What major factors could affect its trend and variation?
Dr. Spencer Johnson in his book Peaks and Valleys described it very nicely “it is natural for everyone everywhere to have peaks and valleys at work and in life. A plateau can be a place of rest;but if you stay there, you can become bored, and restless. To stay on a peak longer, you must: Be humble and grateful; do more of what got you there; keep making things better; do more for others; and save resources for your upcoming valleys.”
The same goes in business, every sales organization’s performance varies positively and negatively on a plateau which forms its sales trend. The key is to elevate this trend, stay on peaks longer and narrow down the under-performing area.
But the question remains, why is it natural and what major factors affect the sales performance?
It’s obviously clear that: one, the job is difficult and relies on the person behind sales, thus salespersons’ performance fluctuates; two, there is no one simple solution. What else may be involved is the objective of this discussion.
Believing that “good salespeople are born, not made,” many managers recognize that recruiting is important. Others holding that “if you pay for performance, you’ll get it”, believe that incentive compensation produces motivation.
But as Jack Welch set it. Irrespective of what, your team will always, on the long term, be structured as 20% top performers, 70% the middle, and 10% the bottom ones. He further insisted on the “act” part asking managers to act according to this categorization. Stars to be nurtured and given incentives to excel, the bottom 10% to be weeded out, and a smart act would be to focus on increasing the performance of the middle 70%, since they make up the majority”. This gets us back to the same objective stated earlier rather than striving to have more stars.
This entitles us to narrate down some factors that affect the overall performance. We will leave the room for yourselves for additional factors, opinion and comments that you believe when implemented and developed would uplift the sales trend.
- Lack of Targeted Offering: Some might to think that it’s smart to be a fox, sell and add services/products that doesn’t synergize with the core. It will definitely lead to some peaks, but it would be wise to calculate the valleys that are left behind such a move. The tendency to immediately go for the first solution that the client asks for is one of the hardest behaviors to overcome. In his book Emotional Intelligence, Dr. Daniel Goleman refers back to a remarkable study conducted during the 1960s. He took a group of children who were about four years old and put them in a room, alone with marshmallows on the table. The researchers would tell the child he or she could have the marshmallow, but if the child could wait while the researcher run a quick task, he would bring back two marshmallows. This is a pretty good return on investment for a child. The idea of waiting to eat the marshmallow is distinctively difficult for a child. Following on these children after 15 years, they found that those who had the patience and discipline not to eat the marshmallows were more successful emotionally and intellectually regardless of their chosen pursuits. Management should focus solely on their targeted offerings, and implant a disciplined culture within their sales organization joined with the Hedgehog concept that Jim Collins defined as “anything that does not somehow relate to your idea (targeted offering) holds no relevance.”
- Lack of Structured scientific selling approach: Scientific methodology, a terminology frequently used recently when referring to any structured process that will eventually lead to a visible “secured” outcome rather than relying on some luck. This should be the first step to develop and build for having a clear visibility for the whole sales organization. As described in a previous article Why to Map Our Sales Process, it’s purely a way of planning out all steps, tasks, and actions as well as identifying abilities required to take a sale from beginning to close, and follow-up that will narrow down the sales fluctuation. Each step is client centric and consists of several key activities with a measurable result. This understanding has different success rate on both levels (macro and micro).
- Sales Organization Structure, Size and Alignment: Any changes adapted to the sales structure, size, alignment or as well as commission scheme would have a tremendous change on sales performance. A detailed discussion will be stated in the upcoming case study. We will translate how HEED consultants formulated on-site the math behind sales numbers, applying scientific perspective for the analysis that led to different changes in the sales structure. Eventually the later had a tremendous increase on the sales performance and turnover.
- Lack of Training and Coaching for developing the skills: Research shows that 74% of all salespeople are overwhelmingly mediocre, and as such, they succeed in closing non-challenging sales deals. 60% out of this number could have a high performance when trained properly. This doesn’t mean to train them on specific sales techniques, or certain answers for different objections. As Theo Bücker, the Lebanese Football National team Manager and coach, put it in one of his recent interviews. What we are training the team is not some football techniques but the complexity of the game. The structure, the strategy and the understanding of the competitor.The same applies on sales people, training them on understanding the sales structure, and framework behind the process is the key to success before applying the right techniques.