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The Wrong Salespeople are Hired 77% of the Time

Posted by Dave Kurlan 

94% of sales managers are optimistic about their salespeople.  That's a very surprising statistic for a couple of reasons:

  1. 50% or more of their salespeople won't hit their quotas this year and haven't since at least 2008.

  2. Objective Management Group's (OMG's) findings from the evaluations and assessments of 1.8 million salespeople show that 50% of all salespeople are weak.

Sales managers believe that 50% of their salespeople are good and 44% of their salespeople have potential.  Of course, they are using subjective, rather than objective approaches to measuring what "good" is.

How do you measure good?

  • Salespeople consistently meet or exceed quota or expectations

  • You like your salespeople, they work hard, don't give you any trouble, are positive, don't miss quota by too much, sometimes bring in good customers, are advocates of the company and brand, and are good influences, etc.

Unfortunately, a lot of sales managers choose the second option.

Why? Many sales managers aren't very good at what they do!  Only 10% of all sales managers are effective at  both coaching and coaching consistently and when it comes to holding salespeople accountable, they aren't much better.  Review the table below: 

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  •   60% of all salespeople make excuses for their lack of performance

  •   37% of all salespeople lack commitment for sales success

  •   20% of all salespeople are not motivated to achieve sales success

  •   67% of all salespeople lack the minimum required Sales DNA for success in their roles

It's no wonder that sales managers are ineffective.  While there is clearly work to be done in the area of coaching, the real problem is that they begin with the wrong salespeople!

Between sales management and HR, the wrong salespeople are selected as often as 77% of the time!  And then we wonder why their salespeople don't hit quota, why sales managers can't coach them up and why sales managers aren't quicker to terminate and replace under performing salespeople.  There's a fantastic chance that they'll replace them with someone even worse!

The first set of numbers above are for all salespeople.  When we focus on the bottom 50% - the ones that don't hit quota, the ones who make up the majority in all sales organizations, it looks even worse:

  •   67% of weak salespeople make excuses

  •   53% of weak salespeople lack commitment for sales success

  •   30% of weak salespeople are not motivated to achieve sales success

  •   97% of weak salespeople lack the minimum required Sales DNA for success in their roles

Obviously, the biggest difference between all salespeople and the bottom 50% is their Sales DNA.  And the difference between weak and the elite top 5% is 4850%!  That's why when good and bad salespeople interview for sales positions they appear to be essentially the same.  Their Sales DNA, or lack thereof, rarely surfaces unless you know which questions to ask and how to ask them.  So if you're wondering whether you can be fooled when interviewing salespeople, the data would suggest that if half of all salespeople are weak, and 97% of that group have inadequate Sales DNA, then you are being fooled at least half the time.

There are also two huge gaps, one that shows the elite top 5% are highly motivated 2,000% more often and have strong commitment 1766% more often than their weak counterparts.  This amazing article shows the correlation between motivation and performance.

That's the primary reason why more and more companies have turned to assessments. According to CSO Insights 2018 Sales Talent Study, companies that use assessments have 61% quota attainment and 14.6% attrition, versus 49% quota attainment and 19.8% attrition for those who don't use assessments.  Companies that use assessments are 25% more successful at quota achievement and that data is not even for any particular assessment.  Imagine how much better the results are for the companies that use OMG's accurate and predictive sales-specific candidate assessmentsData from companies who have hired salespeople that were recommended by OMG shows an attrition rate of only 8% and quota attainment of 88%.  

If you use OMG's sales-specific candidate assessments to filter and select your salespeople, you are less likely to make a hiring mistake than if you use an assessment that lacks predictive capabilities, and far less likely to make a mistake than if you don't use any assessment.

Assessments are main stream - there are hundreds of them - and companies that ignore them are knowingly adding unnecessary risk and stunted growth to their revenue streams.  According to Forbes, the cost of a bad hire is $240,000.  But that's not for a sales hiring mistake - that's a generic hiring mistake.  Factor in lost opportunities, lost customers and lost revenue and that number can quickly and easily exceed $1 million per salesperson!

Why wouldn't you invest a tiny fraction of that to avoid costly mistakes?  It's not like there's any risk.  Take OMG for instance.  As you can see from the screenshot below, it's been used on more than 1.8 million salespeople to hire more than 76,000 salespeople in more than 26,000 companies in 200 industries from 43 countries since 1990.  That says proven and time tested. 

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As for the accurate and predictive part, consider that of the candidates who are not recommended by OMG, but get hired anyway because the company is either desperate or stubborn, 75% fail within 6 months.  And of the candidates who are recommended and eventually hired, 92% rise to the top half of their sales organizations within 12 months.  Very accurate and predictive. 

Check out OMG's Sales Candidate Assessments here.

Last Day Madness on the Sales Force - That's One Kind of Urgency

Posted by Dave Kurlan on Mon, Nov 05, 2018 @ 20:11 PM



The 2018 World Series is in the rearview mirror, my family can go to sleep at a normal time again, and sports fans can finally devote their attention to Basketball, Hockey and Football (and soccer okay?  You got me to say it).  I'm still getting calls and emails asking if I've come down from cloud 9 over the Red Sox world-series victory but I keep explaining that I was never on cloud 9.  The series victories over the Yankees, Astros and Dodgers, all 100-win teams in their own right, were too easy. There wasn't enough drama, tension, adrenaline or doubt.  There was no sense of urgency.  That's the topic for today - urgency.  Check out the table below:

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As you can see in the table, each clinching victory became bigger than the one before it as final days of the month, quarter and year increase in importance to a company.

If a company has the month won, the quarter in the bag, and even the yearly revenue goal met by the end of November, there isn't any drama, doubt, tension, or urgency.  They just keep on selling without any pressure.  

We know that 50% of sales reps won't hit their quota this year because the same thing has been happening for years without signs of improvement.  That's not surprising given that the data from 1.8 million salespeople evaluated and assessed by Objective Management Group (OMG) shows that the bottom 50% of salespeople are very weak.

Most sales managers don't have their months, quarters and years end like the Red Sox did.  They're pushing, pulling, demanding, asking, strong-arming, discounting and screaming to get the deals in, all because the deals were never closed in the first place.  If customers will place their orders on the 30th of the month, they would have placed them on the 20th if the salesperson was effective.  But prospects have learned that if they hold out, the call offering a discount will come through at the end of the month.  And the difference between good and crappy salespeople?  The ability to create Urgency.  This article shows how Elite salespeople create urgency 326% more often than weak salespeople!  

There's one other factor at play in last day madness.  Crappy sales managers are part of the mix too and effective coaching, as you can see in this article, is achieved by only 10% of all sales managers.

There will always be urgency to win. - The question is simply, will you create the urgency and eliminate last day madness, or by failing to create urgency, require unnecessary urgency - madness - on the last day instead?

Image Copyright iStock Photos

Golden Nuggets from the CSO Insights 2018 Sales Talent Study

Posted by Dave Kurlan 

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I had a chance to review the CSO Insights 2018 Sales Talent Study and extracted some fascinating data.  I thought it might be interesting to take their data, overlay some of Objective Management Group's (OMG) data, and see what we can take away from that.

Tick-Tock.  The report reveals that open sales positions remain so for an average of nearly 4 months and 9 months pass before a new hire achieves full productivity.  That's over a year!  This particular finding is a moving target and somewhat reflective of the relatively small number of proactive sales candidates and far smaller percentage of good ones.  The report shows that only 22.6% of organizations believe that hiring is an organizational strength, so this recruiting performance shouldn't surprise anyone.  OMG has a finding called FIOF (Figure it out Factor) which correlates to how quickly a candidate will ramp up to speed. Candidates who come up to speed more quickly than typical sales candidates score 75 or better and only 25% of all candidates have this as a strength.   

Not Nutritional.  Western diets are notorious for their inclusion of unhealthy, unnecessary, processed, fatty food instead of healthy whole foods.  Similarly, companies listed sales requirements for new salespeople that were filled with unnecessary requirements (ie., business degree from a university, college degree of any kind, STEM degree, industry sales experience, emotional intelligence, etc.) instead of strong and broad capabilities in the 21 Sales Core Competencies.  This suggests that companies still lack a basic understanding of what causes salespeople to succeed.

Tooling.   An equal number of companies use candidate assessments as those who don't.  However, those who do use assessments have 61% quota attainment and 14.6% attrition, versus 49% quota attainment and 19.8% attrition for those who don't use assessments.  Companies that use assessments are 25% more successful at quota achievement and that data is not even for any particular assessment.  Imagine how much better the results are for the companies that use OMG's accurate and predictive sales-specific candidate assessments. Data from companies who have hired salespeople that were recommended by OMG shows an attrition rate of only 8% and quota attainment of 88%.  

Put Me in Coach.  Just 10% of the companies said that coaching was a strength.  That jives pretty well with OMG's data from its evaluations of more than 25,000 sales forces.  Only 10% of all Sales Managers have the Sales Coaching competency as a strength but most of that group are in the top 20% of all sales managers.

Two-Step.  38% of companies reported that they have a sales process.  Respondents appeared to be overly optimistic as OMG's data shows that only 27% of companies actually have a formal, structured sales process.

Right Down the Pipe.  20% claimed that pipeline management is a strength at their company but that claim is even more optimistic than the dance above.  Remember, their report is built from a survey so it's vulnerable to optimistic misstatements.  OMG's sales force evaluation data reveals that the actual number is 8%!

In conclusion, I'm still disappointed that these numbers aren't improving more quickly.  I believe that there are several reasons for this, but my top 3 are:

  • Too many sales leaders have large egos that don't allow them to ask for or receive help, believing that they and they alone are responsible for, and capable of moving the needle

  • The C Suite often delegates responsibility for change but change won't occur until the commitment to change is demonstrated to the sales organization from those at the very top of the company

  • Many companies are well intentioned about change but don't always make the best choices and don't always see those choices through.  Exhibit #1 is CRM.  My observation of CRM selection, installation, training, customization, integration, acceptance, and adoption is that it has been nothing short of an industry-wide cluster fuck.  Please excuse my language.

Of course there are more reasons than these 3 but most of them, when looked at objectively, can be traced back to these three.  For example, we can consider the people, coaching, training, strategy, systems, processes, expectations, accountability, motivation, culture, and more, but as soon as you seek the cause we must look to the original three reasons.

In the end, it's not usually an unwillingness to spend money to improve sales selection, provide the right tools, hire the right sales leaders, consultants and trainers.  It's the lack of unconditional commitment to get it right.



THREE BEST INFOGRAPHICS TO PREPARE FOR NOVEMBER SALES

Over the past several years, retail sales continue to skyrocket during the Thanksgiving holiday. We have found three, must-know infographics that will help you prepare for everything from how much a person spends on siblings versus spouse to the biggest shopping days and times.

NOVEMBER SALES KEEP GROWING

In 2017, e-commerce sales on Cyber Monday amounted to $6.59 billion, making it the largest online shopping day in U.S. history. While the majority of e-commerce dollars was still spent on desktop devices, smartphones (23%) and tablets (10%) accounted for one third of online sales in the 2017 holiday season.

Infographic Source: Statista

IMPORTANT DATES

To get the most out of your sales this year, you’ll need to plan around these important dates

  Infographic Source:    Omnisend

Infographic Source: Omnisend

WHAT TO EXPECT THIS YEAR

Want a breakdown of what we can expect this year? Here is a great detailed infographic by Domo that shares everything from how much people spend on their BFF to what time of day is most busy.

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Infographic Source: Domo