'Each person holds so much power within themselves that needs to be let out,' said Pete Carroll, the Super Bowl-winning coach of the Seattle Seahawks. 'Sometimes they just need a little nudge, a little direction, a little support, a little coaching, and the greatest things can happen.'
Salespeople are no different: a little coaching can make a disproportionate difference to their performance. And while organizations can be reluctant to invest in training, the numbers are clear: training pays.
- CEB research from 2014 indicates that 'seller percentage to goal is, on average, 19% greater when they have highly effective coaches'
- International Coach Federation: 'The average company can expect a return of seven times the initial investment in coaching'
- Corporate Executive Board Company: 'Sales reps who receive just three hours of coaching a month exceed their goals by 7%, boosting revenue by 25% and increasing the average close rate by 70%'
Good coaching has a direct, measurable impact on KPIs. There are other benefits, too. As a 2015 survey by the Brandon Hall Group showed, improved performance management resulted in increased employee engagement and improved customer retention. The positive effects of improved coaching rippled out beyond the organization.
Improved rep engagement reduces employee turnover. Having a team full of satisfied salespeople doesn’t just make for improved sales figures: talent retention also makes a big contribution to the bottom line. As Shelly Cernel of KnowledgeTree notes:
'A recent Aberdeen Group study found that it takes seven months and almost $30,000 to recruit and onboard a new sales rep. Further, the cost of losing a rep can range from 1.5 to 2 times the employee’s annual salary.'
There are some reps for whom coaching has little impact: the laggards and the top performers. Makes sense: the further away from the center of the bell curve, the less effect. However, coaching is a great way of improving the two-thirds who fall in the middle of the spectrum.
'In research involving thousands of reps, we found that coaching—even world-class coaching—has a marginal impact on either the weakest or the strongest performers in the sales organization,' wrote Matthew Dixon and Brent Adamson in the Harvard Business Review. 'The real payoff from good coaching lies among the middle 60%--your core performers. For this group, the best-quality coaching can improve performance up to 19%.'
The evidence is overwhelming: Good coaching is the most important factor in improving sales performance. It is vital to the prosperity of a business.
So why are managers not doing it?
Busy Doing Nothing
'For everybody in their busy lives, you need to invest in sharpening your tools, and you need to invest in longevity,' says Ryan Holmes, founder and CEO of Hootsuite. Yet according to The TAS Group, 73% of sales managers spend less than 5% of their time coaching.
Image by Altify
These statistics are backed by anecdotal evidence from some of the world’s top salespeople. 'The reality I have observed while working with hundreds of organizations,' writes Scott Edinger in the Harvard Business Review, 'is that a true culture of coaching rarely exists.'
The reason sales managers don’t coach isn’t because they don’t see the point. Many of them know the statistics show the benefits of good coaching. So the question is: If coaching is so important, why are so few managers doing it?
The reality is that many sales managers would like to coach more, but they have their hands tied. Management requests that sales managers spend their time collecting data for sales forecasts, leaving little time to coach. It’s an outmoded practice that does little for business and yet is still insisted upon by many companies. The rationale is that the more numbers are scrutinized and the more accurate the forecasts, the better the results. We’re collecting data and analyzing it instead of using it.
'[S]ales managers and leaders…are working under a false assumption,' writes Edinger in Forbes. 'That is, that higher levels of inspection creates [sic] better results. Ironically, the opposite is true—just ask any sales professional or manager how much time they have spent rolling up forecast data what kind of difference it made in their ability to achieve an objective. I’ll save you the time; the answer is virtually none.'
Middle managers often form another roadblock, standing in the way of the data collection and distribution process. Christopher Mims in The Wall Street Journal talks of the 'data breadlines' that often form in the workplace, where all the data required is held in the hands of a few middle-management guys and rationed out carefully to stat-hungry staffers.
The result is that, even if sales managers want to spend their time coaching, the emphasis on forecasts—and the difficulties they face in accessing data to make them—is leaving them hamstrung. There simply aren’t enough hours in the day.
'Most sales managers are placed in a position where, in the eyes of senior leadership, reporting numbers is their top priority (even when the top priority should be improving numbers or moreover, improving capability to achieve numbers),' says Edinger.
Train In Vain
Of course, not all sales managers find their hands tied by forecast requests from upper management or middle managers that are miserly with their data. These sales managers dedicate a lot of time to training only to be baffled by the lack of improvement in their charges. The reason for this is simple: their coaching lacks structure and purpose and is often based purely on what they believe will work, rather than what has been proven to work.
'Some sales leaders will attest [that] their sales training adds real value,' writes Louis Efron in Forbes. 'But most claims are based on hunches or casual observations; rarely is perceived value based on measured facts and data.'
Other sales managers are deploying the right coaching methods with the wrong reps: as we’ve seen, even the best coaching won’t change the behavior of the reps at the ends of the spectrum. Yet despite statistics showing that focusing on the middle two-thirds works, many sales managers are reluctant to accept it.
'The data clearly suggest that organizations should do away with coaching democratically and instead shift the majority of their coaching focus away from low and star performers and towards the core,' write Dixon and Adamson. 'Despite the evidence…[s]ales leaders argue that coaching should be delivered in an egalitarian fashion and balk at the notion of targeting coaching by performance level.'
The Data Revolution
For sales managers, working with data is nothing new, whether they’re trying to prise it out of middle managers or study it to provide accurate forecasts for upper management. But there is growing evidence that we’ve been looking at data down the wrong end of the telescope.
Especially among startups, there’s a growing view that a smarter use of data can eliminate the need for data distribution, make middle management obsolete, and free up time for sales managers to coach their staff.
'Firms are keeping head counts low, and even eliminating management positions, by replacing them with something you wouldn’t immediately think of as a drop-in substitute for leaders and decision-makers: data,' writes Mims in The Wall Street Journal.
Gone is the logjam caused by salespeople standing in line to receive their rationed-out data from middle management. In its place is a streamlined, dynamic operation that allows previously exclusive performance data to be shared with the people who need it most: the salespeople and those who are training them.
Mims details the changes of the last few years:
'In the past…companies were beset by “data breadlines,” in which managers had all the data they needed, but their staffers had to get in line to get the information they needed to make decisions. In the world of just a few years ago, in which databases were massively expensive and ‘business intelligence’ software cost millions of dollars and could take months to install, it made sense to limit access to these services to managers.
Startups are nimbler than they ever have been, thanks to a fundamentally different management structure, one that pushes decision-making out to the periphery of the organization, to the people actually tasked with carrying out the daily business of the company. And what makes this relatively flat hierarchy possible is that frontline workers have essentially unlimited access to data that used to be difficult to obtain, or required more senior managers to interpret.'
How Good Sales Coaches Use Data
Image Source: How much is each employee doing? by InsightSquared
This wide-ranging access to data has two benefits for the sales manager. Firstly, it frees up time for much-needed coaching; and secondly, it allows the manager to scrutinize the data to work out what areas a salesperson should be working on. The ready access to data means that peer-to-peer coaching is also a lot easier, meaning that the management can focus more on specific problem cases in the knowledge that the rest of the workforce is still being coached.
Rather than using a one-size-fits-all policy, managers should use the data available to pinpoint specific problems in the salesforce. 'Don’t just make up a sales training method you think works,' writes Cara Hogan of InsightSquared. 'By using data to track successful behaviors and analyze individual sales reps, you can create an efficient and successful data-driven sales training method for your entire team.'
Image Source: How do my employees forecasts compare? by InsightSquared
Toma Kulbytė puts it more succinctly: 'Sales coaching is a meaningful analysis of data.' Here are four methods of data analysis that will help you become a better sales coach.
1. For Data Analysis To Be Meaningful, It Has To Be Timely
Sales-engagement analytics allows real-time assessment of reps’ behavior. Are they sending the right messages at the right time? How are they interacting with prospects? Are they following up correctly? A good sales coach will step in the moment they see something is going awry, so that it the rep can immediately be made aware of the problem and it can be fixed straightaway.
2. Encourage Reps To Analyze Themselves And Their Peers
Not only does this encourage engagement and ownership on the part of the reps, it frees up time for the sales coach to deal with the most pressing problems. Having reps track their own progress on a day-to-day basis will help them maintain focus.
3. Maintain Objectivity
As we discussed, many sales managers base their criticism of reps on a hunch. Analytics should mean this is a thing of the past, allowing you to maintain objectivity and find out exactly where a rep has been going wrong based purely on their behaviors. Keep your criticism behavior-based, looking at the number of emails and calls they have made instead of simply making generic points about overall sales levels.
4. Find Out What Separates The Best From The Rest
Thanks to data analytics, sales coaches do not have to work out why certain reps are top performers based on their personality traits. Look at the figures to find out what the best reps are doing differently and show those in the improvable middle two-thirds how it compares to their own efforts. It’s a great way of giving objective evidence that a rep is not doing the right things without opening you up to accusations of favoritism based on personalities. When the cold, hard facts are there in front of them and compare unfavorably with their own statistics, it is far more difficult for a rep to maintain that their approach works best.
Embrace The Change
Salesforce Research published a report in July 2015 that showed sales organizations plan to increase their use of sales analytics by 58% from 2015 to 2016.
Image Source: Huge Growth Expected in Analytics Use in 2015 State of the Sales Report by Salesforce
The report also found that high-performing sales teams are 2.6 times more likely than their underperforming counterparts to invest more than $1,000 per rep in annual training.
Image Source: Top teams invest in training in 2015 State of the Sales Report by Salesforce
The message is clear: The team that learns more, earns more. Make sure your company doesn’t get left behind.
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About the Author
A serial entrepreneur and digital nomad, Geoffrey has been running his own marketing consultancy for the past year.More Content by Geoffrey Walters