Data Analytics Trump Gut Instincts in Hiring, Training and Managing Salespeople
In 2017, Dustin Johnson became the number one professional golfer in the world.
Like the sales profession, the PGA Tour is a highly competitive business. Players work closely with coaches, nutritionists, psychologists, trainers in the gym, and data analytics to continually perfect their game.
Go to a PGA event and you’ll see a line of semi-trucks armed with machine shops to customize player’s equipment to the course. Arrive early and you’ll see coaches with video cameras and training devices inching out every bit of a performance edge.
Dustin Johnson’s scoring average is 69.61. For you non-golfers, a normal course is par 72. So, on average, he shoots 2.39 strokes under par. Jordan Spieth was lowest at 68.85. Bear with me while I lay out the stakes here.
The number 100 player in the world is Byeong Hun An from Seoul South Korea. His scoring average is 70.89, a difference from Dustin of only 1.28 strokes per round. Differences in earnings and prestige between number one and number 100 are far greater. On tour, Dustin earned $8,732,193 winning four tournaments out of playing in 20. Beyeong Hun An played in 29 with no wins and earned slightly over $1.2 million. With 37 events on the tour, Dustin chose only 20 to play in, like a salesman qualifying his prospects for the best opportunity.
How does a pro golfer shave 1.28 strokes off his game to move from 100 to number one? They both possess the athletic DNA to play on this world stage. Let’s look at baseball.
Moneyball and Modern Science
In a 2015 post, I referred to the book Moneyball to illustrate the concept of using modern science and data analytics to improve sales performance. Statistics such as stolen bases, runs batted in, and batting average, typically used to gauge players, are relics of a 19th-century view of the game. But they were the only statistics available at that time.
Moneyball contends that the Oakland A’s’ front office leveraged more analytical measurements of player performance to field a team better able to compete against richer competitors in major league baseball. Rigorous statistical analysis demonstrated that on-base percentage and slugging percentage are better indicators of offensive success, and the A’s became convinced that these qualities were cheaper to obtain on the open market than more historically valued qualities such as speed and contact. These observations flew in the face of conventional baseball wisdom and the beliefs of many baseball scouts and executives.
Selling and Modern Science
We’ve reached this analytical tipping point in professional selling. And now an amazing treasure trove of information has opened to us to advance the profession.
As we think about data analytics to improve sales performance, we first need to understand how sales process impacts sales effectiveness? According to CSO Insights’ 2015 Sales Performance Optimization Study, the more reps meet quota, the more dynamic the process (see charts below).
CSO Insights’ 2014 Sales Relationship/Process Matrix™
Even at Level 3 Performance in the first chart above, only 64 percent of sales reps met quota. This performance may be acceptable in a large-size corporation with volume sales, but if you manage a salesforce of 10 to 25 reps, the impact is exponentially greater and more damaging.
The Objective Management Group (OMG) studies companies on a deeper level. In its report Modern Science of Sales Excellence, OMG studied 10,000 salesforces, of which 75 percent of their companies reported an increase in sales, resulting from their customized, formal sales processes. OMG then drilled down on the 18 percent of the 75 percent that reported a significant increase in sales. What were they doing differently or better? Learn from these contributing factors:
- 82 percent accounted for the buyer journey in their sales processes versus 52 percent who did not
- 73 percent had evaluated their salesforces versus 51 percent overall
- 100 percent held monthly or weekly sales training for one year minimum versus 28 percent overall
- Most had hired outside sales training firms to provide the training versus 44 percent overall
- 85 percent had a dedicated inbound lead generation team versus 55 percent overall
There’s no silver bullet: these companies use a customized, formalized sales process. Let’s look at other ways you can apply data analysis to improve sales performance.
Measuring the Salesforce
Through its skillful data mining, OMG also proved that the likelihood of a salesperson reaching his/her full potential relates directly to the ‘Will to Sell,’ sales DNA, selling skills, coachability and success at internalizing sales training. OMG applies these factors to weight the salesperson’s opportunity percentage, then it calculates the net-potential revenue increase his firm can achieve. Imagine what you can accomplish with this measurement power?
Some of the factors measured:
Sales Quotient™. Delivers the single best measure of a salesperson’s capabilities, and the prime factor in determining the timing required to close an opportunity. If you score lower, you need to improve skills and strengths to speed the timeframe.
Figure It Out Factor™. Learn how quickly a salesperson can internalize and apply the sales training and coaching required. OMG then adjusts the opportunity timeframe to reflect the average FIOF score of the salespeople.
Sales Management Capabilities. Sales growth depends on the capabilities of sales management to coach salespeople and hold them accountable. While this factor does not impact estimated sales increase, it does impact timeframe.
Microscope Your Sales Team
Whether your salesperson works in business development, account management, or a combination of the two, he or she must possess certain skill sets and competencies to succeed. You know this, of course. But which ones?
Let’s assume you’ve installed a customized, formalized sales process, and you’ve measured for sales DNA, what sales competencies are imperative? Hunting. Selling. Qualifying. Presenting. Closing.
Recently, we completed an assessment for a client that probed on these competencies for two salespeople on a sales force of 50 reps. We took the number one performer, who still has room for improvement, and compared him with number 50. Rep number one was at 110 percent of quota in 2017; rep 50 met only 38 percent of his quota. Both reps had been in the industry for more than a decade and ten years with their current company.
The assessment examined many competencies (skills) to determine the percentage of attributes that each salesperson possessed.
While skills and tactics are only part of the selling profile, they do represent half of your salespeople’s the success equation. The other half comprises selling strengths that directly support the use of skills.
It is very important to understand that salespeople with the right mix of strengths but few skills will always outperform salespeople with good skills but a limited number of strengths. Here’s an abbreviated comparison of the two ends of the spectrum:
Finding Sales DNA
More important, Sales DNA, the combination of a salesperson’s strengths/weaknesses, is a core predictor of sales success. To understand the DNA, we measure specific competencies, the use of a sales process, how a person generates leads, works his territory, and manages his customer base.
When expressed as strengths, Sales DNA drives a salesperson’s ability to execute. If they appear as weaknesses, Sales DNA hinders the execution of selling skills and the sales process. When measuring Sales DNA for our client above, it tracked in this way:
Top-performing Rep #1 89%
Rep # 50 63%
At 63 percent, rep 50’s weaknesses impacted performance. Anyone below 64 percent is likely to face a more difficult time selling effectively. They may be effective with their existing accounts but will struggle to bring in new business, a key reason for missing quota.
The overall sales capability for this company’s entire sales force was 47 percent, quite low. A few big producers carried the team. Improved sales coaching from sales management and appropriate sales training will improve the selling capability of this client’s salesforce over time.
No Guts, More Glory
Unfortunately, this client, like so many companies, operates with a traditional model for recruitment and training. Worse yet, some companies still hire, train and manage sales teams on gut instincts.
The American Society for Training and Development (ASTD) estimates that in the U.S., $15 billion is spent annually on sales training. However, some reps are not trainable or coachable, something our series of assessments will determine for you.
Even with trainable reps, many find their training either ineffective or less than useful. Given the importance of skills and capabilities to sales performance, companies need to reconsider who they recruit into sales roles, and how they train them.
Consider the expense of training a 50-person sales team. If 30 percent fail to meet quota, you end up squandering limited resources. But today, you can avoid such a misstep. Historically, sales managers could not access reliable, data analysis tools to assess salespeople before hired, let alone to monitor for continuous improvement.
Sports teams watch films of previous games and work on weaknesses prior to the next game. However, we see salespeople attempting to learn from their mistakes in front of high-value prospects. Don’t. Do. This.
Learn from Fighter Pilots
Where to do fighter pilots practice the dangerous maneuvers they will face in combat?
That’s right, in a flight simulator. Better to crash and burn in the simulator than in real life. Why not put your salespeople in a simulator? Sales Benchmark Index claims it takes 391 customer interactions to develop sales proficiency. Rather than risk this many sales attempts, use simulator training to perfect sales performance.
Based on my affiliation with Selleration, I can offer you the simulator training experience. In fact, many of our clients use it on the front-end of training to assess and hire salespeople using Selleration’s Selling Intelligence™ score. The simulator puts them into real situations and assesses and monitors their business judgment and other skills. Even your top salespeople will find this tool valuable if they want to win more opportunities and improve their skills. So, learn to love the data.
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