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Why Sales Performance Continues to Decline Even as the Economy Rebounds

With many companies trying to shake off the drag of a global recession, CEOs and business leaders are eager to find growth opportunities. One place they need to look is in optimizing their own sales organization. Unfortunately, too few companies are willing to reorganize or reengineer their own sales processes for fear of disrupting business as usual; especially as the economy begins to recover and sales begin to improve. In addition, according to extensive sales effectiveness research, it's not clear that top level decision makers that are making changes are shifting fast enough to modify their sales model to meet current demands of today’s buying patterns. What we do know is that CEOs and leaders who put sales management at the heart of their agenda have captured astonishing growth — outperforming their peers by 50 to 80 percent in terms of revenue and profitability according to a Harvard Business Review (2012).

Unfortunately, sales managers and sales people are not prepared for a changing model in the new economy and ever changing buying landscape. In fact, according to the Sales Executive Council (2010), 65 percent of the sales people say that their managers are not equipped to handle the shifting sales environment to effectively guide and train them. According to a Harvard Business Review, of the $20+ billion that U.S. companies spend training their sales forces every year, very little gets directed towards sales managers to support their growth initiatives. In many firms, revenue growth targets are not being met, a large percentage of sales people are not proficient at qualifying or prioritizing opportunities, and the foundations of account planning are not being routinely executed. Sales systems and methodologies are not being leveraged consistently, even though it’s widely recognized that the use of a formal sales process improves performance. Even more concerning, sales forces cannot effectively map the sales process to the customer’s buying patterns, despite the fact that clients are often vocal about what they need.

Here's the scary truth and why all sales organizations and managers should care: according to a recent independent research study, “approximately 30% of the time, the winner of the sales cycle was determined before the "official" selection process even started. Another 45% of the time, customers had already made up their minds about whom they were going to buy from about halfway through the process. That means that 75% of the time, customers made their decision halfway through the process. Only 25% of the time did customers make their final decision at the end of the selection process (Martin).” In other words, if you are not clearly in the lead at the midpoint of the sales process, the odds are that you are going to lose the business.

Here’s how you can get ahead of your competitors and overcome the threat of low sales performance and increase your deal conversions:

  1. Assess your sales organization to find the gaps and low performing areas – businesses that do this are able to optimize the sales organization and focus on making incremental improvements.
  2. Map out your sales process and create a systematic, formal process that can be institutionalized across the organization – this has been proven to increase conversions by 20% across the organization on average (HBR Sales Effectiveness 2012).
  3. Understand each sales persons’ traits to learn if they have a TOP SALES TALENT personality – do you know if your team has sales characteristic deficiencies? If not, this is CRITICAL to your optimizing your sales organizations success.
  4. Determine if a training program will improve sales performance – Look for sales training that teaches strategies to incorporate the entire sales funnel effectiveness, from lead to conversion – most companies are only focusing on one or two areas, if any, and are leaving money on the table. If you don’t have a sales training program click here to get a 14 Day Free Trial with three complimentary coaching sessions by a certified Mastery Level Coaches to help you assess your sales organization and training initiatives.

Finally, research shows that “companies with stronger client relationships and a dynamic sales process significantly outperformed peers. For instance, top performers—those with a more strategic or trusted partner relationship with accounts and a formal, dynamic sales process and training — had 20 percent more of their sales force attaining quotas and were 17 percent closer to attaining their company’s sales plan than their peers that lacked these strategies” ( Sales Effectiveness 2012). As the economy begins to rebound, now is the time to super-charge your sales results and look for areas to optimize.

Research and sources: Harvard Business Review, Accenture, Independent Research, Matt Dixon, co-author of the article The End of Solution Sales and The Challenger Sale, Author: Steve W. Martin, Effectiveness of Sales Training Programs) originally appeared in the Harvard Business Review.

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