According to an article published in Harvard Business Review, CEOs are spending more money on their sales force but getting the same old results. Only one in three working salespeople is considered to be “consistently effective.”
We weren’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 or are ineffective at demand generation.
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 according to the study, 63% of the salespeople 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 for the salesperson, but the impact on the organization is dramatic. When adding up salaries, travel, marketing, and benefits, the cost of lost opportunity is huge. The study used for this article categorized various behavioral types and how well they performed in 3 important sales activities: 1) securing next steps from customers, 2) closing to the next step of a potential opportunity, 3) actually closing the opportunity.
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, Narrators, Aggressors, and Socializers) did receive high marks for the following skills: Presentation & Rapport, The Sales Pitch, and Storytelling. The problem is, 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.
Despite these findings, many, if not most organizations, still hire on presentation and closing skills, not the ability to discover new customers and compete in a dynamic, complex environment.