Study Shows Sales Missed by 50%

Posted by Bonny Albo Mar 1, 2007

The TAS Group, the world leader in sales effectiveness solutions, today released results of its TAS Index Global Sales Effectiveness Benchmark Study 2007, which shows that in 50% of companies globally, less than half of the sales team achieves its sales targets.

In addition, the report notes that American salespeople lack deal-closing skills compared to their European and Asian counterparts. It also finds that sales management and sales reps have widely differing perspectives on what’s working and what’s broken, salespeople employing sales methodologies perform much better than those who don’t, notes which industries have the most effective sales teams – and which are the worst, and more.

Not Making Quota

According to the study, more than 50% of companies say that less than 50% of their salespeople make quota. Based upon this figure, it would appear that an enormous number of organizations are experiencing severe sales challenges.

American Effectiveness vs. Europeans, Asians

While European salespeople scored similarly to Americans in terms of sales effectiveness (6.41 versus 6.35), they appear better at generating sales opportunities, deal close rates and maximizing value creation in those deals. American reps, however, are better at managing the sales cycle. Compared to their counterparts in Europe and Asia Pacific, Americans seem to be worse at closing deals, supporting their channel partners and disseminating a standard sales process throughout their sales organization.

On the other hand, it would appear that European and Asian salespeople could learn a few things from their American colleagues when it comes to integrating the sales organization with the rest of the company. The report indicates that the Americans seem to have better alignment with marketing and the overall company strategy and are better at describing the value a company has to offer.

The top three things Europeans could teach Americans are defining the sales process, supporting channel partners and dealing effectively with competition. Asian salespeople, on the other hand, seem to the best in the world at qualifying sales opportunities, leveraging sales management for coaching rather than just chasing the sales team for details and maximizing the value from each customer.

Different Perspectives of Sales Management and Sales Reps

According to the study, the different perspectives of individual sales people and that of sales management can lead to sub-optimal sales effectiveness and immediate improvement opportunities. Nearly three out of four (72%) sales managers believe that their sales process is well defined, while nearly 50% less, just two out four (56%) of sales reps believe this is so. In addition, 48% of sales managers think they spend their time coaching (not chasing the reps for updates), while just 34% of reps agree. Conversely, 58% of reps believe they close deals when originally forecasted, while only 46% of managers agree. And 53% of reps believe they are effective at maximizing return from existing accounts, versus only 42% of managers.

Methodology Usage and Related Sales Effectiveness

The study showed that companies that use a sales methodology more than half the time do much better than those that don't. In fact, among those salespeople, the number of people who make quota is 50% higher than those who don’t and the percent of sales proposals resulting in a sale is 77% higher. Strikingly, sales force turnover is lower by 39% when methodology usage is high. This has a really significant impact on a company’s cost and sales effectiveness as the average time taken for a sales person to ramp up to full productivity is more than three months in 83% of cases and more than six months in 50% of companies.

Top, Least Effective Sales By Industry

Salespeople surveyed were largely from the financial services, insurance, high-tech, medical devices/pharmaceutical, consumables and food and communications industries. Within these segments, sales people from financial services ranked best (7.1), while insurance salespeople ranked last (5.1) in effectiveness.

To get more details on the TAS Index or to participate in the ongoing study and obtain results for themselves at no cost, interested parties should visit www.tasindex2007.com.