This time of year, sometimes we look back to see what’s happened how things have changed and the progress we’ve made. Typically, we look at attainment of annual goals. Questions like, “Will we hit our numbers? Could we have done more or what cause us to miss? Have we built a stronger team, are we growing their ability to perform? What challenges did we face, how did we address them? Are we maximizing performance and productivity in the organization?
These help us understand what has happened and how we responded. It also helps us think about what we want to achieve in the coming year.
A few colleagues and I sat down, looking at research data of overall sales performance for a number of years. Some of the data went back as far as 2015. There were some interesting, though sadly, not startling trends.
In general, organizational performance against their goals was good. We saw 85-90% of organizations achieving their overall revenue goals. We didn’t have data on YoY revenue growth, but anecdotally since 2015, we’ve seen good growth, particularly in the technology sectors. Some sectors were very positively impacted by the pandemic. Some sectors could have achieved more growth, but had supply chain constraints.
In the past 18-20 months we’ve seen organizations facing increasing challenges in achieving overall revenue goals–none of this is surprising in light of the news we read on the global economy, inflation, and recession. At the same time, news is a little mixed, with many sectors experiencing good growth.
While overall organizational performance seems to be more positive, we saw other disturbing trends.
We looked at reports from prior to 2015, we saw reports like 60%+ of salespeople meeting quota. We saw average tenures in sales roles of 36-42 months.
Today, we see reports of 42-45% of sellers meeting quota. Reports of average tenure are down to 11-15 months. Attracting and retaining talent has become a critical problem, with comp skyrocketing to compete for this talent (which will hang around for shorter and shorter periods).
We’ve seen huge increases in tech stacks and spending on sales/marketing technologies. In the 2015 time frame I recall writing about “huge tech stacks” of around 7-9 tools. Today, it’s not unusual to see tech stacks exceeding 19 tools. Spending on technology has skyrocketed.
At the same time, the same old issues keep coming up. Something as fundamental as CRM compliance shows very low numbers, with little to no improvement in the past 10 years or so. Anecdotally, as I dive into client CRM systems, I find very poor utilization. And the number of Excel spreadsheets that managers use to monitor performance doesn’t seem to have declined.
We see many other issues of decline. “Acceptable” win rates are now less than 20%—“we’ll make it up in volume….” Average deal values declining. Increasing demands for volume/velocity in activity levels, but simultaneously time available for selling is decreasing–sometimes less than 20%.
Things are changing on the customer side, as well. No Decision Made has gone from the mid 40s to over 60%. Buying cycles have gotten longer. Customer preference on “rep-free” buying experiences have gone from the low 40s to over 60%–with some research showing 72% preferring rep-free experiences. And we see data on increasing customer disappointment in the buying decisions they have made.
We’ve seen customer retention and loyalty becoming increasingly challenging.
So we have some mixed messages/experiences. Overall, we see organizations meeting and exceeding revenue and growth goals. But we see sharp declines in productivity, performance, effectiveness, and efficiency.
And this is progress?
But there is a bright side. If we are seeing revenue and overall organizational performance improving, despite plummeting selling performance. One could conclude, organizationally we are underperforming our potential. If we are still meeting our revenue/growth goals in the face of declining selling effectiveness and efficiency, imagine what we could do if we started improving effectiveness and efficiency?!?
Or, in the least, if we didn’t dramatically increase overall revenue/growth, we could improve EBITDA.
As we look at the potential of a recession, or at least some slowing. It’s critical that we do everything we can to maximize the performance of each individual in our selling organizations. We know what do do and how to do it–we just don’t.
Perhaps it’s time to change…..