You’re Making Your Sales Quota (But Are You Doing Your Job?)
Sales is responsible for executing the company strategy in the face of the customer. What’s that really mean?
Let’s imagine you have two sales people, each with goals of $5M. The company they work for has two core product lines, each strategic to achieving their growth plan. Sales person A makes his numbers—but only selling his favorite product line , “C.” That’s where he has the most confidence, plus he can always make his goals focusing on product line C.
Sales person B, also, makes her numbers, but her performance is balanced across product lines “C” and a newer, slightly tougher product line “D.” She’s selling roughly $2.5 million of each and is making her goal of $5M.
The key question, who is the better performer?
Many respond, “Well both are performing equally, and they are making their numbers. They are both great performers!”
In reality, sales person B is the better performer. While sales person A is making his numbers, he is actually under performing the potential in his territory, and could eventually be considered a problem performer.
Dave’s Losing It
You may be reading this, thinking, “Dave, you’ve really gone off the deep end this time. Both are making their numbers! What are you talking about with sales person A being a problem performer?”
Let’s go back to the opening sentence in this article, “Sales is responsible for executing the company strategy in the face of the customer.”
Our companies have strategies to drive growth over the long term. These strategies involve growth into new markets, expanding product lines and selling those into new and old markets, acquiring and integrating other companies, to further drive growth. To achieve these strategic goals, each key area must achieve their goals. To achieve the overall strategic goals for the company, it’s critical for sales to sell the complete product line.
We see countless examples of companies struggling to execute their overall strategies because sales has been reluctant or slow to align performance around the company strategies.
For example,as the enterprise software companies moved from licensed on premise software to SaaS implementations, many sales people struggled with that transition. They were more comfortable selling a $100K plus license to the CIO, than engaging end users, selling subscriptions at $1K per seat.
Or companies coming out with a brand new product line, perhaps more difficult and complex than previous product lines. But that product line, might be strategic to the company’s future growth. If sales people can make their numbers selling the old product lines, they often do. In the meantime, the new product line, important to the future growth and viability of the company, is withering away. The company may not achieve the results needed to support the ongoing development of that product line–sometimes killing it, but at the same time adversely impacting the long term growth strategy.
Balancing Performance Across the Portfolio
Companies are constantly in a state of change. Maturing product lines may drive the bulk of current revenues, but can’t sustain that growth over time. New product lines are introduced to support the changing needs of the market place and the overall strategy of the company. Sales people can’t sell just their favorite products–even if they can make their numbers doing so. They have to balance their performance across the company’s portfolio and priorities.
But there’s more, let’s go back to our sales people, specifically, sales person A. While he is making his numbers, he’s leaving a lot of opportunity untapped in his territory. Sales person B has demonstrated there is great opportunity to sell both product lines in her territory. But sales person A isn’t pursuing it. He’s only focused on selling product line C. His competition is getting the opportunity for product line D in his territory—simply because he’s fixated on his favorite product, and just doing enough work to get his goal.
Thinking about this, my competitiveness as a sales person kicks in, “Why would I ever let a competitor take opportunity I could get if I pursued it? Even if I can make my goal with one product line, I could really over achieve my goal with the total product portfolio!”
As a manager, I have to think long and hard about sales person A. Sure he’s making his numbers, but he’s giving away a huge amount of opportunity to competition. Is that the kind of performance I want from a sales person? Ultimately, we may face a difficult decision. Some sales people (I guess you’d call this, “You can’t teach old dogs new tricks.”) just won’t sell the new product lines. If they can make their numbers selling a single product line, they don’t bother. These people aren’t executing the company strategy, they aren’t capturing as much of the opportunity in their territory as they should be. Over time, this performance is unacceptable. Even if the person is making their numbers, they aren’t making the right numbers or are achieving what is possible. Ultimately, these people become a drag on overall performance for the sales team and the company.
Sales people execute the company strategy in the face of the customer. Are you (or your people) doing this?