CSO Insights recently released a white paper titled “Closing What You Forecast” examining recent findings contained in their annual Sales Management Optimization Study (SMO). This particular white paper focuses on sales forecasting trends and activities that can increase win rates and reduce losses/no decisions.
Data contained in the 2011 SMO study indicated that reps achieving or exceeding quota increased from 50.8% in 2010 to 59.4% in 2011 but the win rate of deals forecasted to close was stuck at a weak 44.8%. A deeper dive into the metrics shows that “what” and “how” your sales leaders manage can make a huge difference in these results and on overall sales performance.
How Effective Sales Leaders Spend Their Time
It’s probably no surprise that almost 50% or more of a sales leaders time is spent on selling directly alongside their sales people and providing coaching /mentoring. The 2011 SMO study strongly suggests that companies with proactive coaching styles win a greater percentage of the deals they pursue and also have significantly lower no decision rates.
The study assessed firms based on their ability to provide proactive coaching. Companies reporting that their proactive coaching methodology exceeded their expectations significantly out performed companies that reported their coaching methodology needed improvement.
Here are some statistics from the study that show how beneficial proactive coaching can be to improve sales results. The numbers are a comparison between companies reporting proactive coaching exceeding expectations and companies reporting that their coaching process needs improvement.
Sales Coaching Results – ‘Satisfied’ vs. ‘Needs Improvement’ Responses
- 21% higher forecasted win rate (51.9% VS. 43%)
- 15% lower loss rate (33.1% VS 28.6%)
- 22% lower no decision rate (23.9% VS 19.5%)
Sales team effectiveness is a combination of the right salespeople with good selling skills and sales leaders that can continue to help them hone their skills. While many companies find the time and investment dollars to provide sales skills training they often overlook the fact that their sales leaders also need investment. Don’t be the manager that makes the “diving catch at the goal line” for their reps, be the player-coach your team needs to become best in class caliber.