Why are only 50% of sales people making quota?

1. Deplorable deployment - only 20% of sales people are hunters. The rest think they are hunters and that is scary. When you give a lead to a farmer when a hunter is needed, you lose business.
2. Leaky leads - even best in class companies suffer from leaky lead syndrome - losing over half of all leads generated to lack of effective follow-up or simple neglect.
3. Questionable quality - most so-called leads provided to sales reps are low-level, unfiltered, poor quality suspects at best. Sales people do what you pay them to do, not what you want them to do; so they are unlikely to cull through 100 suspects to find 3 - 5 prospects.

And of course sales management.

Industry metrics say on average 50% of sales people are average and 20% of sales people in any industry are good or excellent. So if 20% of your "think they are hunters" (we will assume the rest are farmers) suffer the same % distribution model then 4% (or 20% of 20%) should be getting the best leads to maximize results. The big trick once you get the quality leads issue solved is to ensure you have above average amounts of the industry 4% employed on your sales team, you clearly know "who is who in the zoo" in terms of capabilities and performance and you get the 5 leads per 100 to the 4% of sales people who are likely to "move them to cash". Easy right !!

I know it really shouldn't be this simple, but in my experience in supervising sales staff, it's only those sales people who truly enjoy what they are doing and enjoy people who succeed. If you don't have those 2 elements in your profession, you will always perform no better than 50%.

Flippant answer: The Sales quota is too high and not realistic.

Real answer: You hired the wrong person for the job.

If you hire a turkey, train a turkey and motivate a turkey all you will have is a trained motivated turkey.

It is easier to manage an EAGLE than to teach a PIG to fly.

There is a performance management coach in the Seattle area that uses a chart in his presentations. There are three bars in his chart. The first is Performance Goals, the second is Actual Performance and the third is labeled Performance Gap.

Really? Are we serious here? The difference between performance goals and actual performance, which is the root of every quota conversation, is a complex function with a helluva lot of variables. A sales person's performance is only one of those variables, and I would argue not the most weighted, while Performance Goal is often quite arbitrary and, therefore, more heavily weighted.

The first place to look is the quota itself. What drives it? In a great many companies I have worked with, it becomes a function of what is needed to meet quarterly profit goals.

Okay. So I make and sell woolen mittens in Singapore and I need to make a very conservative quarter million net this quarter. Seeing as how it is rarely below 80 degrees in Singapore, my market consists of travelers visiting cooler climates. To make my goal, I must sell 200,000 mittens between April and June.

When I miss that goal, is my sales staff to blame?

Sure, we can look at exports, finding other creative uses for woolen mittens, etc. But those also are not solely in the purview of my sales staff.

I can shout, whine, carry on and blame my people for not meeting quota all day long, right? But I am not going to meet my quota.

Extreme example, sure. But the point is that quotas are very often set not to market conditions, economic climate or other relevant drivers, but instead to demands from the board room for ROI percentages.

If the real need is for expanded bottom line, then move beyond your sales staff to your larger team framework, and look beyond quotas for more expansive solutions to meet underlying goals.

Together, let's put the fun back into life!
Belldon Colme
belldoncolme@gmail.com

In any given month, nearly every sales organization has someone under quota. Sales is a difficult job, and even the best reps have bad months or quarters. But if you have a rep in a prolonged slump, here are six things you can do to help get them back on track and above quota.

Focus on the numbers
Start with a bottoms-up review of their pipeline, and be as empirical as you can. This template (http://www.heinzmarketing.com/matt-on-marketing/blog/2010/5/template-for-week...) for a weekly meeting with inside sales reps, for example, demonstrates how you can start with closed business, work back through pending opportunities, and continue to get more granular and tactical until you find a specific area for deep dive and improvement.

Focus on what they can control
It’s not productive to complain about lead volume, lead quality, market conditions, outdated collateral, or any of a myriad things outside of your and the rep’s control. Instead, focus on what they can control, starting immediately and every day. Activity volume, outbound calls, crispness of presentation, lead follow-up, etc.

Compare current and previous habits and performance measures
Athletes in a slump review video of themselves when they were “in a zone” to identify what they were doing particularly well (and may have stopped doing or adjusted since then). Salespeople can do the same thing, and you as a manager can help them. Look at their performance habits when they were at the top of their game. Not just funnel metrics but attendance records, follow-up rates, presentation close rates, etc. Figure out the right mix of measures for your business and sales floor, and look for what’s changed.

Peer shadowing
Have a trusted colleague shadow the rep for an hour or so – watch their activity, listen to their calls, sit in on a new presentation. It’s often difficult to pinpoint on our own what we’re doing wrong, but someone else (who isn’t living it minute-to-minute) can often spot these things quickly – especially when they’re filling a similar role next to you.

Deal walkthroughs
Take a particular opportunity in the slumping rep’s pipeline and walk through it in detail. Where did it come from, what are the prospect’s needs, how are they qualified, what are the next steps or roadblocks to moving forward. Sometimes this level of detail can help identify something that can not only kickstart that particular opportunity, but give the rep the confidence and momentum they need to push back up to their normal performance levels.

Evaluate effort, attitude and drive
Great salespeople go through slumps. But there’s a difference between someone who’s giving it everything they’ve got and those who are mailing it in. Look for signs that your reps might have a decline in motivation, initiative or passion for what they’re doing. The source of this could be inside or outside the organization, but either way it’s affecting their performance. Help identify and resolve any issues as best you can (without crossing any HR lines, of course).

Use positive reinforcement & constructive feedback
If a slumping rep isn’t trying hard and isn’t responding to the above steps, they might be on their way out the door. In every other case, they feel awful about their numbers. They know the organization isn’t happy with them, and they’re equally unhappy with the paychecks they’re taking home. Have some sympathy and empathy for these individuals, and make it clear that you’re equally committed to helping get them back on track.

If hiring managers hire for competence and sales talent, their salespeople will be more successful than if they hired for competence alone.

1. How do you define talent?
2. How do you measure talent?
3. How do you know a candidate’s talent?
4. How do you know what talent is required by each job?
5. How do you match a candidate’s talent to the talent demanded by the job?

Everyone wants to hire for talent but if we can't answer the five questions with specificity we can't hire for talent. Yes, even if we don't hire for talent we will hire talented people some of the time but not nearly enough of the time.

I agree with many of the comments above related to the importance of territory design & the process of setting quota's. In addition, it is important that we are mindful of the mechanics of comp plan design when considering why '50% of reps are not making quota' and categorizing this as grossly disappointing.

A common standard sales compensation plan designers shoot for is to have 50-70% of the sales team achieve their target (100% of quota). This implies that if the quota & territory sizing process is robust are chosen well, 30-50 % will fall short of their target - BY DESIGN. This may not be such a bad thing, many plans will have incentive payouts begin when reps are at 60-80 % of quota and ramp payout rates with accelerators for performance tiers that meet or exceed target.

Too often the emotional reaction to not hitting quota is to think a switch has been flipped that implies utter failure. The reality is that this may or may not be the case.

Top performers are differentiated not by SKILL but by WILL. The Success Drivers(R) that define will are: Beliefs in Self, Value and Role, Goal Transparency, Emotional Intelligence. These drivers put actions into results into success. If you are a sales manager change the dynamics of your next conversation with sellers who you want to help raise their performance level. Discuss their belief in what they are doing, the value they provide the customer and in their abilities to do their job. Review their goals - and your goals for them - are they clear, are they written, is there an action plan to accomplish them - do they have personal as well as business goals, are they reviewing these with a stakeholder? Are they taking the high road or the low road with conflict? This is a totally different discussion than what did you sell or not sell today! Build the will and you'll be closer to having more than 50% top performers!

I've got 3 answers

1) Salespeople need to aim higher - what is so good about achieving quota? If more people aimed higher than quota - then would more people beat target?

2) Most quotas are set by aspiring companies - which is all well and good in an up economy. The quotas are aligned to the company goals and dreams - which is fine. When you've promised your investors 500% growth and the salesteam are coming in at 150% does that make them bad sales people? Maybe the business didn't adapt quickly enough to a change in the economy and is getting left on the shelf while others eat your lunch? Maybe the business stopped helping salespeople fill the funnel. Or maybe it just forget the fundamentals that salespeople need a target on day one of the year (not day 150 as some companies act).

3) Salespeople are lazy, disorganised, disruptive, impossible to manage:- take your pick.

All of the above will be true at some point this year for many of us but I'm just a salesman what do I know?

http://beatingtarget.com