The 13%, 15% and 26% Difference
Just yesterday I found an article in the Integrity Solutions® toolbox that was written by Bill Kowalski, their Sr. VP. In it, Bill reveals a very recent market research survey of over one thousand sales executives from a diverse range of companies in both size and industries in North America, Europe and the Pacific Rim. It’s fascinating because the findings parallel my own unscientific survey of managers and small business owners in sales organizations within my own network. It seems that in today’s global economy, there is commonality in the priorities of sales executives regardless of geographic location: The # 1 priority is increasing sales, followed by increasing sales effectiveness, increasing market share, increasing customer loyalty and reducing sales cycle time.
Two primary strategies. The 1,040 firms in Bill’s study do two things to increase sales and sales effectiveness. They do sales training and implement a sales process. Not surprising so far, right? Here’s what blew me away though. Based on the data gathered, the organizations were placed into one of four categories. Here are the definitions of how they were categorized:
- Level I firms do not have a formal sales training program or process – sales reps are left to their own devices about how best to sell.
- Level II firms conduct sales training and have a formal sales process but only encourage reps to use the knowledge and principles introduced.
- Level III firms conduct sales training, have a formal sales process and expect reps to apply the knowledge and principles introduced and follow their sales process.
- Level IV firms conduct sales training and have a formal sales methodology and process. Sales reps are held accountable to practice and apply knowledge and principles learned and managers are also held accountable to provide coaching and feedback.
The following illustrates the percent of sales quota achieved of firms in each category:
Type of Firm and % Quota Achieved
Level I (60%)
Level II (54%)
Level III (59%)
Level IV (68%)
Incredible! Level I firms who provide no formal sales training or process achieved performance to quota that was 11% better than Level II firms who provide both sales training and process but only encourage people to apply what they have learned. Level III firms who also provide both sales training and a process and expect people to apply what is learned performed essentially the same as Level I firms who employ neither sales training or a formal sales process.
How can this be? It’s pretty simple, really, and it bears out all my years of “unscientific” observations of real estate organizations and sales people everywhere: Sales training and sales process either has no material impact on improving sales effectiveness, or they can actually hinder performance absent true accountability to insure knowledge learned is practiced and applied and there is steadfast adherence to a formal sales process. Why is there such a high fall-out rate for new real estate agents, even in companies where there is a great new agent training program?
In other words, without a formal process to hold people accountable to immediately apply and reinforce training material, retention falls at an accelerating rate. Consequently, there is little to no behavior change or performance improvement.
This is further backed by research conducted by G.V. Goodard and John R. Anderson. It’s known as the “Forgetting Curve” which illustrates that without reinforcement and application within 48 hours of a learning event 75% of the information covered is forgotten. I believe (as does Bill Kowalski) that if the sales training is “event based” it may even hinder performance due to creating cognitive dissonance. It’s a fancy term that simply means if an individual is introduced to knowledge or concepts they do not believe they are capable of applying, anxiety results that hinders performance. Think about it. How many times have you attended a seminar, workshop or course and thought, “that’s great, it sounds exciting, but I don’t really see myself doing it.”
Now, take one more look at Level IV firms’ performance to quota. It was 13%, 26% and 15% better than Level I, II and III firms, respectively. This clearly supports the notion that converting knowledge into performance requires accountability and the experience of practicing and applying what is learned. It also validates the importance of sales managers being held accountable for effectively coaching staff as this leadership activity is a strategically critical link in the performance improvement process.
Imagine. If you are a Level I, II or III real estate firm, what an increase of 13%, 15% or 26% in sales would mean to your organization if you became a Level IV firm?
Bottom line. To improve business growth in 2009 and beyond, coach your people. It will make all the difference.
Guest Blogger: Susan Ireland
email: Susan@SusanIrelandAssociates.com
website: SusanIrelandAssociates.com
703.591.6158
