For many years, experts and analysts have been predicting the demise of B2B sales. But the fact is, despite the dramatic changes that have impacted the sales profession over the past few years, salespeople and sales teams continue to thrive at many levels. In their most recent analysis, Gartner Group admitted that there was no impending “Death of the sales rep” on the immediate horizon. (1) However, marketplace trends shaped by the Pandemic, (supply chain shortages, economic shifts), the Great Resignation, the Economy, and dramatic changes in B2B buyer behaviors all indicate that sales leaders must strategically re-think their sales management approach to be successful and more relevant in the future.
These trends point to a long-overdue correction in cultural behaviors around how sales teams are managed and how performance is addressed in many sales organizations. Said another way, there is a Coaching Crisis in Sales: one that, if not addressed, will result in further deterioration of the sales profession in the eyes of B2B buyers. In this article, we review the contributing trends and explain how an investment in Sales Performance Management and Sales Coaching will help reverse the impact so that sales organizations become more capable of meeting their goals and improving customer relationships.
Unquestionably, the Pandemic created massive economic damage and human impact for millions of people and businesses. In the moment, sales leaders focused on reacting to changes in market and customer conditions, transitioning customer interactions to digital communications, and confronting WFH issues merely to survive and continue producing revenue. However, there is evidence that beyond the isolation aspects of the Pandemic, many of the issues that surfaced already existed and, in some cases, represented ongoing issues that the Pandemic accelerated and worsened. Let’s examine some of these underlying issues.
Sales Teams Make Quota While Sellers Underperform
For many years, CSO Insights (acquired by Miller-Heiman and later Korn Ferry), published a study that, among other things, showed the percentage of sales personnel who achieved annual quota in an average sales organization.
The graph on the next page shows that even before the Pandemic, sales organizations faced a critical structural issue. In many sales teams, a significant percentage of salespeople didn’t (and still don’t) achieve quota. The Pandemic made this situation more difficult with supply chain issues and the transition to digital selling. However, quota attainment percentages have been dropping for several years. In addition, senior leadership teams and boards are pressuring their sales teams to achieve ever greater revenue goals, especially in light of the desire to recover potential revenue losses over the past few years and the current Economy.
Ironically, Korn Ferry found in one of its recent studies that even when a good percentage of reps didn’t make quota, sales managers largely made their team numbers. The main explanation for this is those reps who did make quota more than made up for the reps that didn’t. In other words, the top performers covered for the rest of the team who underperformed.
We hear from our discussions with prospects and customers that, in most cases, C-Level executives (like CEOs and CFOs) and boards are questioning sales leaders’ overreliance on top performers and what sales leadership is doing to ensure more sales team members make quota.
Great Resignation Impact on Sales
Another residual issue resulting from the Pandemic is the sea change in people’s attitudes about their job situation. A Gallup study in late 2021 found that 48% of employees were actively seeking new jobs. (2) The numbers are even more dramatic for Sales, as shown in the figure below. Along with the record-setting level of resignations across most occupations, sales organizations have seen even greater churn within their teams.
More salespeople are resigning than ever before, and with that, a lot of attention is focused on retaining and attracting top sales talent. Sales Benchmark Index determined the general sentiment they heard in CEO and CRO interviews in late 2021 and early 2022 was “we think the worst of the great resignation is over for us.” However, SBI’s analysis portrays a completely different story.
SBI surveyed over 650 sales professionals to understand their degree of job-seeking, as well as broader organizational considerations that were prompting them to stay or leave their employer. They found that the majority of sales professionals, and specifically, the majority of high-performing sales professionals are actively looking for new employers.
For some companies, it is a make-it-or-break-it issue if top performers leave and take a large percentage of revenue production with them (especially if they are dependent on top performers for the lion’s share of revenue as described above).
SBI also found that the most important driver of sellers’ intent to stay with their existing organization is their ability to see the potential for future career growth through a defined career growth path and more effective professional skill development. By comparison, compensation did not prove to be a major factor in seller retention. (3)
In the “good old days” before the Pandemic, sales leaders often permitted a certain percentage of employee turnover to occur. This allowed managers to put poor performers on performance improvement plans to push them out of the sales team. Given the cost and the nature of today’s talent crisis, it’s no longer possible to terminate a rep and find a new one without considerable cost and effort. Managers must work with their existing team, improve the talent they have and attempt to grow revenue by increasing the entire team’s performance.
Buyer Experience Creates Imperative to Improve
There have been numerous analyst reports about the changes to the B2B buyer experience over the past 10 to 15 years. They can be summarized as follows:
- B2B buyers get educated online – The availability of highly reliable online information has made it possible for buyers to educate themselves about products and services without involving salespeople. Gartner recently reported that B2B buyers spend less than 17% of their time with salespeople during buying activities. (4)
- More internal participation in the decision process – The complexity of B2B buying processes, driven by larger numbers of stakeholders and the lack of defined evaluation processes, has increased the number of decisions and people involved in the decision process. The biggest reason for losing deals is not competition, but “no decision.”
- Buyers prefer digital – The majority of buyers prefer to interact with companies digitally versus in person. While the Pandemic likely accelerated this trend, it has been going in this direction for several years. There have been numerous discussions about B2B sales emulating B2C selling models partly driven by a longstanding alignment gap between Sales and Marketing in many businesses. Analysts point to a future sales business model that will be driven by teams who integrate Sales, Marketing, and Customer Success into a single “buyer journey” that better supports buyer interests.
It is easy to conclude (like the analysts) that selling strategy has to shift in the direction of a more digital approach to selling (meaning online selling), where salespeople evolve to become one channel among several. However, we believe that if this conclusion is viewed in light of all the underlying trends mentioned above, there is an argument to be made about how sellers simply MUST IMPROVE if only to change perceptions and justify direct sales to B2B customers. If sellers do a better job of selling, they can be perceived in a more positive light – and that is where Sales Coaching comes in.
The Sales Coaching Conundrum
Ironically, sales training experts, analysts, and consultants have been saying for many years that the answer to improving sales professionalism and performance lies with the people that have the most ability to change it: Front-Line Sales Managers (FLSMs). To be effective, FLSMs need to do a better job of coaching and training their teams. Otherwise, sellers won’t improve.
However, until recently this recommendation has been largely ignored. We believe this has happened for several reasons, some of which are widely known but have not had an impact to change the strategy of most sales organizations.
Are Sales Managers Competent Coaches?
The reason most often given as to why sales managers don’t effectively coach is because even though sales managers were (or are) great salespeople, that doesn’t mean they have the skills or qualifications to be great sales managers. Numerous experts from Jason Jordan (Author of Cracking the Sales Management Code) to Jim Dickey and Barry Trailer (formerly of CSO Insights, now Sales Mastery) have published articles and books about this issue. One thing is clear: a manager must first be a good salesperson before they are promoted, but being a good seller never guarantees becoming a good manager.
Are Sales Managers Even Coaching?
The 2021 World-Class Sales Practices Study Report was recently released by Jim Dickie and Barry Trailer at Sales Mastery. In the study, they discussed this key conclusion: Sales coaching is a critical strategy required to improve sales team performance. (You may be familiar with this study based on its roots at CSO Insights and Miller-Heiman over the past 14 years.) When asked to evaluate the statement in the World-Class Sales Practices Study, “Managers consistently coach salespeople to higher levels of performance,” only 41% of non-World-Class firms (94% of those surveyed) said this statement was true. (5)
It stands to reason that improving FLSM coaching skills makes as much or more sense than more individual sales rep training. The reason is the leverage FLSMs have to influence their direct reports. Given an increasing ratio of reps to managers, a single manager can impact a much larger group of reps’ productivity by being trained in best practices and deploying those practices to their team. Nevertheless, there must be actual training done to teach managers effective sales coaching skills.
Focusing on Pipeline Instead of Performance
A root issue around the lack of sales coaching is based on the cultural belief in Sales that the most important metric to measure a manager’s success is making the number. Culturally and technologically, Sales organizations are set up to track performance versus quota. Sales Managers are primarily compensated on team revenue contribution and forecast accuracy. Salesforce and other technologies used by managers are designed for deal management and forecasting revenue (to make the number).
The primary conversations managers have with salespeople revolve around deal strategy and closing business, not enhancing skills or understanding how to improve selling performance. Studies have shown that managers often mistake deal conversations for sales coaching, when in fact, these conversations offer little to no insights into skill improvement. It’s no wonder that skills development ranks so high as a preference among reps planning to look for a new job.
In reality, while Sales managers are primarily evaluated on team revenue performance, this is only one aspect of FLSM management responsibilities. Unless managers are required to prioritize sales coaching as highly as revenue goals, they will likely continue to “follow the money.”
Is Sales Leadership Committed to Coaching?
The above study also found that critically focusing on the skills and abilities of FLSMs to perform sales coaching is highly important. In a recent Gartner study of CSO priorities, over 60% of CSOs surveyed rank Improving Sales Manager Effectiveness as one of their top four priorities in 2022. (6) These results suggest that many Sales leaders are now trying to determine the strategy for how FLSMs can build greater competency to coach and improve their teams.
An equally compelling issue is a sales leader’s commitment to “coach the coach.” How do FLSMs prioritize coaching if they are not coached themselves? Leaders need to set an example by putting time and effort into ensuring their direct reports have the right resources and support to succeed in their sales coaching efforts.
Sales Performance Improvement
Let’s recap: We have a situation where a significant percentage of reps don’t make quota, and the C-suite and board are growing increasingly intolerant of that outcome. Reps are resigning to take on new sales roles at an historic rate, and managers in large part are not focusing on sales coaching because of the pressure to close business and manage to the pipeline…and because they often don’t have the skills to effectively coach. It’s clear that something needs to change.
Here are our recommendations about what sales leaders can do to improve Sales organization performance:
- Attempt to develop reps before churning them – First, there needs to be a recognition that given the talent crisis, it’s no longer feasible to “churn” reps by dumping poor performers. It’s too costly and time-consuming.
- Retain reps through sales performance management – Second, it’s critical for managers to support their team by enabling a program of sales performance improvement. It’s also important to acknowledge that opportunity pipeline management does not by itself improve performance. Only improving skills and behaviors can influence how reps perform while showing them that the business is trying to support them. This has been identified in studies as a major success factor in retaining reps.
- Managers must coach – To improve performance, managers need to coach. If your business does not have a process for sales coaching, then you need to have one.
- Data driven approach – Managers and leaders need to have the necessary information, driven by rep’s sales activities in Salesforce, that provides managers with the ability to easily assess and diagnose team member performance. This information also provides insights into best practices and helps identify when reps are not inputting data into Salesforce.
Are you committed to making these types of changes for your team? If you plan to implement this approach, you need support and tools to enable it. That’s where Funnelocity can help.
Funnelocity® is a set of tools and processes to enable Sales Performance Improvement for your organization. Our value proposition is to help sales leaders and sales managers diagnose the root causes of performance by measuring and analyzing sales results that have been driven by specific skills and activities. Managers use this information to coach their team and to develop measurable tactics and plans for performance improvement. Leaders use this information to support their managers, so they do a more effective job of coaching team members.
Because this process is based on leading indicators and a focus on aligning skills with the sales process, managers can do a better job of anticipating performance issues and work to correct them so that reps meet the minimum standard of performance before it’s too late, or best case, significantly improve performance by making critical skill adjustments.
How does the process work? The diagram below summarizes the Sales Performance Management process:
Improving Sales performance is not an event. It’s a continuous process driven by a leadership commitment to focus on collaboration between managers and team members to:
- Identify skills that are important to your team
- Collect key metrics, creating predictions of future performance
- Act on data-driven insights to improve team member performance.
- Increase collaboration between leaders, managers & sales team members
- Improve retention and employee satisfaction
Sales leaders need a clear strategy to implement and establish Sales Performance Management as a critical process to achieve success and grow revenues, driven by coaching provided by their FLSMs. Managers must be empowered with the ability to succeed by providing them with data and tools to better assess performance and act on that information. Sales reps need focused individual plans showing how they should improve their performance. Finally, there must be a willingness to invest in improvement: how much time managers spend on improvement versus the pipeline will largely determine how much improvement is made.
Funnel Metrics provides this process using our Funnelocity® tools and through extensive training and support during and after implementation to help you and your team learn and establish Sales Performance Improvement best practices within your organization.
To request a Funnelocity demo, visit https://funnelmetrics.com/contact/.
- Gartner Group, “5 Ways the Future of B2B Buying Will Rewrite the Rules of Effective Selling”, by Brent Adamson and Nick Toman, August 4, 2020, Pg 5.
- Harvard Business Review “Are you prepared for the future of work.”, by Debbie Cohen and Kate Roeske-Zummer, October 1, 2021, https://hbr.org/2021/10/with-so-many-people-quitting-dont-overlook-those-who-stay?registration=success
- Sales Benchmark Index, “SBI Go-to-Market Imperatives for 2022”, by Martha Mathers, Nancy Nardin, Nick Toman, and Ryan Tognazzini, 2022.
- Gartner Group, “5 Ways the Future of B2B Buying Will Rewrite the Rules of Effective Selling”, by Brent Adamson and Nick Toman, August 4, 2020, Pg 4.
- Sales Mastery, “2021 World-Class Sales Practices Study Report” by Jim Dickey and Barry Trailer, December 16, 2021, Pgs 20-21.0
- Gartner Group, “The Chief Sales Officer”, First Quarter, 2022, Figure 1, Page 22.