One of the greatest business myths is salespeople create demand. I will often hear business owners say, “We just need a few good hunters to grow our business.”
This is a belief that wastes time and burns through good people.
Here’s the reality: salespeople are capacity. They don’t create demand for your products or services, they serve it.
The 3T’s of Sales Performance
Sales performance is predicated on three variables:
- Territory: Demand for your products and services
- Timing: Market conditions such as low unemployment or recessions
- Talent: Your salespeople
Territory is the #1 indicator of sales performance followed by Timing and Talent.
For example, a weak salesperson working in a high potential territory will outperform a rockstar working in a dry territory. It doesn’t matter how good the sales rep, if there’s no business to chase they’ll fail.
Prematurely Splitting Territories
The myth that salespeople drive growth leads to a performance killing mistake: prematurely splitting territories.
Leaders can come to a weird logic when looking at sales performance. They assume, “If my sales reps each carry a $1 million quota than hiring 10 more salespeople will generate $10 million.”
Nope. Ain’t gonna happen.
The reality is far harsher. Hiring more salespeople without increasing territory potential means fracturing the territory. For example, doubling the number of sales reps often leads to halving sales productivity. This leads to a nasty chain reaction:
- Salespeople earn less commissions and income;
- which leads to increased employee turnover;
- which creates increased costs;
- and if left unchecked, leads to declining sales.
Great Salespeople Are Facilitators
I hear it again and again, “My sales reps are order takers.”
That may be true, but maybe that’s what your customers actually need. Complex products and services don’t sell themselves. They require human intervention to facilitate the purchase cycle.
Great salespeople are facilitators. They help their customers navigate the buyer’s journey and make smart decisions. And this type of selling can be a competitive advantage. If your competitors are product pushers, sales facilitators will make your business stand out as more professional and solution oriented.
Growth Is Multifaceted
As a business owner I hate hearing, “It depends.” I want solutions that deliver clear and tangible outcomes, but growth is multifaceted. There are multiple levers that will drive growth for your business, but it’s not always clear cut. What works for one firm may not be applicable to your business.
How do you increase growth? Work the problem.
- Study your market.
- Study your customers.
- Study your business.
- What levers are at your disposal to create growth?
Chances are you will find the solution cuts across your entire organization — from sales to finance to operations. Each division is going to have to work in concert to create category defining products and services that your customers want; then work to market and sell the heck out of them; all while building your organizational capacity to serve more and more customers without losing an ounce of quality.
Driving sales is no longer a salesperson’s problem. It’s an organizational challenge to grow and serve your customers better.
What do you think?