Small Companies Up Quotas for Salespeople
Posted by: Amy Barrett on June 03, 2009
So with the economy in the tank it would seem like a tough time for sales reps. And guess what? It’s getting tougher.
According to CSO Insights, a Boulder, CO-based research company that tracks the sales and marketing world, small companies are responding to the downturn by leaning even more heavily on their sales teams. CSO Insights managing partner Jim Dickie says 87% of 550 small firms (those with $50 million or less in sales) his firm surveyed late last year and early this year had raised their quotas for 2009.
But it's unlikely that pressure will have the desired result. According to Dickie's survey, only 57% of reps at small companies hit their quotas in 2008, down from 60% in 2007. And with a robust economic recovery unlikely this year, that number could go higher in 2009. That could spell trouble for small companies that set unrealistic expectations for their reps. Dickie puts it this way:
In the last couple of downturns we saw, as the economy recovered, voluntary turnover [among salespeople] increased. People may feel burned out and feel they were not taken care of. And that [turnover] can be a huge hit to recovery.
The reason: it takes about ten months to get a new sales rep up to maximum productivity. So if a business loses top performers just as the recovery takes hold, they will miss a lot of opportunity.
Dickie says the key is to focus on giving your sales people tools to make them more productive. So while he says a survey he's doing now shows about two thirds of companies have cut spending on generating new leads for sales people, that sort of move is counterproductive. The key is to give better tools and training to sales reps-and not set the bar so high that they lose all hope of clearing it.