Dec 10, 2016
Sam is the VP of Sales at a fast-growing company that offers complex B2B solutions. He is responsible for delivering quarter-on-quarter revenue growth. His success depends on his sales rep meeting quota but they are not always able to deliver. He continues to hire the best sales talent he can find and provides them with aggressive incentives. He is also considering replacing his under-performing sales reps.
Sam is turning all the traditional knobs to meet his sales targets – hire more, hire better, hire faster. Sam has also invested in the best of breed sales productivity tools and software for sales engagement, CRM, quota planning and forecasting, but still not seeing the desired results despite attacking the usual suspects. But Sam is not alone. According to a recent study conducted by CSO Insights, 63% of salespeople fail to meet quota. What’s more, less than 57% of companies hit their revenue targets.
While some factors contributing to missed quota may be just business-as-usual eg. over ambitious forecasting, wrong hiring decisions or macroeconomic reasons, interestingly, there are not one but four not-so-obvious but “fixable” reasons why sales teams miss targets:
Four Reasons Why Sales Teams Miss Targets
1. Failure to Adopt New Technology to Listen in on Signals From Customers
If your sales reps are still shooting off the hip like it was still the wild-wild-west, they are probably getting killed by your competitor’s GI-Joes with night vision and laser guns. Today, sales engagement and marketing automation tools enable sales reps to get notified when a prospect opens their mail or reviews your sales video, website or deck, and some tools would even provide data on time spent on each slide on that deck. If your sales team is not equipped with these tools and your competition is, your reps are likely to be at a disadvantage.
2. Not Enough Collaboration Among the Reps
Are your sales reps on the same team or engaged in mortal combat with one-another? If the culture and processes of your sales organization do not encourage your reps to share stories of customer wins, objections, what worked and what didn’t work, then you are unlikely to get much horsepower out of your sales engine. Simple collaboration tools such as Salesforce Chatter when combined with the conviction of the sales leaders to promote a culture of teamwork can go a long way in cross-pollinating success.
3. You’ve Got Sales Rep 1.0
Are your sales reps still stuck in the 90s – extracting information from admin assistants and schmoozing the intern? There is an easier way to gather valuable information: online. It is second nature for today’s 2.0 sales reps to scan prospect’s LinkedIn profile, Twitter, Facebook feeds and the company announcements of their plans. When calling upon existing customers, there is a wealth of information on past purchasing and communications that can be a valuable source of insight before picking up the phone or showing up in person.
As more and more of consumer web technology integrates into sales intelligence, creative sales reps (3.0?) are finding new creative ways to land deals – using physical proximity information of LinkedIn contacts at conferences to strike meetings, real-time updates on job movements of their contacts to get first in line and so on.
4. Not Having a Measurement Model in Place
If leads and opportunities are the water, then the measurement model is the pipe that keeps the good stuff channeled and flowing in the right direction. Without the tools, processes, and culture of discipline, accountability, measurement and continuous improvement, the deals are likely to evaporate.
This blog from InsightSquared is a great place to start in terms of evaluating your current metrics and processes for sales effectiveness. There is hardly any all-star sales team that hits all the metrics every single time, but there is no excuse for not having the basic tracking, metrics and measurement model in place.
Such basic hygiene can go a long way in creating a meritocratic sales organization that rewards the right metrics and attacks the right problems. If you cannot measure it, you cannot fix it.
Now you’ve got the tools to solve the case of the missing quota. What are the common reasons for missed quota in your experience?