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“The Sales Organization Performance Gap,”  conducted by Steve W. Martin, a sales expert, author and noted sales researcher from the University of Southern California’s Marshall Business School, reveals that the best sales teams regularly set more aggressive goals, employ more structured sales processes and share more optimistic opinions about their team members and sales organizations.

Key highlights from the study, which was commissioned by Velocify and involved nearly 800 sales executives, managers and front-line sales reps, include:

  • High-performing sales organizations set higher quotas and expect fewer sales reps to meet their quota
  • Mediocre sales organizations were slower to fire underperforming sales reps
  • The best-performing sales teams were more likely to describe themselves as a “cohesive group”
  • High-performing sales organizations put more emphasis on structured sales processes and monitoring than average or underperforming organizations

“High-performing sales organizations share key operationalThe Sales Organization Performance Curve - Steve W Martin and cultural characteristics that average and under-performing sales teams often lack,” Martin said. “The detailed findings in this research can help executives and sales leaders identify key areas to focus on to build a highly successful sales team.”

Aggressive Goal-Setting, Team Mentality and Structure Drive Success

Three key differentiators separated the great sales teams, which saw higher annual revenue growth, from mediocre teams that experienced mostly flat or declining growth, according to the study.

 

Aggressive Goal Setting: The best performing sales teams consistently set higher quotas and expected fewer sales reps to meet quota.

  • 46 percent of respondents at high-performing organizations said that less than 60 percent of salespeople should make quota, compared to just 30 percent of respondents at average and under-performing organizations.
  • 18 percent of high-performing sales organizations indicated that salespeople will be terminated for poor performance after one quarter compared to only 2 percent of average and 5 percent of underperforming organizations.

Team Mentality: A team-oriented outlook was more Sales Organization Research - Steve W Martinprevalent among high-performing sales organizations.

  • High-performing sales organizations were nearly twice as likely to describe themselves as “a cohesive group of like-minded individuals” than people at lower-performing organizations, who more often described themselves as “a loose collection of individuals.”
  • The best teams also viewed individual talent as a lesser factor for sales success than mediocre groups but were less likely to have below-average salespeople – exhibiting a more unified sales culture.

 

Process-Driven: High-performing sales organizations were more likely to employ a structured sales process than others.

  • High-performing sales organizations were almost twice as likely as underperforming organizations to describe their sales processes as “closely monitored” or “strictly enforced or automated”.
  • High-performing sales organizations ranked “disciplined sales process and systems usage” as the second most important factor separating great from good sales organizations. They were also more likely to closely monitor lead follow-up than lower-performing organizations.

 

15 Key Differences Between High, Average and Underperforming Sales Organizations

The study results reveal significant differences between how high, average, and underperforming sales organizations set goals, perceive themselves, and structure their organizations. Below are 15 key attributes and performance-related metrics that reveal the gap that exists between high-performing sales organizations and average and underperforming sales organizations. Each of these factors help define and demonstrate optimum sales organization performance.

Goal–Setting - Set high quotas and compensate for achievement
1. High-performing sales organizations set higher quotas and believe in lower quota attainment than average and underperforming sales organizations.
2. Sales managers at high-performing sales organizations have higher quota risk pool factors, where the sum of all the quotas of their salespeople is significantly higher than the personal quota for which they are responsible.
3. High-performing sales organizations are not afraid to aggressively raise year-over-year annual quotas.
4. High-performing sales organizations attract top sales talent through better compensation.

Attitude - Team mentality and confidence in the company and the team’s capabilities
5. Sales managers at high-performing sales organizations indicated their teams have a higher percentage of top performers and a lower percentage of bottom performers than sales managers at average and underperforming sales organizations.
6. Sales managers at high-performing sales organizations rate the teams they manage more highly.
7. Salespeople and sales leaders of high-performing sales organizations rate the quality of their sales organizations more highly.
8. High-performing sales organizations describe their sales culture differently than average and underperforming sales organizations.
9. Members of high-performing sales organizations have a different perspective on the factors that separate great from good sales organizations.
10. High-performing sales organizations have a higher level of morale.

Structure - Expectations are followed up on and processes are put in place
11. High-performing sales organizations hold their team members to a higher level of accountability.
12. High-performing sales organizations are quicker to terminate underperforming salespeople.
13. Sales managers at high-performing sales organizations reported a higher percentage of their salespeople achieved their annual quotas.
14. High-performing sales organizations employ a more structured sales process.
15. High-performing sales organizations more closely monitor their lead follow-up process.

Goal–Setting - Set high quotas and compensate for achievement


1. High-performing sales organizations set higher quotas and believe in lower quota attainment than average and underperforming sales organizations.

Forty-six percent of members of high-performing sales organizations indicated that less than 60 percent of salespeople should make quota, compared to 30 percent of members of both average and underperforming sales organizations. In other words, quota attainment should not be easily achieved and quotas are expected to be aggressively set. Conversely, 52 percent of responses from underperforming sales organizations and 50 percent from average sales organizations indicated that more than 70 percent of salespeople should achieve quota.

Sales Performance 1 Steve W Martin

 

2. Sales managers at high-performing sales organizations have higher quota risk pool factors, where the sum of all the quotas of their salespeople is significantly higher than the personal quota for which they are responsible

A sales manager’s quota risk pool factor is calculated by adding all the quotas of the salespeople who report to him/her together and dividing the sum by his/her quota. For example, if a sales manager’s quota is $10 million and he has 10 salespeople who each have $1 million quota, his quota risk pool factor would be one. Forty-four percent of sales managers at high-performing companies have a quota risk pool factor greater than 1.25, compared to 26 percent for average and 27 percent for underperforming companies. Fourteen percent of high-performing sales organization managers have a quota risk pool factor greater than 1.75 compared to 3 percent at underperforming sales organizations.

Sales Performance 2 Steve W Martin

 

3. High-performing sales organizations are not afraid to aggressively raise year-over-year annual quotas.

Seventy-five percent of high-performing sales organizations raised 2014 annual quotas more than 10 percent over 2013 quotas compared to 25 percent for average and 17 percent for underperforming sales organizations. Annual quotas remained the same or decreased for 65 percent of underperforming sales organizations, 48 percent of average sales organizations, and only 14 percent of high-performing sales organizations.

Sales Performance 3  Steve W Martin

 

4. High-performing sales organizations attract top sales talent through better compensation.

Ninety-one percent of sales team members of highperforming sales organizations indicated that their compensation was at or above the average of the industry. Conversely, only 9 percent of high-performing companies paid below market average compared to 29 percent of underperforming organizations.

One surprising metric is that 35 percent of both highperforming and underperforming sales organizations compensate above market average. However, based upon the previous three points about performance and the talent quality of sales organizations, it can be interpreted that underperforming companies are actually overpaying to retain subpar talent, while high-performing

Sales Performance 4 Steve W Martin

Attitude - Team mentality and confidence in the company and the team’s capabilities


5. Sales managers at high-performing sales organizations indicated their teams have a higher percentage of top performers and a lower percentage of bottom performers than sales managers at average and underperforming sales organizations.

Sales managers at high-performing sales organizations indicated their teams are composed of 45 percent top performers, whereas top performers make up 29 percent of the team for underperforming sales managers. Only 14 percent of the team was identified as below-average performers by high-performing sales managers as compared to 24 percent for the managers

Sales Performance 5 Steve W Martin

 

6. Sales managers at high-performing sales organizations rate the teams they manage more highly.

Sales managers at high-performing companies were three times more likely to rate the team they manage as excellent compared to managers at average and underperforming sales organizations. Seventy-six percent of high-performing team sales managers rated their team as excellent or above average compared to 57 percent at average sales organizations and 51 percent at underperforming sales organizations. Fortynine percent of sales managers at underperforming organizations rated their team as average or below average compared to 24 percent of sales managers at high-performing sales organizations.

Sales Performance 6 Steve W Martin

 

7. Salespeople and sales leaders of high-performing sales organizations rate the quality of their sales organizations more highly.

Twice as many salespeople and sales leaders at highperforming sales organizations rated their organization as excellent as compared to respondents at average and underperforming organizations. In addition, 78 percent of high-performing team members rated their organization as excellent or above average compared to 51 percent of average and 49 percent of underperforming team members. Only 1 percent of highperforming team members rated their sales organization as below average compared to 10 percent of average and 8 percent of underperforming team members.

Sales Performance 7 Steve W Martin

 

8. High-performing sales organizations describe their sales culture differently than average and underperforming sales organizations.

Survey participants were asked to select from three different descriptions that best describe their sales organization. Were they part of “a cohesive group of likeminded individuals,” “a team of seasoned professionals,” or “a loose collection of individuals”? Thirty-eight percent of high-performing team members selected “a cohesive group of individuals” compared to 21 percent of average and 23 percent of underperforming team members. Forty-three percent of average team members selected “a team of seasoned professionals” compared to 36 percent of high-performing responses.

Only 26 percent of high-performing team members selected “a loose collection of individuals” compared to 37 percent of underperforming and 36 percent of average team members. The results suggest that the optimal sales culture is one where the sales team members are engaged, connected, and collaborating as part of a team.

Sales Performance 8 Steve W Martin

 

9. Members of high-performing sales organizations have a different perspective on the factors that separate great from good sales organizations.

Study participants were asked to rate seven different factors as to their importance in determining whether a sales organization is good or great. In general, high-performing sales team members placed action-oriented factors at the top of their list, including lead generation and pipeline activity and disciplined sales process and systems usage.

Underperforming sales team participants placed more personal, skills-based factors at the top of their list, including sales team morale and collaboration, talent of salespeople, and quality of sales leadership. One interpretation of these results suggests that high-performing sales teams think in terms of strategic sales process management, while underperforming sales teams are more focused on personal sales prowess.

Sales Performance 9 Steve W Martin

 

10. High-performing sales organizations have a higher level of morale.

Fifty-six percent of high-performing team members indicated that their sales organization’s morale was higher than most sales organizations’ compared to only 11 percent of average and 21 percent of underperforming sales team members. Conversely, 35 percent of underperforming sales team members and 27 percent of average team members indicated that
their sales organization’s morale was lower than most organizations’, while only 4 percent of high-performing organizations responded similarly.

Sales Performance 10 Steve W Martin

 

Structure - Expectations are followed up on and processes are put in place


11. High-performing sales organizations hold their team members to a higher level of accountability.

Study participants were asked whether or not they agree with the statement that their salespeople are consistently measured against their quotas and held accountable for their results. Twenty-nine percent of high-performing sales team members strongly agreed with that statement, while only 13 percent of underperforming sales team members did.

Sales Performance 11 Steve W Martin

 

12. High-performing sales organizations are quicker to terminate underperforming salespeople.

Eighteen percent of high-performing sales organizations indicated that salespeople will be terminated for poor performance after one quarter compared to only 2 percent of average and 5 percent of underperforming organizations. Seventy-eight percent of high-performing sales organizations indicated that a poor performer will be terminated within a year compared to 63 percent of average and 52 percent of underperforming sales organizations. Nine or more quarters are required to terminate an underperforming salesperson according to 12 percent of underperforming and 8 percent of average sales organizations while no high-performing sales organizations indicated it should take that long.

Sales Performance 12 Steve W Martin

 

13. Sales managers at high-performing sales organizations reported a higher percentage of their salespeople achieved their annual quotas.

Sales managers at high-performing sales organizations reported that 60 percent of their salespeople achieved their annual quotas as opposed to 49 percent of the salespeople at average sales organizations and 56 percent of salespeople at underperforming sales organizations.

Sales Performance 13 Steve W Martin

 

14. High-performing sales organizations employ a more structured sales process.

Fifty percent of study participants from high-performing sales organizations responded they had sales processes that were closely monitored, strictly enforced or automated compared to just 28 percent from underperforming sales organizations. Forty-eight percent of the participants from underperforming sales organizations indicated they had nonexistent or informal structured sales processes compared to only 29 percent from high-performing sales organizations.

Sales Performance 14 Steve W Martin

 

15. High-performing sales organizations more closely monitor their lead follow-up process.

More high-performing study participants indicated their lead process was well-documented, closely monitored, strictly enforced, and automated compared to their counterparts from average and underperforming organizations. In fact, the study found that average and underperforming organizations most often have an informal process for lead follow-up while highperforming organizations most often have lead follow-up processes that are monitored and enforced.

For example, 47 percent of high-performing sales organization study participants indicated their lead follow-up process was closely monitored and enforced compared to 32 percent of average and 36 percent of underperforming sales organizations.

Sales Performance 15 Steve W Martin

 

 

The findings of the study were based on anonymous responses to a 42-question survey of nearly 800 sales professionals, including quota-carrying salespeople, sales managers and top-level sales executives. 

 

Research Sponsored By Velocify: Selling at the Speed of Opportunity

Velocify_LogoVelocify is a market-leading provider of cloud-based intelligent sales software, designed for high-velocity sales environments. Velocify helps sales teams keep pace with the speed of opportunity and increase revenue by driving rapid lead response, increased selling discipline, improved productivity, and actionable selling insights. The company has helped more than 1,500 companies across a variety of industries improve customer acquisition practices and sales performance.

“We are excited to release this new research intended to help sales leaders improve team performance,” said Nick Hedges, president and CEO at Velocify. “This research validates that successful sales organizations are not only striving for improved team cohesion, but they’re also looking to process-driven sales technology, like Velocify, at fast growing rates in order to accelerate performance and revenue.“

Learn More About Velocify.

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