It’s not even sales effectiveness (at least, as “sales effectiveness” is generically defined). It’s more specific than that.
It’s the sales performance gap.
This is the (vastly misunderstood) delta that separates the top 20% of your sales force from everyone else, creating a performance bell curve that looks like this:
This divide wreaks havoc on your ability to make your number, your cost of sale, rep turnover, and even your job tenure as a sales leader.
And here’s the big kick in the pants …
Across most sales organizations, this gap is actually getting wider, not smaller.
The average percentage of B2B sales teams attaining full quota is gradually shrinking each year:
Despite this, annual quotas continue to increase from year to year (7.5% per year for the last two years, according to Sibson Consulting).
Ask yourself: Do you expect next year’s number to be bigger, smaller, or about the same?
Here’s What This “Gap” Is Costing You
This delta between performance echelons has some pretty horrific costs when you examine it more closely.
Opportunity Cost: Hundreds of Lost Deals
The fact that most of your sales force is performing at a “B level” (which is usually around 80% of quota) means hundreds of qualified opportunities are poured into the pipeline but fail to materialize into revenue.
These are all deals that could have closed, should have closed, but didn’t.
Think about the volume of qualified deals that would close if every rep that makes up your “middle of the pack” had just a 5% higher close rate?
As someone with a vested interest in ensuring leads eventually close, thinking about this makes my stomach churn.
Your Cost of Revenue Soars
Middle of the pack performers, of course, do close deals. But they have to wade their way through many more lost deals than star performers before they finally get a win.
And the deals they do win have longer sales cycles and smaller average values.
These factors combined drive up your cost of revenue. More leads are required to get smaller deals over a delayed period of time.
Rep Turnover: The Gap Creates the Dreaded Revolving Door