It’s sales game halftime and the alarm bells start to ring in some sales executive offices!
Are we on plan or are there any deviations and gaps?
The statistics don’t lie: only 51.3%(1) of the Sales Executives are able to quickly and accurately measure team status. Forecast Accuracy is at 43%(1) and only 57.5%(1) of the Sales Reps meet their quota. Finally plan attainment is at a low 83.5%(1).
(1 Sales Force Demographics 2016, CSO Insights; a US based consultancy firm collecting sales success data to help sales organizations to improve performance)
Recently I experienced a similar situation with a sales executive in a discussion about Sales Performance. His situation: „We are a bit ,Short‘ with numbers! I should reach my goal of 10% revenue increase and need to provide answers how we fix the problem!“
The sales executive opened up his heart and looking at important performance measures revealed the dilemma. Compared to other market participants the situation was:
- the amount of active projects was too small
- the order volume were too low
- close rates are beyond bad and evil and
- opportunity cycle time to close deals is not known
Sales Executives ask at that point immediately for the shortcut to ensure success. „We need to double our efforts“ as key message is not enough!
The important first step: develop motivation to actively approach change!
The potential of increasing sales performance can be well calculated in a formula with four components:
(# Projects x deal size x close rate) / deal cycle time = 1
Motivation is always developed when an emotional positive outlook can be justified logically. And it supports the question of what needs to be done in concrete terms for the number of projects, deal sizes, close rates and cycle time in order to reap the potential for improvement!
My Sales Executive assessed the potential on the basis of his subjective observation of each team member. To work on 10% more deals (factor 1,1 in the formula), take the whole product portfolio into play and reach 5% more volume per order (factor 1,05) and increase the close rate by 10% (factor 1,1) by improving the focus on decision makers, added value and processes. Thus, a performance increase of 27% could be achieved and the first half year can be reasonably compensated.
The second step: create credibility by validating the potential improvement.
What knowledge gaps are present? Where to start action first? What skills and competencies are required?
For that we used the sales performance analysis, which was mentioned in the last blog posting. The sales performance analysis assesses four areas of expertise: sales-procedures, job-related knowledge, dialogue skills and personal settings.
We found gaps in professional sales work, which has to be based on sufficient market orientation, knowledge about the decision making process and how assigned tasks are carried out efficiently. Further we found gaps in professional knowledge, which needs to cover solution orientation and skills to avoid price-driven deal closing. Dialogue competencies would enable customer intimacy and how potential customer can be motivated to act. All together it would allow to understand customer needs far better and to develop added value, which can be positioned and differentiated. These are important prerequisites to get in touch with the decision-making level and currently not given at an impacting level.
Result: This provides an objective foundation to explain status and action to the management team and the sales team. Actions to be performed to still make the goal. Or why specific activities are required and what the benefits are for all individuals and the sales team for actively participating and contributing to change.
Many sales executives face similar challenges – regardless of the size of the sales team. Despite CRM applications, BI tools and other recommended supporting functions they do not really understand the business affairs. And they are not sure what needs to be done to stay above the required quota achievement.
During our collaboration the sales executive has learned that change for changes’ sake does not create values! But that a proper analysis as the foundation of change does!
In the next blog post, we take a closer look at the shortcomings in the areas of expertise and which initiatives and activities led the team back into the target range.
What are you doing to get back on track after finding deviations from the original objective? How do you inspire your team to commonly drive the necessary adjustments and actions?
Please comment the blog post! I’m curiously looking forward to read it!