With millennials making up 75% of the workforce by 2025, it’s time for organizations to rethink how they are preparing them for success.
This blog post was originally published by Rekener, now a Brainshark company. Learn more about what that means in this Q&A.
Sales coaching has been shown to have a positive impact on win rates. But for coaching to be effective, companies need to develop data-driven sales coaches and a culture that reflects this focus.
For this to happen, sales managers (and especially new sales managers) need to develop data-driven sales coaching skills. This takes time, practice and technology. Data-driven sales coaching and a goal-directed playbook will get you there.
If you are considering an investment of time and money to improve data-driven sales coaching at your company, you'll need a business case. In this post, we'll help you build a business case based on increasing the effectiveness of your sales coaching.
You'll also need a playbook that your managers can follow in order to improve as data-driven coaches. Research shows that a goal-directed methodology will have a big impact on goal achievement. We'll outline a goal-directed playbook for improving data-driven sales coaching, and finish by showing you how to put it into practice.
The Business Case for Investing in Sales Coaching (Summary)
- 76% of sales leaders believe sales coaching is important.
- 76% of sales leaders also believe they don't do enough sales coaching.
- Only 46% of companies think their current sales coaching is effective.
- Companies with effective sales coaching achieve 15% better sales results than companies with ineffective sales coaching.
- Investments in effective sales coaching can yield an extra $75,000 per year for reps with a $500,000 annual quota.
The Playbook for More Effective Sales Coaching (Outline)
- Track goals and targets in dashboards instead of verbally. Improves objective achievement by 42%.
- Have reps commit to the goals publicly with sales manager. Improves objective achievement by 50%.
- Hold reps accountable using data in weekly one on ones. Improves objective achievement by 78%.
Read on for a more detailed look at the business case for sales coaching, and a playbook for making it happen.
The Sales Performance Business Case
Improving the effectiveness of sales coaching will have a direct impact on sales performance. The best and most recent research on this subject was done by the Sales Management Association in 2018. It's gated, but you can get the research report here.
The Sales Management Association surveyed sales leaders at 200 companies and found that 76% of firms believe that sales coaching is important, but that 76% believe they do too little of it. On top of that, only 46% of the companies said that their sales coaching was effective.
The survey results show that better sales coaching and more coaching time can improve the achievement of sales objectives. Companies with effective sales coaching achieve sales objectives 9% higher than other firms. That's a 15% performance gap compared to companies with ineffective sales coaching. And companies that invest greater than 9 hours per week in sales coaching produce 7.2% higher results, a 12.6% swing relative to companies that spend less than 2.5 hours per week on sales coaching.
A fifteen percent increase in sales objective achievement will have an enormous impact on the bottom line. Here are typical sales objectives for Account Executives (AEs) from Bessemer's State of the Cloud Report 2017:
- AE annual quota for inside sales: $400k-$800k
- AE annual quota for field/enterprise sales: $1-1.5m
- Quota attainment rate: 70-90%
These numbers help illustrate the value of a 15% increase in quota achievement. For example, a 15% increase in annual quota attainment for a $500k inside AE is worth $75k per year. For a field or enterprise AE, it is worth between $150k and $225k per year. Multiply those numbers by the total number of AEs on your team, and the value of better sales coaching will jump off the page.
The Goal-Directed Sales Coaching Playbook
The value of improved sales coaching is clear. The question is how to make it happen. Research shows that a goal-directed approach will have a significant impact on goal achievement. Here's a playbook for using the goal-directed method to improve data-driven sales coaching for your team.
The research was conducted in 2015 by Professor Gail Matthews of Dominican University. Matthews examined the factors which enhance achievement of business and work-related goals.
The goal-directed method has three parts:
- Writing down the goals.
- Committing to the goals, together.
- Accountability with regular meetings.
1. Writing Down the Goals
What the research says. Writing down goals improves objective achievement by 42% relative to not writing down goals.
How to apply the research to sales coaching. Sales managers should work with AEs to clearly identify objectives and then track those goals in writing. For AEs, quota achievement is an important target. But average quota achievement can vary from one company to another. In some companies, the best reps may achieve 80% of quota. In others, the best reps may achieve 120% of quota. This means that the best written goals are for achievement of goals relative to other AEs. For example, high performing AEs should work to remain in the top tier of reps. And lower performing AEs should aspire to move up relative to their peers.
2. Committing to the Goals, Together
What the research says. Public commitment to goals improves objective achievement by 50% relative to unwritten goals. In the research study, public commitment to goals was done by sharing the written goals publicly with a "friend."
How to apply the research to sales coaching. Sales managers need to work with sales reps to establish and commit to goals. Sales managers should use data to help the AE see where they are relative to their peers and then work with them to establish written goals. Committing to the goals in writing and with the sales manager is necessary to establish the "public commitment" that was so effective in the research study.
3. Accountability with Weekly 1-on-1s
What the research says. Those that were held accountable with weekly progress reports accomplished 78% more than those with unwritten goals.
How to apply the research to sales coaching. This result reinforces the importance of weekly one on ones between sales managers and AEs. Sales managers need to track data that shows performance relative to both (a) high level goals (e.g., to be a top 10% rep) as well as (b) the underlying metrics for activities and conversion ratios. Importantly, sales managers need to be able to see trends. This level of accountability helps AEs correct problems early and stay on track to achieve high level objectives.
How Sales Rep Scorecards Can Help
Here's how it works. With sales scorecards, sales managers can increase goal achievement using the three part playbook prescribed in the goal research study.
Data-driven sales coaching using sales scorecards gives sales managers what they need to improve sales performance. With the potential to increase quota achievement by seven to nine percent, data-driven sales coaching is a skill that sales managers must develop.
Writing Down Goals
The days of managing sales reps with yellow notepads are in the past. Now, it's all about using best in breed cloud-based technology to manage sales teams.
Sales Rep Scorecards gives sales managers a holistic view of their sales reps with data from multiple systems. Sales Rep Scorecards integrates data from the customer relationship management (CRM) system and any other system with sales rep data. In the last five years, there has been a proliferation of sales technology. Sales managers need data from their CRM, as well as their sales engagement tool (Outreach, SalesLoft), sales enablement platform (MindTickle, Brainshark) and conversational intelligence software (Gong, Chorus).
Sales Rep Scorecards rolls all the sales rep data from all these systems together and makes it available in an easy-to-use application for sales managers. With Sales Rep Scorecards, sales managers and sales reps have a comprehensive platform to set goals and track performance.
Committing to Goals
Sales reps with a growth mindset always want to get better. For example, a great goal for a sales rep is to be a "top performer" or to be in the "top 90% of quota achievers." The challenge for sales managers is to connect these goals with all the underlying activities and sales skills that are needed to achieve those goals.
Using Sales Rep Scorecards, sales managers can show sales reps how they compare to other sales reps who are already at the sales rep's goal. The data reveals what it really means to be "good" in terms of activities, pipeline conversion and deals.
Here is an example of how a new AE is performing relative to his team. If his goal is to be a top performer, he can see what he needs to do across multiple metrics. In this context, the sales rep can see how activity metrics like Calls and Emails Sent relate to the overall goal of being a top rep. In this example, John is at the cusp of the top level of performers in terms of Demos, Demo-to-Opp Conversion, Opportunities Created and Pipeline Created. With this kind of data-driven sales coaching, John will be motivated to increase his calling and email activity levels.
Accountability in Weekly 1-on-1s
The Dominican University research results confirmed the importance of accountability in weekly progress reports. In the sales context, setting goals in writing and tracking them in weekly one on ones will increase goal achievement.
Sales managers can put this to practice in weekly one on ones with Sales Rep Scorecards. Sales managers can see how key metrics are trending and use the data to help sales reps get better.
Let's take the example of John. With the comparison to his team, John and his sales manager can see what it takes to be a top sales rep. Then, in weekly one on ones, they can see how each of these metrics are trending. Here's an example screen shot that shows how John's key metrics are trending.
Sales Scorecards Can Help
Sales scorecards are the fastest and most powerful way to give your new sales managers everything they need to become great at data-driven sales coaching. Investing in better coaching and a goal-directed playbook will generate significant improvement in your sales results. The return on investment is big.