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Why 83% of Sales Teams Fail and What to Do About It

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As a consultant, I've seen companies make some costly mistakes with regard to sales.

How do I know? In 1998, as a pioneer for converting a reactive customer service team of a Fortune 500 conglomerate to a proactive sales force, I made similar mistakes-mistakes ranging from placing reactive people into proactive roles to using personality tests to aid in hiring

Failure was evident. We began to lose market share fast and had to make changes. And we did.

We uncovered a secret that changed our way of thinking about sales and sales management, which still cause many companies to struggle today. Instead of wasting energy on the actual sales results, we shifted our focus and energy to the activities that led to the desired sales results. We maintained a maniacal focus on the science of selling.



We also discovered the behaviors which influenced the art of selling that ultimately reduced turnover, improved sales results, and improved customer and associate satisfaction. What I am going to share with you is proven to be efficient and effective, as it has converted multimillion-dollar business units of Fortune 500 companies from worst to first in six months and is quickly finding its way into some prominent sales cultures.

I must warn you that the methodology behind our system interrupts the traditional thinking and the status quo. We intend to change the current sales paradigm. How? It's simple.

Hiring sales representatives has always been a challenge because you never know what you are getting until after the candidate is hired. Often, bad hiring decisions have led to higher training and turnover costs. In addition, there are significant costs associated with poor sales productivity. Recent studies show the costs of a poorly performing sales representative are greater than $100,000 per year.
As stated previously, we adopted the use of "personality tests" containing numerous predictive indicators to assist the decision making in the selection of sales representatives. Unfortunately, this only added to our overall costs because they did not work. Why? Here is what we learned:

There is no proven correlation between personality and sales productivity. A person's personality has no bearing on how he or she will perform in a sales role. Theoretically, personality tests may identify if someone has the skill; however, if he or she lacks the desire, what's the point?

Far too often, sales managers are perplexed when a person with supposed promise, based on the personality results, falls short of expectations. As a result, more money goes into training areas that are not cost effective (motivational speakers, tapes, etc.). Another false positive of personality tests: we found that the questions are often predictable and easily manipulated by the very people the tests tell you to hire (Victor Wesley Report, August 2006).

I was fortunate to have worked with Dr. Dave Barnett, who has a Ph.D. in Behavioral Science and has done some astounding work in his 30-plus years of sales research. He co-authored Earning What You're Worth: The Psychology of Sales Call Reluctance, and in his research we found out that 80% of sales reps fail because of poor contact initiation. There are behavioral or emotional barriers that prevent sales reps from initiating contact with customers or prospects. The successful sales reps are the ones who are comfortable and consistent with respect to initiating contact. So what does this mean?

High-performance sales results are behavior driven, not personality driven. Yet based on a 2006 survey we conducted of companies with gross sales over $50 million, it is estimated that 83% of them use personality-based selection systems when selecting sales reps. Additional research showed that of the 83% who use personality tests, 98% expressed dissatisfaction with their sales results and turnover rates.

Essentially, 83% of these companies are set up to fail in areas such as sales results, turnover, etc., because they are using incorrect indicators. It's like trying to take a road trip in London using a map of the United States.

Our cutting-edge system is rooted in Dr. Barnett's 30 years of research. It starts with a 30-minute online assessment built on the 21 behaviors proven to impact sales productivity through the art and science of selling. Additionally, the assessment includes self-validating tools to alert end users if a candidate tries to manipulate the data. The data is transformed into a valuable electronic (two pages), easy-to-read sales-intelligence report.

In validated studies, we have found the system to be more than 90% accurate in predicting sales behavior within the initial six months of joining an organization. The benefit is that you know the candidate's sales potential (high, average, or low) within six months of his or her joining your organization before you hire him or her.

Imagine having this intelligence as you interview, negotiate compensation, and discuss payouts—it's a powerful tool.

In addition to being a selection tool, our systematic process has built-in management and development tools. Would it be helpful to know how a person's selling style will impact your customers? Your business? How should the sales rep be managed? Again, imagine having this intelligence before he or she is hired.

With regard to development, we knew within seconds of completing the assessment whether a candidate had specific behavioral or emotional barriers that would affect how he or she used the six different contact approaches for sales: telephone, networking, speaking to high-net-worth people, referrals, presenting, and canvassing. If a particular business unit required more telephone sales, we selected only the new recruits who met initial criteria and were strong, based on the assessment results, in using the telephone. For existing sales reps, we were able to identify key areas for customized training.

Does it really work? In one instance, we worked with a $20 billion-plus business unit of a company. The unit was notorious for poor performance, and no one could truly understand why. In our assessment, we recognized and recommended that 50% of those in management and 40% of the sales reps be replaced. Why? Based on their actual assessments and research, the unit struggled in the areas of motivation, execution, and securing business. The division head agreed. As they reloaded, the new recruits needed to meet certain hiring criteria. They needed to score highly in three basic behaviors that were not cost effective to train:
  • energy
  • strong sales initiative
  • strong goal focus
In six months, we were able to:
  • convert the unit from worst to first
  • reduce employee turnover
  • increase employee and associate satisfaction
The unit is a $60 billion unit today.

Since then, we have customized the system to:
  • accept and screen resumes electronically
  • administer the appropriate online assessment
  • forward only prequalified candidates based on the hiring criteria established
The benefits to administrators are:
  • improved sales results by hiring top-performing salespeople
  • reducing the hiring process to a fraction of the standard time
  • decreasing turnover costs because the right people are being hired
If you have a system to assist you in selecting top-performing salespeople, manage the behavioral art and science of selling, and develop a maniacal focus on execution, Sales is Simple.

About the Author

Rod McKinnis has helped to improve the sales results of many prestigious companies in various sales environments. To learn more, visit www.salesissimple.com.
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 United States  behaviors  customers  Fortune 500  August 2006  fail  wasting  aid  management  Ph.D.


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