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Maximize Sales Effectiveness Through Communication
A new TAS Group study finds the disconnect between management and reps can erode a sales force's ability to close deals and hit quotas.
Posted Feb 28, 2007
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More than half of companies say that less than 50 percent of their salespeople make their quota, based on new research from The TAS Group. In addition, the report notes that American salespeople lack deal-closing skills compared to their European and Asian counterparts. "Salespeople are hired to make quotas. The number of companies where this is not happening is quite staggering when you consider the associated expense and missed opportunity," says Donal Daly, CEO of the TAS Group. "With this degree of inherent uncertainty in their sales organizations, it's understandable that it can be hard for public companies to accurately forecast their revenues and actual results." The problem lies in the different perspectives of individual salespeople and that of sales management, leading to suboptimal sales effectiveness, according to the study, "TAS Index Global Sales Effectiveness Benchmark Study 2007." While nearly three out of four (72 percent) sales managers believe that their sales process is well defined, only 50 percent of sales reps agree. Additionally, 48 percent of managers think they spend time coaching (not chasing the reps for updates), while just 34 percent of reps agree. Similarly, 58 percent of reps believe they close deals when originally forecasted, while only 46 percent of managers agree. The results show that companies using a sales methodology more than half the time do much better than those that don't. Among those sales forces, the number of salespeople who make quota is 50 percent higher than those who don't and the percent of sales proposals resulting in a sale is 77 percent higher. European salespeople scored similarly to Americans in terms of sales effectiveness, but they appear better at generating sales opportunities, deal close rates, and maximizing value creation in those deals. American reps, however, are better at managing the sales cycle. Compared to their counterparts in Europe and Asia-Pacific, Americans seem to be worse at closing deals, supporting their channel partners, and disseminating a standard sales process throughout the sales organization.
Despite this apparent inferiority, the report shows that European and Asian salespeople can learn from their American counterparts when it comes to integrating the sales organization with the rest of the company, reporting that Americans have better alignment with marketing and the overall company strategy. The survey also garnered responses from across verticals, including communication, financial services, high-tech, insurance, and the medical industries, of which sales people from in financial services ranked best, while insurance people ranked last in effectiveness. While there is typically misalignment between the sales force and leadership, Daly says that it's usually a quick and painless fix. "Management and reps don't always have the same objectives," he says. "The challenge is to enable sales management to help the sales individuals rather than just manage them. When considering sales management systems or procedures, a focus on answering the 'What's in it for me?' question from the reps can deliver uncommon alignment and productivity." The alternative can get ugly and results in deals being lost, money being left on the table, and increased turnover in the sales force. Related articles: That Dog Must Hunt Your Sales Process Is Your Own
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