Most salespeople aren't successful. It's not that they don't generate enough revenue to pull their own weight (most do), but in the eyes of their management the majority aren't making the cut. Only a handful of "stars" blow away their quotas and win an invitation to the company's sales club vacation year after year. Everyone else slaves away in the trenches unrecognized. Not exactly fair, right? Management draws an arbitrary line in the sand and your performance falls just the other side of it. But it might be more scientific than you think.
Your Boss Doesn't Think You Are Successful
More than likely, you're a victim of the Pareto Principle (not to be confused with the Peter Principle). You might have heard it referred to as "The 80/20 Rule." It's not exactly one of Newton's Laws of Physics, but it's applied almost as often. Simply put, the Pareto Principle states that:
Approximately 80% of outcomes are driven by 20% of causes.
Whether you know it or not, your management is probably using the Pareto Principle to analyze your sales performance alongside that of your peers. What they see is represented by the generalized chart below.
In testing parlance, this chart is divided into quintiles where each block represents one-fifth of the total variation in % Quota Attainment over a given period. Let's try an example to give this some real-world relevance:
If the lowest performing sales rep sold 35% of quota and the best rep produced 150%, then the chart's x-axis would range from 35% to 150% of % Quota Attainment from left-to-right.
The total variation in % Quota Attainment is 115% so each quintile block represents a 23% grouping.
The sales reps in the top 20% (Group A), are those that ended the period above 127% of % Quota Attainment.
Ranges of % Quota Attainment for the other groups: Group B 127% - 104%, Group C 104% - 81%, Group D 81% - 58%, Group E 58% - 35%
Two things stand out here:
- Graphically, we see that few people fall in the top quintile (or even the top two quintiles).
- Mathematically, we know it's possible for some people to exceed 100% quota attainment yet their performance still looks middle-of-the-road (as in Group C).
This is what sales management is looking at. By this standard, the majority of sales people don't seem to be performing very well. If you've never fallen victim to being "graded on a curve," then welcome to the game.
Make The Pareto Principle Work For You
The news isn't all bad. There is a key takeaway to be garnered from the 80/20 Rule: if 20% of your efforts generate 80% of your results, then give yourself permission to focus more of your attention on that 20% whether it's 20% of accounts, relationships, territories, solutions, etc.
Bill Moore of the Grayson Group is a big proponent of the 80/20 Rule. In his Selling in Deep Carpet seminar, Moore advises salespeople to focus on High Value Targets (HVTs). These are the 20% of opportunities where you can gain the most leverage; maybe you have well-established relationships, new opportunities for cross-selling, an underutilized customer reference, or some other asset that will pay dividends if you would only develop it further.
Don't be a casualty of the Pareto Principle. Use the 80/20 Rule to your advantage and you might just enjoy that sales club vacation next year.
Comments