Increasing productivity and achieving sales goals

Importantly, the out of pocket costs (before variable compensation) of a poor salesperson is as high or higher than a top performer. With today's sales tools, beating chance by a few percentage points is actually fairly strong performance. The better news: Applying "Total Quality" (TQM) principles to build a Total Quality Sales Management (TQSM) system can increase productivity by 20 or 30% or better.

The key to increasing productivity is not based on trying to find more superstars...but instead, to eliminate hiring and investing in poor performers. In fact, TQSM focuses on finding and reducing the failure points in every step in every step of the sales management process.

Typical tools limitations

What surprises most business people are the statistics on the effectiveness of the most common techniques we use to hire and deploy salespeople. As the table (reporting selection research first done at the University of Michigan) indicates, most business techniques used in selecting the right person are only slightly more accurate than chance. No wonder the 80/20 rule is so common. A better technique to screen out poor performers so that those selected or promoted are at least above average will return dramatic results.

For example, if your organisation has100 salespeople and R100 million in sales, and the 80/20 rule (or close) applies to you, then your top 20 salespeople bring in R80 million. But your bottom 20 is bringing in only R3 million. If you could guarantee replacing your bottom performers with only "average" salespeople (assuming that it may be unrealistic to find 20 more superstars) your increase in sales would be approximately R7 million! And average salesperson productivity would climb by 17% or more

Typical hiring methods*

*Taken from the research; "Validity and Utility of Alternative Predictors ofJob Performance," Psychological Bulletin, July 984