It’s a hot steamy summer night in Virginia. I’m at an outdoor town fair, where the smells of cotton candy and popcorn blend with laughter, music and droning gas-powered generators, enveloping everything. I’m ten years old, and I want the giant blue stuffed hippopotamus sitting on the brightly-lit top shelf, behind the counter.
“How do you win the hippo?” I ask. “Stand up this Coke bottle,” the man tells me, pointing to a glass bottle lying on its side. “Take this fishing pole with the wooden ring at the end of the line. Get the ring around the neck, and pick the bottle straight up! One ticket gets you three tries.” He demonstrates by maneuvering the ring onto the bottle, lifting it an inch or so. I decide I’m in, and extract a single ticket from my pocket. Separating it from a small wad of drier lint, I present my ticket to the man.
Within a few seconds, I have the ring in place. I begin to raise the bottle. Ten degrees. Twenty. Intense concentration, beads of sweat. Now thirty degrees. As I elevate the bottle, the ring slides perilously up the neck. I keep trying by lowering the bottle, re-aligning the ring, then raising it again. I’m still on my first try—as long as the ring doesn’t slip off. “Must . . . use . . . quick . . . action . . ,” I think. I hold my breath, visualize the result, and with a quick wrist flick, up goes the bottle. Predictably, the ring flies off, causing a frenzied chain reaction that sends the ring spinning out of control at the end of the dangling line.
For a few harrowing seconds, the bottle totters in an awkward parabola, before settling, solidly and triumphantly, upright. Only one witness appears more shocked than me—the man running the game. “Wow! I’ve never seen that before! You’re supposed to get close, but nobody’s ever succeeded until now.”
Sorry to blow the odds, but I’ll take my hippo.
The game’s design compares to selling, where the odds of success are often unattractive and opaque. According to the 2013 Sales Performance Optimization Study, about 62% of salespeople at surveyed companies achieved quota in 2012. That’s better than in previous years, when the ratio sank into the 50th percentile. But sales achievement—or lack of it—remains a painful, festering boil for most companies. According to Jim Dickie, Managing Partner of CSO Insights, companies base their revenue planning assuming that on average, 71% of reps will make goal. We’re still well off the mark, and I don’t see anyone doing an end zone dance.
Seventy-one percent of reps expected to make goal means that companies are betting that twenty-nine percent won’t. I’m trying to think of another position in which employers have lower expectations for success. Cashier? Summer intern, maybe? Hard to fathom, but there’s a pattern: executives are not bullish on the idea that salespeople are likely to win at doing their job. In a sales risk survey I conducted with CustomerThink, nearly 25 percent of respondents agreed with the statement, “Our salespeople lack the basic skills required to compete in our markets.”
So, twenty-nine percent might fail, and twenty-five percent of companies have salespeople who aren’t competent to perform the job for which they were hired. We can hold a friendly debate about whether these statistics represent correlation, causation, or whatever. But few can deny these findings present a troubling picture. Luckily, we’ve coined a nifty term, Sales Force Optimization, or SFO, to address these issues—or not, as the case might be.
SFO generates a lot of online chatter—710,000 search results just now, in fact. Yet, for the loads of sales-productivity-certainty hype, a 71%-will-achieve-quota benchmark seems lame. After all the optimization dust settles, what does that estimate suggest? Either (1) we still have much to learn, or (2) selling effectively baffles us more than we’d like to admit. Probably, it’s both.
With the quota-attainment success needle now edging into more favorable territory, you’d think that salespeople would be job hopping like crazy. But they’re not. CSO Insights found that in 2012, about 10% of sales force attrition was voluntary, while 10.6% was not. What’s unknown is how much was in between. “The heck with this Performance Improvement Plan! I quit!” OK, I’ll tick the sort of voluntary box for that one. Either way, at just under 21%, sales force churn is now at an all-time low, according to Dickie.
Maybe salespeople are sticking around because economic conditions are uncertain. Maybe they’re more loyal to their employers. Scratch that! Maybe it’s because sales compensation is trending up slightly. A good sign, but consider the fine print. CSO Insights found that thevariable compensation component is increasing also. Translation: salespeople are shouldering an increasing proportion of revenue risks, and for now, some appear to be winning. Yet, a study that Accenture conducted found that “for two years running, sales representatives receiving between one and fifteen percent variable compensation yielded the highest percentages of quota, whereas those receiving between forty-one and sixty percent delivered the lowest performance and the highest attrition rate.” Some trends defy explanation.
But there is a more ominous problem facing the sales profession, which surfaced in none other than Forbes, The Capitalist Tool: “These days salesmen are regarded as shmucks,” says Elli Sharef, co-founder of HireArt a recruiting firm serving the country’s rising tech community, adding, “I’ve noticed that people in the Millennial generation just don’t think sales is a cool job.” No need to worry about any of this unless you, or someone you love, needs a sales force in the next three to five years.
Before I forget, I should also mention the career path at Your Father’s Sales Organization. It won’t take long. Here it is: make your number, keep your job. Repeat every year—if you can. Oh, yay! In computer programming, that’s called a do-loop. If Millenials aren’t lining up to land a job in sales, can anyone blame them? Mama’s, don’t let your babies grow up to be salespeople!
In a sales leadership session I attended, the facilitator asked how many had a parent who encouraged them to go into sales. Out of 150 people in the room, about three hands went up. The year was 1993. I suspect there would be even fewer hands today, because college students have attractive choices. The Wall Street Journal recently reported that “Mirroring trends in the broader economy showing that engineering and computer skills are highly sought, eight of the ten highest-earning [undergraduate] majors come from these departments.” (Good News for New Grads: Salaries Rise, January 24, 2013) A 21-year-old with a computer engineering degree now earns an average annual salary of $70,400 the day after graduation. Want to make serious coin? Buy a programmable calculator, a pocket liner, and take multi-variable calculus in high school.
Yet, despite unfavorable odds, long hours of arduous work, loneliness of the road, and bad hotel food, being in sales holds powerful appeal for many. Now if you’ll excuse me, sir or madam, it’s been mighty nice to meet your acquaintance. Much obliged. There’s a blue hippo out there, and I’m going to win it.