... Diagnose Coaching Needs of Salespeople

 

Potential coaching needs of a salesperson manifest themselves at the latest, when lagging key performance indicators, very often quota attainment, indicate a performance issue. However coaching is not always the appropriate remedy for fixing the issue. This guide is designed to help sales managers to focus on those situations where coaching usually leads to performance improvements.

 

1. Exclude Influences From the Context the Salesperson is Working in

Failing to attain quota is not necessary only due to the salespersons ability. For example If the salesperson was assigned to a territory where the law of diminished returns applies, it might well be this fact that causes the issue and not the salesperson’s ability. The same can happen when quotas where just increased uniformly by a fixed percentage, not taking into account variances in the number of potential customers in different territories.

 

Once you are reasonably sure that the context is not the primary cause, then

 

2. Assess Whether Coaching is the Right Approach to Improve Performance

Assessing the salespersons willingness and ability will help you determine whether performance improvements can reasonably be expected from coaching efforts The combination of the 2 attributes leads to four types:

A: Willing and able

B: Willing and not able

C: Not willing but able

D: Not willing and not able

 

A salesperson of type A should usually not have performance issues. If they are appear anyway, then either context related facts in point 1 have been overlooked or the assessment of the person is too favorable. 

 

Type A therefore does rarely need coaching. This does not mean that managers should leave them alone. Should a type A person ask for help, this should be treated with high priority by the sales manager. This is in the best interest of the sales manager. Type A salespeople are usually also the high performers in a team and therefore have an above average contribution to the success of the team and thus the sales manager. Exception handling alone will however not assure constant high performance. Praise is a great motivator for type A people. Managers have to careful that this praise is delivered in an appropriate manner, so that the danger of the manager falling into a dependency of the salesperson is minimized.

 

Trying to improve the performance of type C and D salespersons through coaching is probably a lost effort. Counseling is usaally the better approach to try to remedy the lack of willingness. Care should be taken, that the lack of willingness is addressed as objective as possible. It can be that the manager’s perception is due to a misalignment of values. It might well be that the salesperson does not mind having missed the quota because compensation remains still within that person’s expectation and aspiration whereas the manager would not accept the reduction in income were he/she in that position.  In this situation, the salesperson does not fit the organization and it could well be that the manager should never have hired the person into the team.

 

This leaves type B salespersons as the primary target where a performance improvement can be reasonably expected through coaching.

 

3. Indicators leading to coaching topics

Key performance indicators derived from revenue (e.g. quota attainment, lagging in year to date sales versus budget etc.) are not helpful to understand coaching needs of a salesperson. We suggest focusing on the following four parameters which influence revenue generated by a  sales person:

• Number of opportunities in a salesperson’s funnel
• Average deal size
• Average time needed to move an opportunity through the funnel
• Conversion rates.

 

The following list gives some examples of root causes that can be detected through these indicators.

 

3.1 Number of Opportunities in the Sales Funnel

Significantly fewer opportunities compared to high performance peers at the entry of the funnel usually indicate lack of ability in managing customer relationships.

 

3.2 Average Deal size 

Significantly lower average deals size compared to high performing peers can be due to lack of ability of up selling (e.g. warranty extensions, additional services etc.) or can be the result of too high dependency on heavy discounting to close deals.

 

Low average deal size in connection with a high number of opportunities in the funnel can indicate a lack of focus and difficulties in the qualifications of opportunities.

 

3.3 Average Time Needed to Move an Opportunity Through the Funnel

Coming from the angle that the sales process should be mapped to the buying process one could be tempted to take the velocity of an opportunity as a given, that cannot be influenced by the salesperson. First, there are indications that customers, at least in the IT market, believe that sales cycles are longer than they need to be from their perspective.  Second, salespeople understanding well the forces at work within a buying center of a complex sale can help accelerate decision making.

Third, the cause for low velocity can also be due to how the salesperson spends his/her time overall. Comparing the time spent on key activities between the person to be coached and a top performer might be necessary to detect this cause.

 

3.4 Conversion Rates

If the sales process is documented in the form of a stage gate process with customer milestones, analyzing the conversion rates between the stages allows for a proactive detection of coaching needs before the lack of capabilities becomes visible through lagging indicators.  We will give just one example how this can work. Imagine a funnel that shows a strong contraction in the stage following the stage where an opportunity is qualified. This indicates a lack of qualification capabilities by the salesperson.

 

The stage gate process can also be used in a time related context. If opportunities are frequently lost to competition already at stages in the middle of the funnel, this is an indication that the salesperson is entering too late into the buying cycle.

 

Conclusion

We hope having demonstrated that not all performance issue can be resolved through coaching. Where coaching is appropriate, a small number of indicators will allow finding the causes that need remedy through coaching or training if it is a team wide phenomenon. Among those indicators, conversion rates in a stage gate process with customer milestones are the most effective to apply preventive continuous coaching.