According to an article published in this month’s Harvard Business Review, CEOs are spending more money on their sales forces but getting the same old results. Only one in three working salespeople is considered to be “consistently effective.”
Unfortunately I wasn’t surprised at these findings but continue to be perplexed why so many very smart executives continue to invest in hiring and retaining people who can’t meet expectations.
Worse, why would an employer want to retain a poor performer and continue to throw good money after bad? It’s not only the poor ROI that’s a problem but 63% of the salespeople in the study actually drove down performance. Consider these additional statistics:
- Only 9.1% of sales meetings result in a sale.
- Only 1 out of 250 salespeople exceed their targets.
Retaining poor performers doesn’t just translate into missed opportunity but the loss of sales a company had within their grasp. When you add up the salaries, travel, marketing, and benefits, the cost of lost opportunity is huge. Even if the average cost of a meeting is $160, it takes $1,760 of profit per sale to cover the cost of a failed sales meeting!
The study used for this article categorized 8 behavioral types and how well they performed in 3 important sales activities: securing next steps from customers, closing to the next step of a deal, and closing the deal.
The 3 types of salespeople that consistently met their numbers were the Experts (9% of salespeople), Closers (13%), and Consultants (15%). The Experts consistently outperform their peers and keep customers happy. The Closers pull off big deals, but more in product than service sales. And the Consultants build their success by listening, then solving client problems.
These 3 sales types scored 7 or better (out of 10) when rated in each of the following skills related to sales success:
- Customer interaction
- Rising to the challenge
The other 5 sales types (Storytellers, Forusers, Narrators, Aggressors, and Socializers) did receive high marks for the following skills: Presentation & Rapport, The Sales Pitch, and Storytelling. The problem is that none of these skills seem to consistently convert prospects to customers. In fact, several of these had higher correlations to poor performance than sales success.
Who is the least effective salesperson? The Socializer who has the gift of gab, but does it at the expense pitching the sale and dealing with customer objections.
Despite these findings, many, if not most organizations, still hire on presentation and closing skills, not the ability to engage customers and compete in a dynamic, complex environment. Fortunately, hiring the right sales skills in the first place improves significantly with use of sales skills and pre-employment tests to measure a candidate’s preferences and potential toward skills that matter verses relying on the old dog-and-pony show.