Sales is a game of numbers: Quotas. Pipeline generation. Number of phone calls placed. Number of demos played. The list goes on. Accurate data collection is crucial for sales, but it shouldn’t stop there.
The ability to make data-based decisions is invaluable for the rest of the organization as well. In fact, it’s how Google runs its entire organization. In this era of big data, the new ABC(D) of sales is: Always Be Collecting Data.
Based on two fantastic Harvard Business Review articles by Eric Anderson and Duncan Simester and Thomas H. Davenport, here’s how to do it:
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Finding good salespeople is challenging. Annual surveys conducted by ManPowerGroup from 2006 to 2012 have consistently found sales to be one of the hardest jobs to fill. But what does that actually mean for your bottom line? Let’s take a look at the numbers.
The problem of turnover in sales is significant. According to the 2011-2012 Sales Effectiveness Survey conducted by DePaul University, turnover in sales has been increasing over the years and in 2011, the turnover rate for salespeople was 28%. Research by the Center for American Progress found that, on average, the cost to replace an employee was approximately 20% of his or her annual income. Continue reading
In the Harvard Business Review, sales experts convincingly argue that in this day of the empowered buyer, aggressive sales tactics are obsolete. Are they right?
These experts characterize the modern salesperson as a solution finder, a relationship builder, and a consultative partner.
In the sales research literature, these qualities correspond to a customer orientation, which is “the degree to which salespeople practice the marketing concept by trying to help their customers make purchase decisions that will satisfy customer needs” (Saxe & Weitz, 1982).
Customer-oriented selling involves relationship building with an emphasis on increasing long-term customer satisfaction rather than short-term sales volume. Continue reading
No one wants the stereotypical sleazy salesperson on their payroll. Understanding research on sales personality traits will help you identify strong salespeople pre-hire. Learn what to look for to save yourself time and your company money.
A common personality classification system referred to as the “Big Five” (Digman, 1990) demonstrates a large majority of human behaviors can be categorized into one of five factors: Conscientiousness, Extraversion, Emotional Stability, Openness to Experience, and Agreeableness.
Based on the results of a groundbreaking meta-analysis of 117 studies by Barrick and Mount, here’s what you need to know about the Big Five personality traits in sales performance:
1) Conscientiousness: Conscientious individuals are responsible, organized, achievement-driven, and hardworking. Continue reading
The average employed American spends more than 50% of their waking hours working. However, research reveals that only 30% of all employees, including salespeople, are engaged.
An employee is engaged when they are “involved in, enthusiastic about, and committed to their work and contribute to their organization in a positive manner.”
Just how much does being engaged and happy at work make a difference? According to the data: A lot. In fact, Zappos built their $2 billion dollar empire on a corporate culture of happiness.
The cost of unhappiness by the numbers:
1. Lost Sales Opportunities
Sales requires innovative thinking and creative problem-solving. Continue reading
The stereotype of the sales rep is a money hungry, selling machine (a.k.a. someone who is extrinsically motivated by monetary rewards). But does research prove this to be accurate? A look at the data:
Some of us have intrinsic motivation, defined as an interest in the task itself and a focus on learning and mastering task-related skills. Others have extrinsic motivation, defined as an interest in the goals, rewards, and evaluations external to the task itself and a focus on demonstrating your ability to others (Deci & Ryan, 1985).
The question is, which type of motivation leads to greater selling success? Continue reading
The emotionally intelligent person is someone who’s empathetic, assertive, self-motivated, adaptive, and optimistic (Petrides & Furnham, 2001). Sound familiar? This description reads like a laundry list of the requirements for a successful salesperson.
The concept of emotional intelligence was popularized in the 1990s by Daniel Goleman’s seminal book, “Emotional intelligence: Why it can matter more than IQ”. More recently, these teddy bear traits have been endorsed by sales leaders such as Jill Konrath as an advantage for sales performance. Today, sales professionals are racing to learn how to identify, hire for and develop emotional intelligence to edge out their rivals. Continue reading
A survey of 138 B2B customers across industries found the biggest mistakes salespeople make include: not listening to customers’ needs (18%), not following up (17%), and being pushy, aggressive, or disrespectful (12%).
Let’s identify how these complaints may have resulted from poor hiring practices.
#1 Not listening to their needs:
Salespeople who lack good listening skills also tend to lack empathy (i.e., the ability to see the situation from the buyer’s perspective), an important facet of emotional intelligence (Petrides & Furnham, 2001). Research has shown that sales reps higher in emotional intelligence have higher total sales revenue (Jennings & Palmer, 2007). Continue reading
You’ve heard it a million times – pre-hire psychometric assessments result in a more productive sales force. But salespeople are numbers people, and if you’re like me you’ve found yourself asking: How much more productive?
Let’s do the math and see how much money a valid psychometric assessment can actually make you in sales dollars.
The ROI of a psychometric assessment is called its utility (Schmidt & Hunter, 1998). Calculating utility is difficult because you need to know 5 key figures: the average validity of the assessment procedure (i.e., how well it predicts job performance), the selection ratio (i.e., the number of job applicants selected compared to the number assessed), the standard deviation of employee productivity (i.e., a measure of variation in performance), the average tenure of the employees who get hired and finally, the cost of the assessment procedure (Farrell & Hakstian, 2001). Continue reading
According to leading sales pundits like Dave Brock and CEB, the era of insight selling is here. Compared to traditional solutions selling where you present a solution (i.e., a combination of products and services) to the customer’s self-identified need, insight selling requires you to make the customer aware of a previously unknown need.
Insight selling is a direct result of the empowered buyer: as customers are able to conduct their own research into potential solutions themselves, the sales rep’s role as a solution educator is becoming increasingly obsolete.
Instead, salespeople are uniquely positioned to provide their customers with novel information on market trends and best practices due to their access and exposure to a broad range of organizations and industries. Continue reading
Last week’s Theory Thursday examined the surprising relationship between extraversion and sales. Today I investigate the interaction between intelligence and social skills in salespeople. Which brings in more revenue – IQ or EQ?
A common perception of a good salesperson places emphasis on personality over brains. However, as today’s increasingly complex market places both cognitive and emotional demands on salespeople, there may be more to the story. In fact, experts like Lynette Ryals and Javier Marcos argue in the Harvard Business Review that today’s sales reps need both relational skills and cognitive skills to succeed.
So what does the data tell us? Continue reading
What makes someone a good salesperson? Decades of research on sales performance suggests someone who is intelligent, adaptive, conscientious, and extraverted is successful in sales (Churchill, Ford, Hartley, & Walker, 1985; Verbeke, Dietz, & Verwaal, 2011; Vinchur, Schippmann, Switzer, & Roth, 1998).
So all you need to do is hire the people who score the highest on these characteristics, right? Not so fast. Recent research suggests it’s not that simple.
In 2013, Professor Adam M. Grant of the University of Pennsylvania surprised the sales world with a study that showed a curvilinear relationship between extraversion and sales performance. Continue reading
Data is a beautiful thing. As the original Moneyball phenomenon of baseball scouting demonstrated, data can invalidate gut-based beliefs and lead to unexpected insights with big payoffs. And while statistical analysis has long been the foundation of various occupations and industries, the rest of the corporate world is rapidly catching up.
Experts have coined this recent development “the industrial revolution of data.” With the advent of big data and readily available measurement tools, companies are racing to adopt a strategy of data-driven decision making. As compellingly argued by Josh Bersin of Bersin by Deloitte, one area where using data can create a huge competitive advantage is in an organization’s hiring practices. Continue reading
A common criticism of sales hiring managers is that they act on gut instincts. Why is this such a bad thing? In short, they turn hiring into a crapshoot with a 50% failure rate.
The main problem with trusting your instincts is that they are often based on various cognitive biases learned through our experience. Cognitive biases are mental shortcuts that cause people to interpret information in a way that creates their own “subjective social reality,” which leads to inaccurate judgments and illogical behavior.
Inspired by this extensive list, here are the top 5 biases of hiring managers:
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