Innovation

Dump Your Sales Duds

It's high time you stopped trying to save your laggards and started focusing on your stars

Written by Matthew Cook

If your company is like most businesses, the people on your sales team have a wide variety of skill sets, attitudes, behaviours and performance levels. And you’ve probably looked at your top sales reps and asked yourself: why can’t all our reps perform at that level?

A company with a 10-person sales team would probably break out like this:

  • It has two top-performing sales reps
  • It has six average reps—some with potential, some without
  • It has two underperformers—in other words, duds

If you were the sales manager, what would you do? If you were like most, you’d jump in and try to save the struggling reps. After all, it’s a natural impulse to want to rescue someone who’s drowning. So you’d dedicate huge amounts of your time to them—coaching, mentoring and going on sales call after sales call, waiting for signs of improvement.

Sadly, this effort is almost always in vain. Six months later, you’d very likely end up firing the rep—if he hadn’t already quit by then. Given the high cost of having to replace a sales rep, if you really want to make an improvement in your sales numbers, here’s what you need to do: fire your duds and work on your studs.

Here’s why.

Let’s assume that your two duds each generate $200,000 a year in revenue, your average reps $300,000 each and your top performers $550,000 each. That adds up to total sales of $3.3 million, or an average of $330,000 per rep.

Yet, what matters most isn’t the average, but the wide variations in performance. Your bottom two reps, Jill and Larry, are together bringing in $400,000 of revenue, about 12% of the total. Most business owners and sales managers who looked at these numbers would say to themselves, “If only I can get Jill and Larry to bring in an extra $200,000 between the two of them, we’d be doing fine.”

But don’t kid yourself. If you do a simple percentage calculation, you’ll see why keeping your two duds around for another minute is such a losing proposition. Getting them to that “doing fine” level—which would still leave them a bit behind your average rep—would require them to increase their production by 50%. That’s enormous!

If they haven’t proven up to this point that they can raise their performance this dramatically, what makes you think they will now? If Jill and Larry have already been trained and coached like everyone else on your sales team, why would another round of these activities make much difference?

Here’s the problem: your weakest performers eat up the most time and energy of the sales manager or business owner. You need to take an unsentimental look at this. What ROI could you reasonably expect from spending any more time trying to get your duds up to snuff?

To appreciate how severe a problem your duds are, it helps to visualize the management of your salespeople as if they were racehorses. Imagine a racetrack in which two of your horses—your average performers—are running 50% ahead of your underperformers. Think of each lap as one month’s worth of selling. Over time, the gap between your average horses and your laggards will become so enormous it will become impossible to close.

There’s something else that’s critical to understand: this race never ends. The horses keep running and running, and the lead of the faster ones continues to compound.

This ever-increasing gap between your average horses and your duds—and the vastly bigger one between your first and your worst—is a measure of the opportunity cost of hanging onto your laggards. If you add up all the missed sales, wasted management time, money spent on salaries and damage to your brand, it will become painfully clear why you need to put your slow horses out to pasture.

Now, let’s take a look at two of your six average performers. Ashley and John, who’ve been with you for a few years, each bring in $300,000 a year in revenue—a bit below the team’s average. You see a ton of potential in Ashley, who has the skills and drive needed for success. John, on the other hand, has pretty much maxed out in terms of his ability. He can continue to chug along, bringing in $300,000 a year. He’s just good enough to retain, but you shouldn’t spend any time trying to boost his performance.

It’s Ashley who’s capable of much more. A 33% increase in her production would yield the $100,000 lift you want. Furthermore, if you were to fire your underperformers and give Ashley those accounts, you could move her even closer to your top performers almost overnight. By spending the time coaching and mentoring Ashley instead of John or your two duds, you’ll get a far higher ROI.

Now, let’s assume that your stars, Sharon and Scott, could each boost their production by $100,000. That’s an increase of about 18%—a significant but realistic improvement. And these reps already possess the skills and drive needed for success.

Despite this, few companies grasp that the best ROI comes from helping your stars shine more brightly. Sales managers typically leave their top performers pretty much alone, instead spending most of their time with their average reps and especially their duds. That’s a shame, because even top performers can get substantially better at their jobs.

Going on sales calls with your stars, coaching them and providing them with more administrative help can take them to at least the next level. As well, most top performers will appreciate the attention and praise you give them, something most firms won’t offer them. As for the average performers, they’ll either have to pull up their socks or find themselves relegated to dud status and then out the door.

If you keep in mind the image of a racetrack in which your sales studs are repeatedly lapping your duds, you’ll see clearly why you should focus your efforts on the Sharons and Scotts in your world—and fire the Jills and Larrys. Your business and customers will thank you for it.

Matthew Cook has 17 years of sales and sales management experience, primarily in the financial services and staffing industries. He is founder of SalesForce Search Ltd., which was No. 4 on the PROFIT HOT 50 ranking of Canada’s Top New Growth Companies in 2010 and No. 19 in 2011.

More columns by Matthew Cook

Originally appeared on PROFITguide.com