This article originally appeared here in Salesforce.com’s Quotable blog.
Is the sky falling? You bet. And it is about to land on your head unless you figure out how to stop it. Why the dire projection? Data, lots of it. All pointing to the steady decline of salespeople hitting quota. In our global study of over 1,000 sales managers, Vantage Point found 75% of sales managers had fewer than 49% of their salespeople on target. The harsh reality is that if you can’t solve the front-line sales management problem, your opportunity cost will be huge — approximately $3.5 million per manager. If that doesn’t cause you heartburn, nothing will.
Why are so many managers failing and how do we stop this trend? We first need to understand the realities of the environment in which they work. Sales managers are more distracted than ever before, and the distractions continue to mount. The graphic shows results of a time study conducted by Ohio University’s Dr. Adam Rapp. Managers spend about 32% of their time managing their sales teams and 68% attending to other tasks. The 32% includes coaching, managing, attending to customer issues, sales coaching, performance management, and so on.
Let’s explore the most common work-related demands on a sales manager’s time. Sales leaders want forecasts, thus managers spend fully one-fourth of their time creating forecasts. Marketing has demands for input on campaigns, new products, and new customer segments to target. Sales operations requires the use of CRM and the implementation of new sales tools. Human resources wants the manager to assess each salesperson against new competency models and create employee development plans. All of these are demands on a manager’s bandwidth, and we haven’t yet mentioned demands from the sales team or customers. Is it any wonder effective sales coachingis scarce and that so many managers are failing?
Organizational leaders try to offer a lifeline to their drowning sales managers by tackling specific issues individually, without thinking about how all the potential solutions fit together.
Here is a typical situation. Managers are provided with general leadership training like GROW® or Situational Leadership®, each of which comes with associated tools. They are also trained on multiple sales methodologies such as Strategic Selling® or the Challenger Sale®. Each sales methodology comes with a coaching component and tools. Overlay this plethora of tools (none of which are designed to work together) onto CRM and dashboards managers are required to use. Then layer on a competency model, associated assessment, and required development plans, in addition to the standardized performance appraisal system. When you examine enablement through this lens, it is indeed perplexing that companies continue to spend millions of dollars training managers in ways that add to their burden. And then they scratch their heads when they don’t get a return on their training investments.
For the overworked and distracted sales manager, prioritization is essential. Managers must make better decisions about how to coach and manage. This should be the target for effective enablement efforts. The highest-performing managers in our study are maniacally focused on the things that matter most in getting their salespeople to quota. In fact, the top 25% of managers in the study led 30% more of their salespeople to quota, when compared to the bottom 75%. Shockingly, the bottom 25% and the middle 50% had roughly the same percentage of salespeople at quota. Imagine the revenue, productivity, and ROI gains of helping that deadweight 75% of managers perform as do the top 25%!
Top-performing managers ensure that they sharply focus seller effort on activities that matter most. This ensures that sellers are working smart, not just hard. Also, high-performing managers align their coaching effort with activities that are most strongly relate to quota attainment. If prospecting matters most, they coach prospecting. If early stage qualification matters, they coach to opportunity qualification.
Our research showed activity coaching was the only type of coaching strongly correlated to performance, accounting for 24% of the variance in quota attainment. Equip salespeople to sell more by helping them to effectively execute the activities required to sell. Coaching to activities is 1,200 times more powerful than coaching to individual skills. Skills coaching only accounted for 2% of variance in quota attainment because it often happens in isolation and not in a way tightly connected to what sellers actually do.
Here is specific guidance on how to coach most effectively. Top-performing managers formalize their coaching in predictable and repeatable ways. They don’t coach more hours, more frequently, or spend more time in the field than their lower-performing peers. They coach less frequently, for longer durations, and cover fewer topics. The topics they coach are laser-focused on the activities that matter most. Whether it is strategic account coaching, coaching to individual opportunities, or helping sellers prepare for important sales calls, high-performing managers spend more time in each coaching conversation, dive deeper into the topic, and enjoy significantly higher performance than their lower performing peers — to the tune of $3.5 million more revenue, per manager. This is guidance you can take to the bank!