but here's what I see all the time:

  • Can't find a place to park at shopping malls because they are jammed;
  • Every flight I take is full;
  • There are lines of cars waiting to purchase fuel at gas stations;
  • The restaurants are packed;
  • Sporting events are sold out;
  • Concerts are sold out;

Perhaps the disconnect between what I see and what is being reported is simply this.  While there are some isolated geographies and industries that are doing poorly, others are doing quite well.  But when we look at the overall numbers, they just don't provide an accurate reflection of what is actually taking place.

We heard that only 54,000 new jobs were created in May.  Shouldn't news of 54,000 new jobs, most created by small and mid-market businesses, be a good thing?  The reality is that there hasn't been much new job creation from blue-chip and other large companies.  The slow job growth is an isolated problem, not a widespread one.

Even the slumping stock market is only a reflection of one segment - investors - and only one kind of investor.  Obviously, the other kind is continuing to infuse huge amounts of cash into growing companies.

And I know the housing market is still slumping. But like I said before, it is a single industry and not representative of the whole.  But the three isolated numbers the government likes to provide us with, stocks, home sales and gas prices drive the overall numbers way down.

As a result, the overall numbers simply don't reflect what is really taking place.  And that brings me to sales numbers.  Do your overall sales numbers reflect what is really going on?

Take a look at your sales revenue by salesperson for the year to date.

Look at the numbers for some of your top salespeople and review the data to answer these questions:

  • What percent of the total represents sales to existing customers?
  • What percent of the total is low-margin business?
  • What percent of the total might include an unusually large, one-time sale which, if taken away, would actually make the numbers unimpressive?
  • Which of these opportunities were in the pipeline for one or two quarters too long, meaning that the revenue was not the result of a recent selling effort?
  • How many new customer opportunities are in their pipeline going forward?

Now look at the numbers for some of your mid-tier salespeople and dig through the data to find these answers:

  • What percent of the total represents brand new customers/accounts?
  • What percent of the total is higher-margin business?
  • Are there any unusually large sales that might skew the results?
  • Is their pipeline going forward looking nice and solid?

If you come up with the answers I am expecting, then you'll see that you must approach the sales revenue numbers with the same degree of skepticism and isolation as you should when listening to economic reports.  The total is not representative of what is really taking place.

Topics: Dave Kurlan, sales management, sales performance, CEO, sales numbers, Economy, sales revenue

10 Steps to Record-Breaking Sales Revenues

Posted by Dave Kurlan on Tue, Jun 30, 2009 @ 06:06 AM

When things loosen up (and things will loosen up) and companies and consumers both begin spending money again, you could be in for a significant windfall.  You may even have some record breaking revenue months if, and it's a big if, you have your sales force doing all of the right things, even while companies and consumers aren't spending money.

Here are ten requirements for having and continuing to have record-breaking months in the not-too-distant future:

1) Over stuff the pipeline.  Just because opportunities are being placed on hold, doesn't mean that you shouldn't put more opportunities into the pipeline.  The sales pipeline is not like your stomach, you know.  It will expand infinitely.

2) Focus on a different metric. The metric that reports closing percentage is skewed right now so ignore it.  Instead, focus on the metrics that tell you how many opportunities are entering the first stage of your pipeline as well as those moving to the second stage of your pipeline.

3) Tighten up the criteria. As long as you're going to pay attention to the percentage of opportunities that move to the second stage of your pipeline, now is the time to make sure everyone understands the criteria for placing an opportunity in the second stage and make those criteria more difficult to meet.

4) Modify your incentive/reward program.  If you have decided to focus on pipeline building rather than closing, reward that behavior with recognition, awards and bonuses!

5) Don't look back.  The tendency will still be to look at closing.  The problem is that once you start looking at it, you'll want to do something about it and there may not be anything you can do. Remain focused on pipeline stuffing.

6) Two - two - two closables in one. The closable stage of your pipeline will have two types of opportunities in it today.  Closable now and closable later.  What they have in common is that for both types of closable opportunities, you have been told that they will do business.  The difference is only in the when.  The later closables need to be nurtured while the current closables need to be closed.  It's OK, even good, to make sure that the current closables don't become later closables.

7)  Diversify.  There is money out there and it is being spent.  The question is whether your target customers are the ones doing the spending.  This is a great time to move laterally into new markets.  Let's suppose you sell trade show exhibits to small and medium sized businesses.  The small size businesses not only don't have any money but they aren't even participating in shows.  The mediums have money but aren't spending it on upgrades to their look.  You can wait it out or you can target a new market segment by moving up to larger companies than your traditional sweet spot, or you can target specific industries that haven't been impacted as negatively, like food or health care.

8) Be a non-profit. When the money isn't rolling in like it's being printed just for you, there is almost a sense that you've become a non-profit.  Well....do what the non-profits are doing right now and ask for money!  You have all of those existing customers that you used to take for granted.  Put the full court press on them, find out how they're coping, learn what's changed in their business and figure out what you can do to help. And ask for money!

9)  Develop sales processes, competencies, strategies and tactics for the tough times.  Selling is not the same as it once was.  You can no longer count on success from glorified order taking and account management. Got a sales force?  You must make it strong enough and effective enough to succeed in these times, not wait for a return to the good times.  We may not see those times again. Invest in a sales development expert and let them help you now!

10) Hire great salespeople.  All of your salespeople will not be able to make this transition and this isn't the time for charity.  Replace the salespeople who won't be able to step up and aggressively hunt for new opportunities.  Replace the salespeople who won't be able to skillfully move those opportunities through the steps of your sales cycle with good questioning and listening skills.  Replace the salespeople that aren't closers. Good ones are out there and you must make the commitment to settle for nothing less.

(c) Copyright 2009 Dave Kurlan

Topics: sales competencies, Dave Kurlan, sales hiring, sales, sales skills, selling, Salesforce, Sales Force, hiring salespeople, Economy, sales revenue

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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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