According to a report published by The Bridge Group, a Massachusetts-based sales strategy organization, 42% of companies it surveyed said that less than 50% of sales reps were meeting or exceeding their quotas.
Training and coaching can and does help most reps improve performance, but some just don’t benefit from education or guidance. Despite attention, some remain on the bottom tier, year after year, with little or no improvement. Yet managers continue to hold on to these poor performers. Why?
Many sales managers retain ineffective reps because they are on the edge of meeting their sales quota. A few sales, these managers believe, are better than no sales. But the cost of keeping bad performers may outweigh the benefit of meeting quota. Even one solid lead lost to the competition is a price that’s too steep to pay.
To help you gauge when it’s time to say goodbye to a bad rep, make the following three steps part of your regular routine:
- Monitor reps in the lower tier closely to see if they improve with training and coaching. If data shows that a rep’s performance remains poor quarter after quarter, year after year, the rep is not cut out for the job.
- Monitor manager behavior. Analyze data to determine who managers are letting go, and when. If data shows fewer bad reps are let go when sales teams are close to quota, managers may be holding on to these reps to gain a few sales rather than no sales. If a sales manager admits he would let a rep go if that rep’s quota was taken out of the group quota, consider giving the sales manager quota relief.
- Keep track of how much bad reps cost. Use data to determine exactly how much a rep costs, versus how much he brings in. When data shows the contributions of a rep do not justify the costs of keeping him, a manager is more likely to let a bad rep go.
Keep a close eye on sales reps in the bottom tier, and learn to gauge when it’s time to cut them loose. Don’t accept poor performance, period. And don’t allow your managers to do so either. For every sale that brings you to or just beyond quota, many more are wasted.
To learn more about why you should shift the focus away from poor performers, read “Team Maintenance: Creating Top Sales Reps from Middle Performers.”