Great sales leaders hire great people and help them learn and grow into even greater salespeople. We spend a lot of money on management, enablement, and training to do this, but it can be incredibly inefficient and unfocussed if we don’t leverage our data.

Each rep has their strengths and weaknesses. Smart ones will highlight their strengths and hide their weaknesses from managers. They’ll invite managers to join calls that are layups and hide the ones where they’re struggling. But when leadership is armed with the right data, they can still pinpoint exactly where reps need to improve most – and they can do it much faster.

In this newsletter I’ll lay out how some of the best sales organizations do this.

Identify Specific Areas for Improvement

Success in sales is a fairly simple formula: activity x effectiveness. More specifically, the amount of pipeline created x the close rate, alongside the sales cycle, which determines whether those deals close this quarter/year or next. Pipeline Velocity attempts to capture this in a single formula. More on that here.

Wouldn’t it be helpful to know where each and every rep is falling short and/or could improve the most?

Assuming we have accurate data (which most companies don’t when we start working with them) we can stack rank each rep by each of these metrics. This allows us to see not only who is performing and who isn’t, but what specifically each of them are doing to be a top or bottom performer in each metric.

If we have a rep generating a lot of truly qualified pipeline but not closing it, then we know where we can start to ask questions and where we can focus sales coaching.

Building a Plan (Together)

Buy-in is a critical part of sales coaching. Do we want to preach at reps on what they should do? Give them an activity quota to hit and hammer them on their metrics? Or do we want them to be bought into the plan that will get them to quota or President’s Club?

Alright, say we have a rep at 50% of quota right now. Do they want to be at quota? (Let’s hope!) Okay, one simple way to get there is to double the amount of pipeline generated by doubling the number of meetings and prospecting calls.

(Actually that may not be true. If 80% of their pipeline comes inbound, a 2X increase in prospecting will only increase pipeline by 20%, putting our rep at 60% of quota instead of 50%. This is why the numbers matter when doing GTM planning.)

Does the rep WANT to double their prospecting activity? Do they have twice as much time each day for prospecting and for sales meetings? Do THEY want to work 16 hours a day to achieve it?

If we ask, my guess is they’re going to say no. So, we need to look at a different plan. What would their Close Rate need to be? What about their Average Sales Price? What about their Sales Cycle? How do they compare to other reps and where do THEY want to focus on improving?

By forming a plan with them, they are bought into that plan and can see clearly what specifically they need to do to improve.

Optimizing the Metric(s) Over Time

Let’s say that our rep can get to quota if he can just increase his Close Rate from 15% to 30%, which is where many others on the team already are. What can his sales manager do to help him get there?

We start by looking at our sales process and all the reasons he’s losing deals. Is he talking to decision makers? How are his discovery skills? How are his demos and presentations? There’s a lot of nuance here but now that we have a specific metric or more, we can focus on how to optimize it together.

If we also have accurate data on stage conversion and stage duration, via clear entry/exit criteria, then we can drill in even deeper to see which stage he is struggling with the most and compare to what other reps are doing.

When I was an AE at Salesforce I had all this data at my fingertips in our team dashboard and, rather than go to my manager for help, I often went directly to the rep that was performing best to ask his or her advice. This is what took me from the bottom to the top of the team during my tenure.

When to Put Reps on a Performance Improvement Plan (PIP)

Now, let’s say we’ve done all of this and our rep still isn’t performing. It may be time to coach the rep out of the business. They lack the drive to put in the work and/or they lack the ability to learn the skills. The unfortunate reality in sales, as we all know, is that it’s not for everyone.

However, think about how many reps are put on plan BEFORE doing any of this. We’re telling a rep they need to hit quota or else. They need to hustle, to make more calls, to generate more pipeline and close more deals.

What does that do for them? If they’re already trying, it’s demoralizing. It’s unhelpful. At best they will hustle more to save their neck but never fix the underlying long-term challenges.

Most of the time they end up leaving the business and we now have to spend $500K to $1M to replace a rep that might have been great. (Yes, that’s what it costs to terminate a rep, recruit, onboard, and ramp a new rep, on average. Most of this is lost revenue production.)

If we want to build a more repeatable, predictable, scalable revenue engine, we need to hire the right people and coach them on the specific areas they need to improve to succeed. Hiring a bunch of reps and simply firing the ones that don’t make it is a very expensive way to grow, one we no longer have the funding to support.