After many years of working alongside sales managers, it occurred to me that the factors contributing to high-performing sales organizations aren't as clear as they seem to be. Many misunderstood ideologies about successful sales reps and teams reward mediocre performance, which in turn limits revenue growth. By debunking a few of the most common sales myths, I hope to help organizations better position their sales teams for success.
Myth 1: The best sales reps see everyone else as a competitor they must vanquish, including their own co-workers.
Salespeople are naturally competitive, but that doesn't mean that your best performers will be cold-blooded, deal-making machines. While it's good to foster a healthy sense of competition, be sure to promote a team mentality, by rewarding more than just the top performers, and by inspiring confidence in the entire team's capabilities.
In a recent study I conducted with sales industry expert and USC professor, Steve W. Martin, titled The Sales Organization Performance Gap, we found that high-performing sales teams were twice as likely to describe themselves as a "cohesive group of like-minded individuals" than people at lower performing-organizations. Don't encourage your sales reps to focus solely on their personal goals and individual talent, as the best performing organizations will possess a team-based culture.
Myth 2: Aggressively raising quotas will set my team up for failure.
While many sales managers may think it's better for team morale to set realistic, achievable quotas, I have found that aggressive goal setting increases a sales team's chance of hitting and achieving targets.
In my recent study, 75 percent of high-performing sales organizations raised 2014 annual quotas more than 10 percent over 2013 quotas. Average-performing sales organizations were more likely to keep quotas the same and underperforming organizations were most likely to decrease quotas. If you're stuck on how high to set your quota, Sales Benchmark Index recommends focusing on territory potential and the skills of sales reps.
Myth 3: Don't be too quick to fire low-performing reps, they will at a minimum close more deals than if they were not on staff.
No matter the circumstance, it's always hard to let an employee go. And particularly in sales, the manager's mindset is often to keep low-performing sales reps, as they will at a minimum close more deals than if they were not on staff.
But at the end of the day, time is money. Sales managers need to consider whether their organization is losing money in the long run with a low-performing sales rep on their team. In addition, if the sales rep implements poor sales practices, this may be hurting your company's reputation.
So when do you part ways? Our study found the best sales organizations part ways with low-performing sales reps faster. While there should always be some ramp time that varies based on the complexity of the market and product, our study validated that sales leaders should be very clear on expectations for the rep and be quicker to terminate low-performing reps. In fact, 18 percent of high-performing sales organizations indicated that salespeople will be terminated for poor performance after one quarter, compared to only 5 percent of underperforming organizations.
Myth 4: Only a few super stars on my team can achieve quota.
Underperforming sales organizations seem to be operating under the myth that only a few super stars can achieve quota--therefore creating an environment of heroes and zeros. If there are star performers, build on their success by creating strict processes based on their best practice approach so the rest of the sales team can achieve at their level.
A recent study by the Sales Management Association revealed that sales teams that implemented a strong, formal sales process experienced 20 percent higher year-over-year revenue growth than those that didn't. My study also found that high-performing sales organizations ranked "disciplined sales process and systems usage" as the second most important factor separating great from good sales organizations.
Rather than allowing sales reps to create their own approach, implementing and enforcing proven processes across the organization will undoubtedly yield better results.
Now that I've shared my perspective on common sales myths, I encourage you to consider how these ideas may contribute to the performance of your team. I'd also love to hear if there are any other common sales myths you've heard, or any additional characteristics of a high-performing sales team I may have missed.