{"id":1465,"date":"2014-09-15T18:00:27","date_gmt":"2014-09-15T18:00:27","guid":{"rendered":"https:\/\/www.peaksalesrecruiting.comblog\/problem-8020-rule-sales-managers\/"},"modified":"2017-12-27T19:41:48","modified_gmt":"2017-12-27T19:41:48","slug":"problem-8020-rule-sales-managers","status":"publish","type":"post","link":"https:\/\/www.peaksalesrecruiting.com\/blog\/problem-8020-rule-sales-managers\/","title":{"rendered":"The Problem with the 80\/20 Rule for Sales Managers"},"content":{"rendered":"

\"SalesMany sales managers accept the 80-20 rule \u2013 that 20% of their reps make 80% of the sales \u2013 which I suppose<\/em> is acceptable if the sales manager is consistently meeting targets, but it certainly is not a recipe for superior results. There are many downsides\u00a0to\u00a0allowing under-performers to exist on your sales team. Sales leaders who regularly exceed targets are vigilant about removing the weak performers from sales force.<\/p>\n

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\u201cTraditionally, sales teams fall into a pattern: Twenty percent hit well above target \u2013 they are your high performers; 60 hit their target fairly consistently \u2013 they are your workhorses; and another 20% underperform\u201d Colleen Francis \u2013 Nonstop Sales Boom<\/p>\n<\/blockquote>\n

Wasted time and effort<\/strong><\/p>\n

While it is customary for sales leaders to pay more attention to their best reps and neglect the weaker ones, the poor performers\u00a0require an inordinate amount of coaching and management time relative to their output. As a young sales manager for a B2B Internet solutions company I had two reps on my team that weren\u2019t hitting targets. As I was unused to aggressively pruning\u00a0my teams at this point in my career, I tended to work with each rep as they suffered through their troubles. I would spend considerable time coaching them through account strategies and in many cases, reworking their proposal to fix basic mistakes. It didn\u2019t take me long to realize that my time was better spent on finding more capable reps.<\/p>\n

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U.S. managers waste an average of 34 days per year dealing with under-performance. Senior executives claim they spend seven weeks a year \u2014 or over an hour per day \u2014 managing badly performing employees. \u00a0\u2013 Inc. Magazine<\/p>\n<\/blockquote>\n

Under-performers do more than hamper results<\/strong><\/p>\n

Anyone\u00a0who is missing their\u00a0goals, is not an overly happy person.\u00a0Reps are no different. In spite of the perception that reps are\u00a0overly optimistic and eternally happy folk, they are emotional and can become sullen when they are not succeeding. Just as positivity is infectious, so is a negative attitude. \u00a0Furthermore, when some people get in a rut,\u00a0they take it upon themselves to actively bring others down with them.<\/p>\n

In one of my previous\u00a0companies, an unhappy team member acted like\u00a0a contributing and \u201con-board\u201d member of our team\u00a0during\u00a0sales meetings, but outside the meetings she opposed the direction we were going in and was verbal about it to others, trying to solicit support for her\u00a0viewpoint and undermining our efforts to execute on our plan and create momentum.<\/p>\n

Lost Opportunity<\/strong><\/p>\n

Once after terminating a rep for lying to a prospect, I made calls to the accounts the rep was managing\u00a0and learned that while the customer\u00a0liked the benefits\u00a0they received by using\u00a0my company\u2019s products, they were reluctant to refer us to others since they really didn\u2019t like the rep that they were dealing with. This situation\u00a0was salvaged\u00a0by assigning a new rep to the account, but how many other opportunities\u00a0were lost because we were unaware of the dislike for our rep?\u00a0Research shows that customers are far more likely to share bad experiences with companies than good experiences. How much bad buzz did our unlikeable rep create?<\/p>\n

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66% of B2B customers stopped buying after a bad customer service interaction.\u00a0<\/span><\/p>\n

95% share bad experiences.\u00a0<\/span><\/p>\n

54% shared bad experiences with more than five people<\/span><\/p>\n

45% share bad customer service experiences and 30% share good customer service experiences via social media<\/span><\/p>\n

Survey: The impact of customer service on customer lifetime value \u2013 Dimensional Research \/ Zen Desk<\/p>\n<\/blockquote>\n

Morale\u00a0<\/strong><\/p>\n

Top sales achievers take a lot of pride in the companies that they choose to work for.\u00a0Poll your best sales producers and you will find that they are annoyed when\u00a0some people don\u2019t meet the performance goals that would justify their role on the team, but are allowed to remain as\u00a0a team member. Over time this frustration can boil over and cause a good rep to consider moving to a company with higher standards. As a sales recruiter, we see this all the time and make a living out of\u00a0meeting great sales people\u00a0who are open to considering a career change.<\/p>\n

Replace the weak with the strong\u00a0<\/strong><\/p>\n

Perhaps the biggest reason for rejecting the 80\/20 rule of sales rep output is that the gains of replacing low achieving reps are huge. Consider this \u2013 if you replace a rep performing at 70% of target with a rep at 120% of target, you get a\u00a050% boost\u00a0in sales output with less management effort. Win-win.<\/p>\n

There are a lot of reasons why sales managers fail to trim inferior sales talent for their teams\u00a0\u00a0\u2013 lack of awareness, sense that there isn\u2019t anyone available\u00a0to replace the rep, fear of change are some of the main reasons \u2013 however failing to make hard choices can be the difference between success and\u00a0a long downward spiral.<\/p>\n

To your success!<\/p>\n

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