My company recently did some research, and we found that most sales teams comprise 20 percent high performers, 60 percent mid-range performers, and 20 percent poor performers. The sales performance gap between the top two tiers is one of the biggest problems facing business-to-business sales teams.
It's as if salespeople have collectively bought into the idea that top-tier performers have innate qualities that are tough to teach, like confidence, authenticity, accountability, and drive. That's why teams end up looking for sales managers who are "great motivators" who can "reach" or "connect with" their mentees.
But what we've realized from our analysis of almost half a million sales calls is that that's a vague solution to a vague problem. Here's why the sales performance gap is dangerous, and how to fix it.
Mid-range performers may be costing you more than you think.
The mid-range performers, those who are almost amazing, are a problem. Their inability to move their numbers closer to their high-performing peers has a huge impact on your overall sales figures.
If each middle performer moved their close rate up by just five percent, you'd likely hit and surpass targets. If they don't, that five percent represents a ton of leads coming into the pipeline and dying miserably along the way.
That's a brutal cost of revenue. The middle of the pack costs you a lot more time and money for every deal they close. Unfortunately, they also close smaller deals than their top-tier counterparts. The end result is a terribly high cost of revenue. In fact, it's downright dangerous to a sales manager's bottom line.
Wait, it gets worse. It compounds.
The bigger your sales team, the bigger the problem this sales performance gap causes. That's right. The issue of slight under performance compounds as teams increase in size.
If you have a small team--say five people--the top performer will make up for the three who deliver average results. But if you have a team of 100, the top 20 can't make up the difference for all those in the middle.
There's a compounding factor that most people miss at first glance, but it's real. We've done the math on this one at my company.
People miss quotas. People get fired. That costs money.
Did you know that 26 percent of sales rep turnovers result from missed quotas? That's according to a DePaul University report. Think about how many people that might affect if 60 percent of your team can't move their numbers up, while quotas go up every year. (Sibson Consulting says annual quotas have gone up 7.5 percent per year for the last two years.)
It's painful to think about how that adds up, especially when you factor in hiring costs, compensation, severance, and those hundreds of deals that were never made. The truth? According to that DePaul study, the average cost per turnover in the sales community is $97,690.
Why can't teams close the gap? It's shocking that there hasn't been more focus on it.
Don't despair. It's fixable.
In this day and age, anyone who says you can't measure a vital component of a team's performance is wrong. Yes, complex human elements have long been viewed as difficult to measure, especially in sales.
Though they can be nebulous and tricky, AI has made astonishing leaps forward in this regard. SaaS companies are shifting our understanding of the entire sales funnel, right down to the way reps speak on sales calls.
Software can help identify ideal customers, match them with the right people on sales teams, and standardize sales processes. It can also analyze those human factors that have long been considered unmeasurable in top-tier sales people, and use them to move that middle 60 percent upward.
You can dive deeply into data you've never considered before. Forget about sticking your face underwater to enjoy the ocean. Go SCUBA diving.
Analyze conversations, then increase sales.
Today's software clarifies what works on sales calls, from the right (and wrong) words, to the talk-to-listen ratio, inflection, and best rate of speech. By analyzing the thousands of sales calls a company makes each year, sales managers can understand what sets their top-tier performers apart, and start to coach the middle 60 percent upward.
The result? Total clarity on the human side of sales. That means hitting more quotas, less hiring (and firing), better-trained employees, and clearer tools for sales managers. Imagine the difference that will make to closing your performance gap.