Sales Targets – Top 4 Reasons Companies Don’t Hit Them
Sales Targets continue to elude many companies, but more importantly the reasons why people do not hit sales targets has finally been uncovered. If you are not already aware, every year Jim Dickie and his colleagues at www.CSOinsights.com produce a fascinating report into the state of the sales industry. The research is based on a survey of over 1,200 companies worldwide, collecting information on over 100 sales effectiveness related metrics. The in depth report is 17 pages long and contains some great observations on the challenges that Chief Sales Officers continue to wrestle with, as they try to increase sales. I would encourage everyone to read the full report, however for those who would rather a brief synopsis please read on.
After reading the report my first thoughts, with respect to the participants, were how fundamental the nature of the problems were. Many of the reasons people are not hitting sales targets are basic Sales 1.0 rather than Sales 2.0, and because of this, I believe are more difficult to fix. There is a tendency amongst some sales professionals to discount the basics, as they have been in sales for ‘x’ number of years. (I have spent 16 years being a parent and I am still struggling with it.) Any number of years in sales does not mean you can sell, or mean you can consistently hit sales targets. Year on year statistics show a large percentage of sales people not hitting their sales targets. Sales people are a very talented group of people, but I continually see many “professionals” who make the most basic of errors, and the CSO Insights report confirms this.
- 4 out of 10 companies surveyed failed to fully understand the customers buying process. The report provides a long list of areas where sales people failed to ask and understand fundamentals such as Project Goals, Decision Makers and Decision Criteria. Furthermore only 1 out of 10 were proficient at understanding the customers buying process. In our sales training course Sales 101, we teach sales people that the value of all sales people is not the information they give out, but the information they gather. Two ears and one mouth = listen, ask questions and write it down.
- Only 1 in 3 companies surveyed felt they could properly differentiate their products and services. As the report quite rightly states, very few deals are uncontested, therefore the ability to differentiate is vital for those companies looking to optimize win ratios. Only 2 out of 10 thought they excelled at differentiating their products and services. Sales 101 tells us if the sales person cannot differentiate their product or service from the competition, then the customer will. Unfortunately the customer always then defaults to price as the differentiator. When two products appear the same, why pay more?
- 1 in 3 sales people fail to align their solution with the customer’s needs. Results show the reasons this group have failed to align their solution is two fold: 1) Lack of Domain Knowledge – this is the knowledge and experience of the customers world and 2) Lack of Engagement with all the stakeholders in the buying process. Again only 2 out of 10 were proficient at aligning solutions with their customer’s needs. Given the decline in Companies investing in their own Professional Sales Academies where are sales people going to learn Solution Selling?
- 4 out of 10 Sales people struggle to sell value versus price. Given all the information above it would be naive to think this would not be the case. The most startling revelation however comes from the statistic that just under 2 out of 3 sales Compensation/Commission plans did not motivate people not to discount. Only 1 in 10 companies rated their people as proficient at selling value versus price. This level of performance is actually better than I expected given all the errors that have been made, according to the report, before the sales person gets to this part of the sales process.
Sales Targets will continue to be missed if sales people fail to execute the basic skills of selling consistently. I am sure if you ask most sales people, they do know the basic selling skills required, but there is a huge difference between knowing something and doing something. There are obviously questions to be asked of the Sales Management involved, that has allowed these circumstances to develop, but for me the most important question is, now that we know this, what will we do to Hit Sales Targets next year? I would be interested to hear your answers below.
You can access a complimentary copy of the 2014 Sales Performance Optimization report when it is published in early February 2014 by completing the CSO Insights survey online. As an added thanks for your participation, you will also be able to immediately download CSO Insights sales process white paper “Anatomy of a World-Class Organization” upon completion of the survey.