Have you heard the one about the high-performing, hard-charging sales person? You almost surely have— he or she is usually bringing in the most revenue, outperforming the rest of the team by a significant degree.
This salesperson is almost always a cowboy of sorts, not following the rules laid down by the organization and certainly not taking the time to input data into whatever sales automation system the company uses.
No matter, though. If it weren’t for this person, and perhaps one or two others performing within striking distance, revenues would be far less.
Or would they? The idea of the lone cowboy sales representative, who does things his way, by gosh, and goes on to land the deal is so well entrenched in corporate lore that few think to question it. But maybe they should.
Good vs. Great
This archetypical hyper-aggressive sales rep is neatly dismantled in a recent report, "The Sales Organization Performance Gap," co-authored by Harvard Business Review contributor Steve W. Martin, who teaches sales strategy at the University of Southern California Marshall Business School, and Nick Hedges, CEO of Velocify, a provider of cloud-based sales software.
The goal of the study was to identify the differences between a "good" sales organization and a "great" one, Hedges told CMSWire.com. The report authors surveyed some 800 industry participants as part of the process. And in doing so, they quantified what many sales leaders have intuitively known for years.
"The best sales organizations have strong leaders who exercise control, monitor team performance, and establish internal processes by which all team members must abide. They employ a “Darwinian” sales culture strategy, where they hire talent of such high quality that it actually challenges the more tenured sales team members to perform at the highest level," the authors noted.
One of the main findings debunked the notion that a company should allow its star sales performer to run free. "When we quantified what made the great sales organizations work, we found the underlying factor was a team process, a team culture."
In fact, he said, the organizations that have a strictly enforced and automated process in place did the best in terms of sales – and not the ones dependent on their star performers.
"The best sales organizations are not a collection of individuals trying to succeed as a team. Rather, they have a high level of morale and camaraderie. They are united for a greater purpose than themselves," the study found.
Underperforming sales, by contrast, according to Hedges, "tend to be based on 'heroics' by the sales staff, who must succeed or sink and don’t necessarily have the necessary infrastructure to support them."
Another differentiator between good and great sales operations is that the latter are quick to recognize a poor fit in the team and rectify it, Martin says. Yes, that usually means terminating employment.
"We found that sales organizations that fired their underperforming sales staff would see their revenues go up, which seems like it would be counterintuitive — without a warm body selling a product, after all, revenues would go down."
However the fact that the person was a bad fit trumped that, he said.
High-performing sales organizations set higher quotas and believe in lower quota attainment than average and underperforming sales organizations: They believe quota attainment should not be easily achieved and quotas are expected to be aggressively set.
Other characteristics of a "great" sales operation, according to the study:
- They set higher quotas and compensate for achievement
- They are not afraid to aggressively raise year-over-year annual quotas
- There is a team mentality and confidence in the company and the team’s capabilities
- The sales managers rate the teams they manage higher
- Teams at higher performing sales organizations tend to have a higher percentage of top performers and a lower percentage of bottom performers
- The sales representatives more closely monitor their lead follow-up process
- Teams describe their sales culture differently than average and underperforming sales organizations
- They have a higher level of morale than average and underperforming sales organizations
- They hold their team members to a higher level of accountability