8 Reasons Why Sales Reps Miss Quotas

And What You Can Do About It

In a coin toss, at least you’ve got a 50 percent chance of landing on heads your call.

For salespeople trying to make quota, the odds are worse.

No matter what study you read nowadays, more than half of sales reps miss sales quotas. With all the tools available today through sales enablement, this number is unsettling. What’s happening?

Most sales managers or organizations invest time and energy to find out why their reps miss quota─a logical first step to understanding the why. But they don’t always get to the answer.

In working closely with Objective Management Group’s Sales Effectiveness & Improvement Analysis™, I’ve succeeded in helping organizations answer the puzzling problem of why so many reps miss quota. Here’s what I have found as the most common reasons:  (Are you guilty of any of these?)

8 Reasons Why Reps Miss Quotas

1. Setting Quotas Incorrectly

Setting realistic sales quotas is all about finding the right balance. Sales leaders must meet the needs of their sales reps and ensure the quota is in sync with company objectives and strategy. Too many companies increase a reps quota 15 percent over the previous year and think it is an acceptable decision. But there’s no process behind the decision.

According to a survey from SiriusDecisions, 50 percent of sales organizations go through five to ten iterations before finalizing their sales quotas, and 28 percent of organizations create more than ten iterations.

If the sales leader fails to use a reliable process, he or she is setting their salespeople up for failure. In fact, SiriusDecisions also found that 54 percent of companies do not deliver their quotas until two weeks to a month after the start of the fiscal year.

When sales quotas are not clear or credible, many sales opportunities are lost either to competitors or prospect no-decisions.

2. Failure to Put the Right People On the Bus in the Right Seats, Calling On the Right Prospects

In many cases, salespeople are left unclear about the sales process and their role in it; that’s why they cannot capitalize on their strengths.

The OMG assessment uncovered that not all the company’s salespeople are even capable of opening new business (hunters); others perform better as account managers (farmers). Before you decide who’s going to do what on your team, you must analyze their sales capabilities. Study their DNA. Profile them. Are they cut out for business development, inside or field selling? Are their skills developed to qualify, present or close the sale?  Do you mistakenly expect all these skills in one person?

For example, someone with an inability to qualify well spends too much time and company resources on the wrong prospects. He may build a plump pipeline of prospects, but those prospects will never close. And if they do, they’re not valued because they do not fit the company’s ideal prospect profile.

What’s more, when reps call on the wrong prospects, they are usually working off weak leads, which we’ll speak about shortly. Finally, reps tend to call on technical people who understand the complexities of their solutions because it is easier for them.

 

3. You Hired the Wrong People

It is quite possible your reps are not hitting their quotas because they were not suitable for the job in the first place. Hiring the wrong sales reps is detrimental to your entire sales team and organization.

Hire right at the outset. Over my career, I’ve made my share of wrong hiring decisions. Finally, I learned to use sales DNA profiling and assessment tools. Three times these tools advised me not to hire three candidates. I made an exception. All three failed. Based on their knowledge of our industry, their experience, first impressions during the interviews, you would have hired them, too. Don’t take risks.

When you learn to rely on the OMG assessment system, you become more like a doctor doing pre-surgery work. Before the surgeon enters the operating room, she orders a wide range of diagnostic tests to understand what she’s up against with the patient.

The OMG assessment identifies DNA, skill set, commitment and desire to sell. It zeros in on the reps’ beliefs and behavior tendencies under pressure. As an example, a salesperson who believes that prospects will think over his offer and eventually buy is being misled by his own beliefs. That’s a reflection of his own buying habits. If he spends lots of time making decisions, returns to the store six times over four months to make the decision, he will sell the same way. So when the buyer says, “I want to think it over,” he think it’s fine. He would do the same. However, it creates a weak link on your team.

 

4. Failure of Sales Managers to Adequately Coach Their Teams

Invest enough time to coach your reps, and you will increase the odds of them making quota. How much is enough time? It depends on the rep.

For example, if someone struggles consistently with meeting numbers, you may need to work closely with him daily, weekly or monthly until the tables begin to turn.

Sales coach David Waldschmidt says, “Most companies confuse their performance review process with a team assessment and coaching process. It’s almost impossible to be consistently successful without having a process in place that assesses the team and then leverages the learning with aligned and relevant coaching.  

A sophisticated team assessment process allows you to know the collective AND individual strengths and weaknesses of the team. I got 10 bucks anyone reading this right now can tell me the 3 major weaknesses AND strengths of their collective sales team RIGHT NOW!

See! I told you!   

Go assess your sales team by the required skills to be successful, hard and soft.”

With David’s advice, I would say, then coach them accordingly.

 

5. Failure to Set Expectations

Establishing expectations with any new sales rep set the stage to monitor their performance. For existing reps, discuss their sales quotas and set expectations every year. If you have the right metrics and you and the rep both have a solid understanding of what’s expected, then you eliminate surprises.

The sales leader must communicate what’s expected and do it early. He should personalize the communication for each rep, carefully breaking down which metrics he will track and which will be applied to measure the rep’s accountability.

Along with detailed expectations, be sure to share the larger picture with your sales reps. It is vital for them to understand how their performance affects overall company goals. Don’t leave the sales rep guessing what’s expected.

 

6. Poor Lead Generation

How do you generate leads? And how strong are they? Have you defined what makes a strong lead?

Poor lead generation creates weak sales results. Your reps don’t know exactly what they’re looking for and end up chasing whatever they can. To aggravate the problem, once they find the so-called ideal prospect, they sell too fast, jumping right into a pitch on products and services.

I urge you to review whose job is it to create new opportunities, new leads, and understand exactly what they are doing.  Is it marketing? Sales? Or both? Is there any alignment between the two functions?

 

7. Lack of Persistent Follow-Up

Want to know how lack of follow-up impacts your sales?

Take a look at these statistics from Kaleidico:

  • Two percent of sales are made on the first contact
  • Three percent on the second contact
  • Five percent on the third contact
  • Ten percent on the fourth contact
  • 80 percent of sales are made on the fifth to 12th contact

 

How persistent are your sales reps?  Do they leave every meeting with a solid action commitment from the prospect? For example, secure a commitment to schedule another meeting at a specific time with additional decision makers. Or do your reps leave follow-up up in the air altogether?

Sales managers must know where the prospect resides in the sales funnel. Is he still in the awareness stage? Has he moved to consideration? Or has he moved into his decision stage and your rep is absent? Your reps must know what next step is about to occur in the prospect buying process. Of course, it’s not easy. That is why you must coach around this challenge to improve the skill.

 

8. A Black Hole Lurks in Your Sales Funnel

If your sales reps miss targets, chances are a black hole exists in your sales funnel.

The black hole could have been etched in the funnel by poor quality leads or weak sales follow-up. Whatever the reason, deep dive into the causes behind loss prospect loss, and put a clear transformation plan in place.

The black hole could be your metrics. Do you measure the right things? Too many deals leak out of the funnel unnoticed because you do not measure their flow progress at the outset. They never even had a decent chance to close. Here’s what you can do.

Take a moment to review and retain the McKesson case study on the likelihood of closing opportunities. In a recent client assignment, I looked at 25 deals in the final phase of the client’s sales funnel and found that 65 percent carried a McKesson score below 50 points. Based on McKesson guidelines and the client’s history, it needed potential deals to score 70 points or better to close a deal.

Use it. It works.

See you on the upside,

Bill

For more information, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700

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