TLDR: There is systemic failure across B2B sales organizations to hit growth targets. Some blame “the Millennials” for being unable to sell, “the market” for taking a turn, or that the targets are “too big”. Seeing it first hand I notice that the market continues to grow with more and more customers in need of a solution but that many sales organizations are failing to differentiate over the growing amount of competitors —it is this fragmentation that results in the lack of growth.
This creates an opportunity for companies to differentiate over competitors by looking at their sales team as a competitive differentiator and training & enabling them with an in depth understanding of the market and its use-cases, detailed knowledge on the solution they offer, and excellence in modern customer centric “sales” skills.
The Problem Explained
We notice a large number of sales organizations are falling below 80% of goal. So much so that the superstars on the team are no longer able to cover the spread of the sheer amount of contributors that are missing their targets.
Quite a few companies believe this to be a structural issue and they are moving upstream to avoid it all together. You can read more about this in a previous post Going Upstream.
This is Not a Millennial Problem!
It is becoming commonplace to blame the millennials for this. A recent article titled Why Millennial Sellers Aren’t Closing identifies the issues to be “pronounced with millennials that have grown up using screens to communicate.” the author wrongly recommends to “Focus on basic closing skills with millennials and you’re helping them develop vital muscles that get sales results.”
Such rhetoric is outright dangerous. We are blaming the freshman on the team for the non-performance of the team. Seriously!?
So if not the Millennials what is the real problem?
The Swiss Cheese Model
The Swiss Cheese Model for accident causation was developed in 1990 by James Reason and is used today to understand systemic failures in healthcare, aviation, and engineering along two approaches:
- The Person Approach focuses on the errors of individuals, blaming them for forgetfulness, inattention, and/or moral weakness
- The System Approach concentrates on the conditions under which individuals work and build defenses to avert errors or mitigate the effects
James Reason states (and I am paraphrasing):
Humans are fallible and errors are to be expected, even in the best organizations. Errors have to be seen as consequences rather than causes, having their origins not so much in the perversity of human nature as in upstream systemic factors.
Systemic Factors in B2B Sales
The picture below identifies three upstream systemic factors experienced in many B2B sales organizations:
- It starts with the lack of any formal sales training on academic or professional level
- Most companies are ill equipped to train people in-house
- Companies put people in positions where their failure has immediate impact
Over recent years B2B revenues toppled due to the switch from an Upfront/Perpetual License model to a SaaS subscription model. The Client Acquisition Cost suddenly became a big issue. That resulted in hiring lots of first/second jobbers.
This explains why hiring more experienced and experienced B2B enterprise sales reps will challenge the business model. This also explains why some companies move upstream, where deal sizes are 10x.
The difference between the skills of the more experience EnterPrise Sales Rep vs. the first/second time Account Executive is referred to as the Sales Skills Gap.
The Sales Skills Gap
These systemic factors are causing a Sales Skills Gap. This is the gap between what customers expect/need from a sales organization vs. what they get.
The customer expectation has changed in many ways as the result of gathering information online. But what has not changed is the three specific areas a customer expects sales professionals to know their stuff:
- Know your market — problems customers are having
- Know your product — how to solve a customer’s problem
- Know how to sell — match the solution to the problem
This sales skill gap is not unique to Millennials as customers themselves continue to change in the way they become aware of a problem, the way they educate themselves on a solution, and how they select the right partner to help them solve the problem.
Expecting this gap to be closed with a two week on-boarding program or a two-day sales kick-off is just not realistic.
Four Issues All Sales Generations Experience
There are several key issues that are amplifying the impact:
1. Compressed B2B Buying Cycle — Today’s B2B customers need a solution to problems they are having right now. This speeds up the B2B buying cycle (note not a “sales cycle”) and minimizes the ability for new sales people to learn on the job without immediate repercussions.
2. Dependency on the entire sales team to perform— A recurring subscription model has a lower price point that has made it immune to RainMakers. Success in organizations based on a lower Contract Value depend on average performers hitting at least 80% of quota.
3. Transformation of Sales Skills — Today educated buyers no longer wish to be sold, but instead they want to deal with an expert. The proverbial poop-ski hits the fan when B-performers who lack training on a more modern buyer centric approach miss their targets. Due to the lack of training they fall back on outdated sales techniques causing frustration with customers—and a downward spiral starts.
4. Rapid Growth demands — All of the above are amplified in rapid growth companies tasked with growing sales by multiples due to the immense potential of a connected world.
Failure to hit these growth targets put companies under excessive strain. Untrained management unfamiliar with the root-cause of the problem deploy the People Approach and start to fire and re-hire. Again this causes the gap to only increase.
The solution to this problem is not revolutionary. Countless organizations in other disciplines deal with untrained talent that has to excel in a demanding environment. Think of healthcare, armed forces, athletic, and academic institutions.
The steps for success are also known;
Step 1 — Establish a Proven Process
As said, the sales process has changed into an “assist the buyer process”. Having done this for over 100 companies, we found the process below to be a good starting point for most SaaS Sales business.
Tool: Link to the template we use to get started
Step 2 — Create Specialized Functions
Define specialized functions with a clear promotion path. Then train specialists — not to master the entire process but a subset of it;
- Prospecting—Inbound (re-active), Outbound (pro-active), Social (insights driven), ABM (target) etc.
- Winning — SMB (Volume), MidMarket (Speed), Enterprise (Quality) etc.
- Growing — Onboarding (first value), Customer Success (recurring value), Account Management (recurring revenue), etc.
Tool: Below an example of the Mastership program we established with specialized functions for SaaS sales including upward mobility across several levels (SDR(6), AE(4) and CSM (5)
Step 3 — Pursue Excellence
Let me be clear: There are no shortcuts to success. Someone who has done it many times needs to train someone how to do it for the first time. Anything else looks great on stage or in a blog post (like this), where no one can ask a question.
We ourselves embarked on a journey of different training models and over the past years ran into the following challenges:
- Two day condensed sales training: Great reviews post training but with little retention beyond a few skills delivered with enthusiasm. The amount to cover is simply too much to retain.
- 1 to 2 hours per week along a 12-week program: Retention significantly improved. However students are still NOT implementing skills into their daily behavior. This is the result of an increased discomfort of implementing new skills along proven process that exceeds the discomfort of keep doing it the same way enhanced with a few tricks.
- Daily peer-based training program: Most people are not born teachers, combined with lacking a framework and it quickly turns into growth hacking with decisions based on opinions fueled by superficial metrics.
So what is the solution? It is a combination of the above:
- A sales kick-off to establish a customer centric methodology
- Repeated training sessions to teach best practices
- An internal leadership team coaching the skills that apply to practical situations — daily
But then, and this has been a missing piece, you need to apply personalized learning. Companies like Cerego, and Coursera specialize in this field. You need to instill these best practices.
Tool: White paper Translating Learning Science into a Learning Strategy
Step 4 — Enable Your Experts
Today’s sales teams require real-time information. They can’t wait for new information to make it through the pipeline over the next weeks or worse have the customer educate them. This makes sales enablement a critical function over and above sales operations.
Tool: Sales enablement platforms provide sales teams with the most relevant information when and where they need it.
Step 5 — Measure What Works and Stop Doing What Doesn’t Work
Key in today’s world is to measure what works. This so you can stop doing what does not work. This sounds easy enough but many managers find this hard as they will just keep piling on more things. Data will create clarity as to where you need to focus.
Step 6 — Compensation Through Education
You need to motivate the right behavior. Some of you may be thinking “Here we go again … this is where the compensation consultant says we need to pay sales more money”. No. Following nearly 20 year in sales I have to say that if sales people were truly responsive to commission plans most companies would never have a problem with hitting targets.
So what is it?
Instead of just paying them — help your sales professionals establish a long term career in sales. In the example below Neil accomplished Level 1 customer centric sales certification following weeks of training, game tape review and testing. His certification has become an integrated part of his LinkedIn page.
Companies that offer sales performers with meaningful certification in a trade that is void of education are going to draw the best talent as such certification over time will create a tiered seniority that is no longer just dependent on quota performance.
The best talent is going to help the right customers. The right customers Will help your company succeed.
The challenges companies run into during rapid growth are not the result of one particular group (Millennials) lacking one particular skill (closing) but rather the result of a trade that is undergoing a rapid transformation.
Most organizations are ill-equipped to assist their sales team through this transformation. As a result sales professionals are forced to “figure it out by themselves” by passing along tribal knowledge while they are put in key positions tasked to generate revenue.
New category leaders will recognize and capitalize on this opportunity by establishing a Mastership program for their sales teams, and enable them with the latest information to make their sales force the unique differentiator.
Each of us can only do so much, but as a group we can truly make all the difference to a brand new generation of sales professionals. So let’s do this together!
Anything to add to benefit the readers? I truly love to hear your views, ideas via the comments section.