What separates high-performing sales organisations from average and under-performing sales organisations? In order to answer this question, I recently conducted an extensive 42-part survey with 786 sales professionals. Participants were asked to share their opinions on their sales organisation and personal details about their own quota performance.
22% of survey participants included top-level sales leaders such as vice presidents of sales, 14% were frontline sales managers who manage sales people, 17% were hybrid sales managers who sell directly to customers and manage other sales people, and 47% were sales people who carry their own quotas.
Study participants were asked to compare their company’s year-over-year revenue growth for the past two years and indicate whether annual revenues increased significantly, increased slightly, remained about the same, or declined.
Responses were then analysed by company name, annual revenue, number of employees, and industry type to ensure data accuracy. 30% of participants indicated they had a high level of revenue growth, 44% had slight revenue growth, and 26% had revenues which were about the same or had declined.
The survey responses were then grouped into high-performing, average, and under-performing categories according to these revenue classifications.
1. Organisational excellence matters
High-performing sales organisations rated the quality of their sales organisation higher than average and under-performing organisations.
Twice as many sales people and sales leaders at high-performing sales organisations rated their organisation as excellent as compared to average and under-performing respondents. In addition, 76% of high-performing team members rated their organisation as excellent or above average compared to 51% of average and 49% of under-performing team members.
Only 1% of high-performing team members rated their sales organisation as below average compared to 10% of average and 8% of under-performing team members.
2. The importance of formal sales structures
High-performing sales organisations employ a more structured sales process.
50% of study participants from high-performing sales organisations responded they had sales processes that were closely monitored, strictly enforced or automated compared to just 28% from under-performing sales organisations.
48% of the participants from under-performing sales organisations indicated they had non-existent or informally structured sales processes compared to only 29% from high-performing sales organisations.
3. Where the buck stops
High-performing sales organisations hold their team members to a higher level of accountability.
Study participants were asked whether or not they agree with the statement that their sales people are consistently measured against their quotas and held accountable for their results.
29% of high-performing sales team members strongly agreed with that statement, while only 13% of under-performing sales team members did.
4. Setting stretch goals
High-performing sales organisations are not afraid to aggressively raise year-over-year annual quotas.
75% of high-performing sales organisations raised 2014 annual quotas more than 10% over 2013 quotas compared to 25% for average and 17% for under-performing sales organisations.
Annual quotas remained the same or decreased for 65% of under-performing sales organisations, 48% of average sales organisations, and only 14% of high-performing sales organisations.
5. High-performing sales organisations fire fast
High-performing sales organisations are quicker to terminate under-performing
18% of high-performing sales organisations indicated that sales people will be terminated for poor performance after one quarter compared to only 2% of average and 5% of under-performing organisations. 78% of high-performing sales organisations indicated that a poor performer will be terminated within a year compared to 63% of average and 52% of under-performing sales organisations.
Nine or more quarters are required to terminate an under-performing sales person according to 12% of under-performing and 9% of average sales organisations, while no high-performing sales organisations indicated it should take that long.
Recommended: Sales Incentives: Based on Profit or Revenue?
© 2015 New York Times News Service.