(Editor’s Note: This post should create some controversy. Good. Telling CEO’s and VPs of Sales that they are wrong is fun.)
The world of sales is ugly today. And businesses want to grow revenue. Problem is, what they are doing is counter-productive.
Less than 50% of salespeople make quota today, as per the article “9 Reasons Why 50% of Salespeople Don’t Make Quota” at the New Sales Economy Blog.
Jim Dickie of CSO Insights (The Sorry State of Sales Today) revealed that 86% of businesses raised quotas in 2010, despite the lowest quota achievement ever measured (59% for 2009 and much lower in 2010). Jim said “It’s like raising the high jump bar to 6′ 4″ when we could not clear 6′ 1″.
Salespeople are not achieving quotas. So how do we grow revenues? Raise quotas more? 86% – almost 9 out of 10 companies, chose to raise quotas.
They’re dead wrong. They want to generate more revenue. They should be lowering quotas. Lower quotas would generate more revenue.
Huh?
- Car Wash frequent visitor punch card – 10 with 2 free punches vs. 8 with zero free punches. 10 including 2 beat 8 hand down.
- Maids learning of calories burned in their jobs – being told of exercise results vs. being not told. Maids who were told of the benefits of exercise in their jobs lost a lot more weight doing the same jobs.
When testers told the subjects they were 20% of the way to their goal, results improved dramatically.
To quote the Heath Brothers “A business cliché commands us to ‘raise the bar.’ But that exactly the wrong instinct if you want to motivate a reluctant Elephant (emotions, feelings, etc.). You need to lower the bar. Picture taking a high-jump bar and lowering it so far that it can be stepped over. If you want a reluctant Elephant to get moving, you need to shrink the change.”
Another way to think of the Elephant is the idea of creating “fire in the belly.” When you get passionate people behind you, you’ve just motivated Elephants.
The authors point out that ideas like lowering the bar and celebrating early wins is counter-intuitive to most. After all, “How many sales managers dance a jig upon learning that their reps are 40% of quota? But this encouragement is critical, because it is self-reinforcing. When you’ve celebrated moving from 1 to 2, and then from 2 to 3, you gain confidence that you can make the next advance.”
Remember that Jim Dickie of CSO Insights used the high jump bar analogy too. In Jim’s analogy, the high jump bar was sales quotas. The conclusion:
Almost 9 out of 10 business executive are dead wrong to increase sales quotas. They’d sell more by lowering quotas.
What do you think? Are all these business leaders wrong? Do you agree with the Heath brothers or do you think this argument is moot?
