By Alex Bartholomaus
The prospect of growing revenue without adding salespeople or spending more on marketing seems like an impossible proposition. But it is made possible if the company’s leadership is prepared to ask for a higher return on its resources, including all of its employees.
We’ve all heard about the 80/20 rule. In case you haven’t, it’s this: 20 percent of your sales force accounts for 80 percent of your revenue. While this is generally an exaggeration, it does suggest small groups of higher performers surrounded by larger groups of mediocre ones.
For a variety of reasons, companies continue to enable under-performance for reasons ranging from nepotism and close friendship to misguided benevolence. The first hard decision is to shine a light on under-performance. Generally two years’ worth of sales numbers is enough to make some decisions in terms of who has to go. If this data isn’t enough, there are various performance assessments that can evaluate behaviors and values to sales-specific assessments that evaluate the entire sales force. This information is the tipping point to at least reduce the under-performing performers and free up valuable resources, because these people often have a base-pay component.
These savings can help finance a combination of sales training and development for the existing team and new additions to the team. In some cases, a smaller team of higher performers can produce more than a larger team of mediocre performers. The key is to balance your spend on people with continued development. With the help of your CFO, you can model this out in order to avoid spending more on sales people and/or marketing.
Another tactic to help grow revenue is to look how each member of the sales team has been doing in terms of account management. Your CFO and Sales Manager can analyze under-performing accounts to see which ones should be performing better. Once identified, the company can re-assign the account to a different salesperson to give someone else a try to develop more revenue with the account.
In both of the tactics mentioned above, a leader needs to be prepared to challenge the status quo. It is not easy to make difficult decisions around letting people go and/or taking under-performing accounts away from salespeople. A leader has to recognize that when resources are finite, sacrifices need to be made.
Alex P. Bartholomaus is managing partner at People Stretch Solutions and works to help small to mid-sized companies drive growth and profits. He combines a non-traditional approach of psychology, behavioral science and emotional intelligence to help sales forces and leadership teams perform at higher levels.
Originally published: Jan 16, 2012