The ‘how’ of selling: Why coaching should be your sales priorityby
According to this year’s CSO Insights Sales Management Optimization Study, you are statistically more likely to win a pass bet at a craps table in Las Vegas than you are to close a sales deal.
In the broadest sense, selling is tough, and getting tougher. More and more markets are becoming homogeneous; businesses are facing more competition and customers are becoming more demanding. The average win rate of forecast deals is at 45.9%, which is 0.2% higher than 2013 but still far lower than, say, 15 years ago.
Speaking to CSO Insights’ managing partner, Barry Trailer, he mentions the technology sector as an example of the problems that have surfaced in recent years for sales reps and managers alike:
“A distinguished sales leader recently said to me, “Back in the day, during the tech bubble we thought 40-50% growth quarter-on-quarter was a God-given right. Now it’s a God damn miracle.”
The methods in which sales teams go about acquiring and retaining new business are clearly now the key to success. In the CSO Insights study, it mentions the ‘how’ of selling as being the most important factor sales leaders need to consider, but what does this really represent?
“How you sell is a more important, sustainable and competitive differentiator than what you sell,” Trailer explains. “The days of having unique and sustainable product differentiation are essentially over. The ‘do more with less’ imperative that became so apparent to sales reps during the 2008 recession hasn’t really gone away, our statistics are showing that. So, sales reps are looking for help through their organisation now. Where that comes from, whether it be through CRM implementation, process implementation, training or revised compensation; well, something has got to improve.”
Consistently and coherently coaching
Trailer is right about the numbers. Adding to the issues of closing deals among the 1,200 global companies’ sales representatives CSO Insights surveyed, the study found that there were 24.2% of businesses reporting win rates below 25%, and that within businesses that set target win rates below this figure, only 39.8% of sales reps were hitting them. Statistically speaking, that’s a large number of people failing to make many sales.
Central to improving some of these perceived failures and indeed, the idea of ‘how you sell’, is sales coaching. Trailer believes that the trends reoccurring in the CSO Insights study year after year commonly point to a need for better coaching from sales managers; that the days of Gordon Gekko-style management are long-since evaporated and that a better understanding of training and philosophising sales reps is much more likely to foster better customer relationships, and better win rates as a result:
“In our view the key to improvement is the sales managers. Consistently, coherently coaching people. Everybody is looking for the right lever to pull, but what’s really missing is the fulcrum. We see sales managers as being the fulcrum in most businesses now. Our research shows that 50% of firms currently leave coaching entirely to their sales managers, so those individuals’ philosophies and how they want their reps to sell is vital.”
Despite a widespread recognition of the ‘how’, many organisations not only leave coaching entirely to sales managers, but do so within an informal process. So, that’s 28.5% of businesses leaving the training process of the people selling their goods entirely to the discretion of individual managers and their opinion of what’s best. And part of the issue here, Trailer argues, is that many sales managers currently placed in charge of coaching reps gained their own experience and philosophies in the wrong era:
“Things turned around so quickly during the tech bubble, but a lot of the folks that were reps during that time are now the sales managers, and they’re victims of their own experiences. It’s clearly a much tougher environment for sales reps now and they need to be given the right tools to differentiate.”
The 'how' of selling
CSO Insight’s study confirms that informal coaching processes are less likely to produce sales reps that exceed their target quotas, with a 49.2% correlation far outweighed by formal sales coaching, which shows a 62.3% correlation. The problem is, only a small percentage of businesses have this type of coaching in place:
“Only 20% of firms have a genuinely formal process for sales coaching, based on our research,” Trailer adds. “When we look at what sales managers are measured and compensated on, the number one and two things we see in most businesses are overall revenue retainment and individual rep quota retainment. Encouraging a positive sales environment is way, way down the priority list, which doesn’t seem to make too much sense to us, given that the ‘how’ of selling is becoming so much more important.
“Coaching needs to be recognised more, and needs to be a supportive development. It doesn’t have to be a manual process but it has to be recognised that it is a process, and that there are technological tools to assist managers – analytics are a good example.”
CRM systems are another such tool, and it’s issues such as coaching programmes that, in so many sales departments, form part of the reason the CRM software market is booming in 2014. Joining up departments and processes with CRM software is currently en vogue, as customer journeys become a focal point for many organisations. And within this wider view, sales teams are expected to work closely with the marketing department to ensure customer experience is adhered to:
“CRM is shifting from being a process for storing information to collaborating, based on information,” Trailer explains. “Coaching fits into this process, as does cross-department communication. Today, the marketing side of communication in pre-sales is all the more pivotal than it used to be because of the idea of experience. But then, in turn, knowing about the customer, knowing about their markets; that all comes from this pre-sale communication and again, is something that is useless unless it’s correctly passed on to the sales reps in the sales process.
“Customer experience is so important now. 57% of the buying cycle is completed before a customer talks to a sales rep, so clearly the idea of teeing customers up is now an experience. Social media is important too; as are introductions via networks. Participating in groups and placing yourself as an expert in your product’s networks is more important. Traditional lead generation is gone when you look at what you need to do in advance of even getting into talks about selling. But again, unless there’s someone coaching this teeing-up process into sales reps, all of this can easily fall down.”
Clearly, many sales departments need to change. The good news, however, is that the CSO Insights’ research shows a couple of trends that suggest many businesses are doing this; thinking about their ‘how to sell’ and putting in place processes that allow for better customer experience. For one, voluntary and involuntary sales rep turnover rates have dropped significantly from 2013 to 2014, from 15.2% voluntary and 13.3% involuntary respectively in 2013, to 11.6% voluntary and 10.8% involuntary in 2014. Add to this that 47.2% of sales organisations are allowing ten or months for new salespeople to become fully productive compared with 35.2% from the 2013 Sales Management Optimization study and it is evident that sales departments are starting to appreciate the idea of nurturing their reps.
“You can’t do what you’ve always done and be successful,” Trailer adds. “In contrast, there are no easy and simple answers to improving sales processes. Some people think technology is the answer, but training new processes with an understand of customer journeys and experience is just as vital in building the ‘how’ of selling into your overall culture. This is what will make your processes less of a gamble in the long-run.”
Chris was an Editor at MyCustomer from 2014 to 2022. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News.