Let me open by posing a scenario then asking a question.
Scenario: You have two sales people, each with $1 Million quotas. Each has done an outstanding job has sold $1.1 Million. One has done it by focusing exclusively selling one product line, the other has done it by selling the entire product line.
Question: Which sales person is the better performer?
Before you peek down in this blog post, what’s your answer?
I pose this question a lot. Most of the time, the first answer people give is, “There is no difference, each person did the same and over achieved their quotas. They are both great!”
Then people think, they usually get to the right answer. Yes, both sales people over-achieved their revenue goals and brought in sales of $1.1 million. But the high performer was the one that supported the company’s strategy by selling the entire product line. Too often, sales people and managers just focus on the number, thinking that achieving the number is the goal.
In reality executing the company’s strategy is the goal. Usually that goal is a set of financial goals–that become our quotas, a set of product line goals, and possibly some other things. Great sales performance is about executing the company’s strategies in the markets, with the customers. It’s not about just making your number, but it’s about doing all the other things consistent with the company’s strategies.
I meet sales people who think they are doing a great job, they are on target, but they’ve done it by focusing on their favorite product lines and ignored everything else. Or they can make their number with one or two customers, so they ignore all the other customers in their territory.
It’s critical, as sales people, that we align our sales strategies with the company’s strategies. It’s critical, as sales managers that we make sure our teams are balancing their performance–that they aren’t just focusing on one thing, or one part of the overall strategy, but they are executing on the whole strategy.
Let me illustrate this with an extreme example. A company has five major product lines. Success of all the product lines is critical to the company’s overall growth, competitive, and market penetration strategies. But the sales people get together in a bar one night, complain how difficult some of the products are to sell and agree to sell only one product line. At the end of the year, each has made their number, but they’ve sold only one product line. Yes, if each sales person made their number, probably the company made it’s revenue goal, but four of the product lines failed–nothing was sold. Inevitably, the company would have to shut down those products because of the lack of market success. Now they are a one product company, they are exposed to their competition, that has a much broader product line to sell. The competitive position is threatened……. You know the rest of the story.
In reality sales people wouldn’t collude and agree not to sell the single product line. But too often, sales people stay only within their comfort zone—and will tend to stay there as long as they can make their quota. They don’t try selling that new product. They don’t try going after that new customer. They don’t try anything different.
Sales performance and goals must be aligned with the company strategies. If it isn’t, then you’re not selling what you’re supposed to sell.
Great post David. I totally agree with everything you have said here. If sales performance/goals are not aligned with corporate strategy, less capable and less active salespeople will hide behind the easy sales while still hitting their numbers. This makes it difficult for sales managers to distinguish their good salespeople from their poor salespeople, which can lead to a plethora of problems further down the line (e.g. lack of incentives, low motivation, failure of new products…etc). Keep up the good work and hope you had a great thanksgiving!
Thanks Stave. The sales organization has to be aligned around executing the company strategies—this includes selling the entire product line across the entire target customer group. Too often we see sales people focusing on their favorite products and customers, making their numbers, but not really contributing to the company growth. Thanks for taking time to comment!