Replace or Train Mediocre Performers? – Part 1

This is part one of a two part discussion on whether to replace or train mediocre performers. Today I’ll discuss the results of the Culpepper Sale Study and how changing behaviors is tough to do. In part two, I’ll talk about the four key elements necessary to establish and then maintain a high performance sales culture.

The world, as we have known it since the late 90s, is gone. No longer are sales executives “order takers” and if they think this is the game, they are in for a rude awakening. The Culpepper Sale Study – a benchmark for the world of sales, released the following statistics:

  • 94% of all sales veterans have had less than 5 days of any formal sales training
  • 87% of all sales managers have had less then 8 days of any formal sales training
  • 98% of all salespeople don’t follow a consistent sales methodology
  • 93% of all sellers volunteer a price decrease without being asked
  • 87% of prospected inquires are never followed up by a sales contact
  • 81% of all sales take five calls or more
  • 80% of all salespeople are willing to accept a 90% rejection rate
  • 40% of all sales veterans experience bouts of call reluctance severe enough to threaten their contribution in sales
  • 93% of all sales veterans have had no training on how to generate their own leads

This got me thinking: with a much smaller bench of good talent, are CEO, COO, and VP sales executives now thinking about training the sales people they have and are about to hire to instill best practices? Or, as it was the case a few months ago, are VPs replacing B players with the hope to hire non available A players?

We all know that hope springs eternal and that changing behaviors is not an easy thing to do. If the executive team is having such a dilemma, I would think that board members, venture capitalists, or financing sources would be smarter, and more appropriately recommend a course of action to their investment companies. Oh boy, was I wrong.

Take this story as proof:  I was having a conversation with a leading venture capitalist a few months ago on Sand Hill road in California (He only had “Sand Hill Road.” No state- I Googled to see where “Sand Hill Road” was- I was not 100% sure this was the right location.) During our conversation he shared with me that he prefers to fire non-performing VP sales executives when faced with an under-performing sales team. I asked if he understood the consequences to the company he had invested in. He gave me a blank stare.  

I proceeded to suggest that between headhunter fees, ramp-up time for the new executive, loss of momentum with existing opportunities, buyout contract clauses (or in other words, severance pay), and other costs, every time he replaces a VP sales executive, it costs his investment a minimum of $500,000. Unphased, his answer was, “oh well”.

The tragedy in his answer was that in the past two years, one of his investments had turned over its sales VP four times. $2 million spent for little to show but an organization that is still not meeting its revenue targets, with a board that cannot trust or rely on the company-created forecast because it has not been met in 5 consecutive quarters, and the continuous intent to achieve different results while doing the same antiquated things over and over again. Once upon a time, I thought this was the definition of insanity!

How to fix these issues? Stay tuned for part two in the series, where I will discuss the four key elements necessary to establish and then maintain a high performance sales culture.

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