It’s a time of year many businesses dread.
With the first half of 2016 behind us, some sales teams are getting increasingly worried that they won’t make their annual quotas. Barely more than half (54.6%) of the nation’s sales reps hit their marks each year, according to CSO Insights, which tracks sales performance.
But there are proven ways to beat the odds – steps I’ve used at my company and have been implementing ever since I was a door-to-door salesman.
Here’s what leaders should do this summer to get their teams on the right track.
It’s easy to get lost in day-to-day events: a certain-looking deal falls through; a seemingly loyal client doesn’t call back; a promising lead gets stuck in the pipeline. It’s time to pull out of the weeds and take a look at the big picture.
First, do a broad deep-dive analysis of your sales so far this year. These are some of the key questions to answer:
- Do you believe it’s still possible to reach the quota?
- How far are you from the pace you need to reach the quota?
- Does the team believe they can improve their collective performance?
- Who on your sales team is on track, and why? What are they doing right?
- How many prospects were approached? At what stage(s) did prospects check out?
- When did your team start to fall behind? Was there any month your team hit the target?
- What activities led up to that good month, and which had the greatest positive impact?
Gather the data. Get answers that you can act on. Then proceed to the next step.
Calculate your metrics
Crunch the numbers. Determine exactly what’s happening in and around your pipeline, and ask yourself:
- What percentage of initial prospects made it all the way through to a sale?
- What percentage of clients who agreed to a meeting or demonstration ultimately went on to buy?
- How long does it take for a prospect to convert to a new paying customer?
You need to measure conversion rates and velocity for the overall team, as well as individually for each salesperson.
Calculate backwards to clarify the absolute effort you need from everyone. To get the number of sales you need, how many prospects do you need to approach? How many meetings and demonstrations? How many proposals? And how efficiently can all this be achieved?
Adopt ‘activity-based selling’
Use these figures to establish weekly and even daily goals for activities. Have your teams focus on making those goals each day.
Most salespeople focus on the end game, constantly stressing about the annual quotas. Instead, get your reps thinking about their daily behaviors. As we explain in our Ultimate Guide to Activity-Based Sales, this leads to greater focus, confidence, and success.
CSO Insights found that when companies adopt a formal process for their sales teams by which to operate, they make quotas 60% of the time (compared to the average of 54.6%). And when businesses adopt a “dynamic” process – frequently examining and tweaking the activities and actions expected – the success rate jumps all the way up to 72%.
Look in the mirror
As a leader, it’s also important to take a good look at your own role and ask how you can do better. Ask yourself:
- Did I check in often enough on the pace of our sales?
- Did I hold enough meetings, or too many?
- Did I create enough urgency?
You also need to assess whether your quotas are realistic or pie-in-the-sky – at this point, and when you originally set them. Having all the metrics in front of you can help you decide whether the problem isn’t just underperformance, but also inflated or unreasonable expectations.
Doing all this means little unless your team is ready to break bad habits, which is never easy. It’s easier to stay in the established routine and hope for the best. So expect to get involved in making the changes you identify a working reality – be ready for a tough fight. But taking these steps now, when there’s still nearly half the year left, is worth the work.
Because when you look back at the end of the year, you’ll see just how well it paid off.
– Timo Rein is the co-founder of Pipedrive.