Keeping the Human Element in AI for Sales
The 60 Percent Factor
Why do we accept 60% quota attainment? It seems every day I see another news story read or an article discussing the fact that somewhere between 40% and 50% of B2B sales reps in the US fail to attain their quota numbers. Why is that?
There is a plethora of tools and applications available to Account Executives, Sales Leaders and Sales Enablement and Operations personnel in support. How can the efforts of these talented and hard working folks lead to such poor results?
I have a theory. Actually, I have a couple of theories. The first cause indicated is tenure. A 2018 report from the Bridge Group indicates that B2B Sales rep tenure is less than 24 months. David Stein, CEO of ES Research, writes that Sales Manager tenure can be as low as 19 months. If you look through the marketing materials provided by ABM leaders like Terminus, you will see similar statistics quoted for marketing tenure. Time in position has never been lower and is continuing to shrink.
Tenure of Reps and Managers is a Symptom
Clearly, tenure numbers like those indicate that there will be problems understanding products and customers, which will lead to poor quota performance. A new sales manager needs a year of experience to build an understanding of the product and the ways that customers use the product.
With such high turnover rates, sales onboarding becomes a very short runway that focuses on product knowledge rather than the skills needed to succeed in the new position. Kelly Riggs discusses this skills training topic very effectively in the Business Locker Room blog. I suggest that this is more a symptom than a root cause.
The underlying problem is twofold. There is an overwhelming pressure to deliver revenue within unprecedented levels of competition. In addition, there is the micro granular level of analytics focused on sales activities.
Take a look at SalesHacker’s 2018 Sales Technology stack. If you are selling sales technology, every one of those offerings is a competitor and more enter the fray every day. This market segment is far from unique, in fact every B2B market segment is fraught with competition.
A friend of mine is a Senior Director at a top 10 retail firm who prides himself on introducing effective new technology to the firm. He tells me that some weeks he gets 500 solicitations. Some of the products may be the next great thing, but he has no way of sorting them all out. If he did not know me, he would never open my emails or discuss my products. This is a good example of why sales longevity matters.
It’s time we balance the scientific and the human in B2B sales.
In this intensely competitive environment, the rep who only knows his or her product but may not have a strong grip on the overall technology market, or who may not be completely familiar with the nuances of the industry is at a hopeless disadvantage. This stresses the critical nature of making the most of each and every opportunity presented to a rep.
The second underlying issue I see is in the metrics surrounding sales. The volume of analytics and AI tools that measure sales activities, and I stress activities, calls to mind the early days of Taylorism and Scientific Management.
The theory of Taylorism was that all activities could be reduced to an optimal few repeatable steps and that each step could be patterned, models and measured.
The upside of Taylorism is that it facilitated the Fordist process of manufacturing. The downside of the Taylorist model is that it so dehumanized the worker that many unions insisted on not implementing the Taylorist process.
The Taylorist underpinnings matured and evolved and can be seen in more humanly inclusive terms in the Toyota Production System of continuous improvement and respect for people. I don’t want this to sound like a Luddite rant against new scientific sales methodology, so I will come to the point:
The Human Element of AI for Sales
I base my contention on two pillars. First, that the tool sets available today for Sales Operations and Sales leadership, whether they are metrics based or algorithmic, or employ Machine Learning (ML) and AI, are focused overwhelmingly on sales tasks. This is activity-based optimization.
The message is clear that the route to success is to define the most successful rep activity in infinite detail and then have every other rep emulate those activities as precisely as possible. This is classic Taylorism; one optimized size fits all.
The second pillar is that the tools available to sales leaders today do not help the sales leader understand the skills and attributes of the individual reps. The tools strike me as being prescriptive before there is a diagnosis. The tools want to provide the best average solution rather than the right individual training and skills enhancement needs for each rep.
One size fits all coaching systems are not an improvement over the status quo.
I would also suggest that the state of performance against quota discussed above argues powerfully that the current approach is not working well and that some key element of sales performance is being overlooked.
I further suggest that insight into the skills and attributes of individual reps in the interest of forming easy to use and effective prescriptions is the next step forward to start winning the war quota attainment. The new sales leader who is trying to make his numbers and manage a team and learn a new space needs the system to do the work for him or her; to shed light for him or her directly on the specific areas of performance that require coaching for each rep–not in activities, but in the skills and attributes that drive those activities.
Focus Your Attention Where The Most Benefit Can be Found
The sales team is a set of individuals with particular skills and attributes. Some team members are top performers, some are low end performers and most are in the middle of the pack. This is the classic bell curve distribution of human performance attributes.
The system provided for the sales leader needs to make it easy to see the characteristics of the team, not just the activities. The system needs to help the leader understand who needs help and who doesn’t; who can be coached to success and who should find success elsewhere and most importantly how to move the middle of the bell curve reps to the next level of success. Improve the performance of the reps in the middle of the performance bell curve and the entire team‘s quota performance will leap forward.
Why is this Important?
Improving Quota performance is likely the single most effective way to address the tenure issues discussed earlier. According to Sales Fuel, three of the five most common reasons for sales reps leaving can be managed through (1) better coaching from the immediate manager and (2) the opportunity to make planned money. A good, individualized insight system to help sales leaders get their teams to 100% quota attainment answers the call. If the team is making its quota and earning planned dollars, the impetus to leave is greatly diminished.
Measuring sales activities is not enough. To move performance, manage individual skills and attributes so that each team member can perform to the best of his or her ability.
Sales is the most human of business processes and appreciation of the human elements of sales success along with the provision of tools that help incorporate human attributes into the management flow will help turn the tide in our favor in the war for 100% quota attainment.
This article was written by Joe Lupton.