You may be on track to reach your total sales target, but are some members of your sales team not performing?
If not, you’re likely not creating sustainable and predictable performance. To do that, you need a capable and results-producing team across the majority.
Calculate your sales participation rate
In sales, one of the goals of ongoing management is Participation Rate (PR) – the percentage of sales team members who are at or above plan.
For a sales team, Participation Rate is easy to calculate. On a team of ten people with four people at or above their target for the year, the Participation Rate is 40%.
Participation Rate is a statistic rarely scrutinized and here’s why:
Sales managers are measured for making their quota. If the quota is $100 million, the sales manager’s goal is to get each sales person to deliver an average of $10 million. However, the different approaches to get to $100 million are not equal. If only a few make it, the likelihood of sustaining performance is reduced.
Whether some sales reps produce $15 million and others $5 million; the sales manager only needs the total to add up to $100 million. This incentivizes the sales manager to keep average performers because a sales person who only delivers 50% of their quota is better for the sales manager than the 0% they would contribute if the sales manager let them go.
Yes, you can achieve a great year on the success of a few sales reps but it’s not truly sustainable. If sales managers don’t understand this dynamic, they will be compelled to keep average performers and forgo the opportunity to create increased results.
Our research reveals that a participation rate of 60% or less will give sales managers a 10% chance of making their revenue plan. Sales managers must aim for a 70% participation rate to have a good chance of making plan, although it is not guaranteed.
Given this, why do sales managers tolerate poor performance? What stops them from having tough conversations?
Our belief is that they don’t understand the impact of participation rate.
Assess and categorize your salespeople
A sales rep’s performance can be evaluated on two criteria – behavior and results. If your sales team is not performing to plan, assess whether a sales rep is or could be delivering results using the following framework.
There are four performer categories a sales manager works with:
- High Performers = Deliver results + behave correctly
- Coachable Performers = Behave correctly, but results are not 100% yet
- Tough Performers = Deliver results + behave poorly
- Poor Performers = Poor results + poor behaviors
In an ideal world, a sales manager would have 100% High Performers. Neat concept, most likely not going to happen. What is the next best thing? 100% High Performers and Coachable Performers. This is attainable but it’s not the norm.
Most leaders will have some Tough Performers and some Poor Performers. Imagine having ten direct reports with two in these groups. Not bad, manageable. Now imagine four out of ten. Life is tougher and tough moments happen on a daily basis. At six out of ten, it is probably tough to get out of bed in the morning.
Don’t delay the performance conversation
Try to improve behavior and results with monthly One-on-Ones (more frequent for Tough and Poor Performers), observational coaching with feedback and regular connects to lean in and support.
If these sales management disciplines fail to work, that’s when it’s time for the performance conversation. It has five key steps:
- Set a clear standard and set milestones of performance for sales rep
- Inform the sales rep where they are not meeting the standard and set milestones
- Give the sales rep the opportunity to meet the standard and set milestones
- Offer assistance to help them meet the standard and set milestones
- Outline the consequences of not meeting the standard and set milestones
Sales managers know how to do this – the issue is gaining the courage. Sales managers need to have the conversation as soon as needed as putting it off spares no one.
Sales reps who want to be with you will step it up and improve. Those who are not capable/not interested will show very quickly (in weeks not months) after the performance conversation. If things still don’t improve, the sales manager can move to the final warning, consult with HR and decide to part ways, if required.
If you need to strengthen your coaching skills and or sales management disciplines, refer to our practical sales management sales training solution. Coaching to the challenges will develop your people and enhance contribution and performance across your team.