If your company is like most businesses, the people on your sales team have a wide variety of skill sets, attitudes, behaviours and performance levels. And you’ve probably looked at your top sales reps and asked yourself: why can’t all our reps perform at that level?
A company with a 10-person sales team would probably break out like this:
- It has two top-performing sales reps
- It has six average reps—some with potential, some without
- It has two underperformers—in other words, duds
If you were the sales manager, what would you do? If you were like most, you’d jump in and try to save the struggling reps. After all, it’s a natural impulse to want to rescue someone who’s drowning. So you’d dedicate huge amounts of your time to them—coaching, mentoring and going on sales call after sales call, waiting for signs of improvement.
Sadly, this effort is almost always in vain. Six months later, you’d very likely end up firing the rep—if he hadn’t already quit by then. Given the high cost of having to replace a sales rep, if you really want to make an improvement in your sales numbers, here’s what you need to do: fire your duds and work on your studs.
Let’s assume that your two duds each generate $200,000 a year in revenue, your average reps $300,000 each and your top performers $550,000 each. That adds up to total sales of $3.3 million, or an average of $330,000 per rep.
Yet, what matters most isn’t the average, but the wide variations in performance. Your bottom two reps, Jill and Larry, are together bringing in $400,000 of revenue, about 12% of the total. Most business owners and sales managers who looked at these numbers would say to themselves, “If only I can get Jill and Larry to bring in an extra $200,000 between the two of them, we’d be doing fine.”
But don’t kid yourself. If you do a simple percentage calculation, you’ll see why keeping your two duds around for another minute is such a losing proposition. Getting them to that “doing fine” level—which would still leave them a bit behind your average rep—would require them to increase their production by 50%. That’s enormous!
If they haven’t proven up to this point that they can raise their performance this dramatically, what makes you think they will now? If Jill and Larry have already been trained and coached like everyone else on your sales team, why would another round of these activities make much difference?
Here’s the problem: your weakest performers eat up the most time and energy of the sales manager or business owner. You need to take an unsentimental look at this. What ROI could you reasonably expect from spending any more time trying to get your duds up to snuff?
To appreciate how severe a problem your duds are, it helps to visualize the management of your salespeople as if they were racehorses. Imagine a racetrack in which two of your horses—your average performers—are running 50% ahead of your underperformers. Think of each lap as one month’s worth of selling. Over time, the gap between your average horses and your laggards will become so enormous it will become impossible to close.
There’s something else that’s critical to understand: this race never ends. The horses keep running and running, and the lead of the faster ones continues to compound.
This ever-increasing gap between your average horses and your duds—and the vastly bigger one between your first and your worst—is a measure of the opportunity cost of hanging onto your laggards. If you add up all the missed sales, wasted management time, money spent on salaries and damage to your brand, it will become painfully clear why you need to put your slow horses out to pasture.