The Pareto Principle: Can Every Salesperson Be an A-Player? (Part II)
- Sales performance follows a predictable bell curve where only a few people produce half the results
- It’s time to rethink sales performance management – some A-players are just lucky C-players, while some C-players are unlucky A-players
- In this second post of a two-part series, we discuss some deeper insights into how the Pareto Principle and Price’s Law apply to B2B sales rep performance
In my previous post, I discussed the Pareto Principle and Price’s Law – and how these rules may (or may not) apply to your sales team.
For some deeper insights, I recently asked a friend who’s spent his career studying sales behavior. Jim Ninivaggi is a former service director for SiriusDecisions’ sales enablement service and the current chief readiness officer at Brainshark. Jim believes it’s time for sales organizations to apply fresh approaches to outdated thinking. Here are some of the insights I gathered from our discussion:
You Will Likely Never Have an Entire Force of A-Players
Think of a typical major-league baseball lineup of nine hitters. Most teams will have – maybe – two or three hitters with batting averages over .300, but the rest of the lineup is .200 to .299 hitters. The amount of coaching or breaking down what the .300 hitters do and trying to get the .200 hitters to do the same doesn’t matter: You will never turn a .200 hitter into a .300 hitter. Innate talent, dedication and other factors mean that only a few will succeed at that level. Their managers can’t make them do it.
The same holds true in sales. While you’d love to have an entire field force of A-players, you will always have some Bs and Cs. You can try to capture what your A-players do and get your Bs and Cs to mimic those behaviors – but the fact is, your A-players have innate talent and skills that cannot be transferred. It’s in their soul. For example, studies show that A-players more consistently conduct thorough pre-call planning. Logically, you might roll out pre-call planning training to try and get your Bs and Cs to become As. But the truth is, As were already doing pre-call planning, along with the other countless things that lead to top performance that make them As … and everyone else wasn’t.
Rather than try to everyone into an A, look to get the most out of each player’s ability, and maximize the entire team’s productivity. You may not turn a .250 hitter into a .300 hitter, but you could get him or her to .260. You may not get your B-players to be as productive as your As, but you could get 10 percent more productivity from each. When you are talking hundreds of Bs, that incremental improvement can be substantial.
When the Going Gets Tough…Even the A-Players Will Leave
Some organizations follow the age-old approach of simply firing the bottom 10 percent of performers and expect their A-players to fill the revenue gap. This is a recipe for increased voluntary turnover. Millennial sales reps in particular are likely to move – and move quickly – when they feels treated unfairly or unjustly. If we know we need that top tier to deliver half of our revenue, our enablement strategy should include a plan to ensure that the rest of the sales team is making up that revenue gap. I’m not suggesting you keep underperformers for the sake of hoping they’ll eventually come around, or because they’re there to support the As. Obviously, you need to let drastically underperforming reps go.
But instead of relying on the As to make up for the lost productivity, sales enablement needs to have a farm team (sorry for yet another baseball analogy!) ready to step in for a dismissed rep and start producing revenue immediately. This only happens with a strong recruiting/hiring/onboarding process that produces competent reps before they’re needed. If you know you’ll lose at least 5 percent of reps due to poor performance, you should have a pipeline of rookie reps ready to fill their shoes and relieve the revenue pressure on the As.
Dig Deeper Into Your Bell Curve
Although you cannot fight the bell curve, there are things you can do to flatten it. Perform an analysis of your As, Bs and Cs using two criteria: tenure in their current position and quota assignment. If you’re like most sales organizations, your A-team is made up of seasoned vets. It might sound obvious, but study after study has shown that A-players have the longest tenure in their current role. We all know sales superstars who can be placed in any territory and crush it, but it can take a rep two to three years in a role before reaching maximum productivity. For most companies, voluntary rep turnover is highest in months 12 to 36. Ensure you have an enablement strategy that looks beyond onboarding and has a focus on how to continually develop and support your sophomore and junior reps. Chances are, the more you keep, the flatter the curve.
In a related thought, review your quota assignment strategies. It’s common for a company to assign two sophomore reps the same annual quota, even though one started in January of the previous year and the other in July of this year. The January rep has a seven-month head start! This is a case of setting a rep up for failure by not assigning attainable quotas. Another example is a blanket over-assignment of quotas. Some companies over-assign quota by 20 to 30 percent. While your As (being overachievers) will hit their quota, your Bs and Cs will not – and they will get frustrated and leave. Again, the revenue gap is expected to be made up by the As, and we’ve demonstrated what that leads to!
Not everyone who composes music will be a Beethoven or a Mozart. Price’s Law has withstood the test of time across various fields and functions. Rather than fight it, sales, sales operations and sales enablement leaders need to embrace it. Focus on incremental productivity improvements of the Bs and Cs, and keep that small number of A-players happy and focused on producing their 50 percent.