Are Your Managers Hanging On to Bad Sales Reps?

Today's blog post is by Christopher Cabrera, CEO of Xactly Corporation, the industry leader in sales compensation automation.

 

One of the benefits of collecting detailed data is the insight you can glean about your company's training needs. Armed with information that clearly highlights each field rep's strengths and weaknesses, sales managers can devise training plans that are tailor-made for each individual.

Great plan!

But while so much coaching advice focuses on field reps, another group has been all but overlooked: the sales managers themselves.

This year, Xactly enlisted researchers from the Massachusetts Institute of Technology (MIT) to help us analyze some of the 200 million transactions we handle each month,  and some interesting patterns emerged when we looked at sales managers and their relationships to field reps. In the coming months, we'll report on our findings in more detail.

We're still interpreting the data, but our hypothesis is that many managers, if on the borderline of attaining their quotas, tend to keep low-performing salespeople on the books for too long. Those managers would rather keep underperformers on the books to generate even a few sales rather than the guaranteed zero sales they'd get if they fired the bottom tier.

That can have worrisome implications for company leadership. It doesn't do your company any favors to have bad salespeople representing you. They can tarnish your hard-earned reputation, blow solid leads, anger potential customers, and lose a lot of deals.

How did we come to this supposition? Through a lot of digital legwork. Our extensive study looked at data from

• 22 million transactions
• 7,492 sales managers at 244 firms
• 61,092 of their immediate subordinates
• 134 million events on which an individual is credited
• 5,897 distinct incentive plans

Here's some of what we found regarding sales managers:

• When managers were on target to hit their quotas, sales-rep turnover was 22.2 percent. If the managers are on track, there's no benefit to keeping salespeople who aren't up to snuff.
• When managers were clearly going to miss their quotas, turnover of sales reps was 18.6 percent.  If there's no advantage to keeping poor performers, managers will go ahead and cut them loose early.
• When managers were on the margin of making quota, when every little bit counts, sales-rep turnover was only 5.6 percent. The sales managers held on to bad reps if they considered them essential to achieving their own quotas.

The message here? You want to monitor your poor performers to determine if you should be coaching them or letting them go. But along with that, be sure to monitor the managers who might be protecting them. You don't want to waste good leads on bad salespeople.

This is just one facet of the data MIT is analyzing with Xactly. Look for more as we develop it further and create benchmarks beyond single companies. Our use of the most current technology, multitenant SaaS, allows us to gather this information across companies and industries.

We'll use this information to help us – and you – learn more about quota attainment and quota-setting trends, and learn more through benchmarking.

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Comments

[MicroSourcing]

It's quite possible that sales managers contribute to counter-productive practices in your sales team. As this article puts it, there are managers who possibly protect sales reps with poor performance. To a certain extent, their leadership might also contribute to their reps' poor sales generation.

[trish bertuzzi]

Wait, I am being dense. Can you help me? Here is what I read..

On quota 22.2% attrition

Missing quota 18.6% attrition

Almost making quota 5.6%

How does this all tie together? Isn't it better to almost make quota than to miss quota? What is the moral of this attrition to quota achievement story? Help me.....

[Create Facebook Page]

If you're looking for predators when you hire, you're going to end up with people who will do anything–including screwing your company–in order to make the sale. In other words, take responsibility for creating the problem. Then fix it.