Published on Jul 20, 2020
When a sales rep is noticeably underperforming, you have two choices.
1) Let them go and find a replacement, or 2) create a sales performance improvement plan (PIP) to help them get back on track.
Considering the average cost of hiring a new sales rep is about $15,000, plus $20,000 in training, choosing the latter option is often the best choice, especially when a person shows promise.
Here’s an actionable, step-by-step guide to developing a rock solid sales PIP to maximize a rep’s potential, help them boost their confidence, and coach them into a sales powerhouse.
In some cases, the main reason for underperformance is simply a leak in their sales funnel. If there’s a particular stage where a large number of leads are dropping out, you’ll want to identify it.
Maybe, for example, you find that after providing a demo, the rep’s leads aren’t converting like they should. When done correctly, “a demo video can increase conversions by 85%.” But if it’s not hitting the mark and is low quality, doesn’t fully explain the benefits of your product, or is too long, it can result in leads backing out prematurely.
Research has found that nearly 40% of leads lose interest once a video hits two minutes in length.
So, the first step is to get a bird’s eye view of your sales funnel and see if there are any changes you can make to put your rep in a better position to succeed.
Next, you can gain insight by analyzing key opportunities a rep has lost in the past. Examine at least five situations, and patterns should emerge.
For instance, maybe there’s a trend where using a particular sales technique, like being too pushy and trying to force the sale, is turning leads off.
The data gathered on lost opportunities combined with leaks in the sales funnel should provide you with a clear vantage point on the exact cause behind a sales rep’s low performance.
Beyond that, you’ll want to see if there are any other factors behind it, such as:
To streamline the evaluation of your sales team, you can use a tool like HireDNA to identify weaknesses and generate concrete data for crystal clear insights.
Then, put all of this information together to get to the root of the problem, as this will shape the specific path you take with the rest of your sales PIP.
At this point, you’ll want to clearly state where your rep is currently at in terms of their sales performance and where they need to be. To do this effectively, you’ll need to set quantifiable goals so a rep knows what your expectations are.
Here’s a simple example. Say that the rep has a volume-based sales quota, which is measured by the number of products they sell or the total revenue they generate for a particular period. They’re currently only selling an average of 30 products each month, but they need to sell 40.
This would mean they’re only hitting 75% of their quota, so they need to increase their sales by 25%. Having a clear number like this shows a rep exactly how much they need to improve, which eliminates any ambiguities or confusion. To make this process more manageable, it’s wise to break large goals into smaller sub-goals.
Here are some examples:
Once you’ve outlined the level a rep needs to get to, it’s up to you to help them get there. For instance, you could provide them with continuous sales training by assigning them a mentor and giving them access to an online education portal. This alone, can result in up to 50% higher net sales per employee.
Or, you could give them a cutting-edge sales tool, such as a mobile CRM, that helps reps manage leads more efficiently, so they can spend less time on redundant tasks like data entry and more time selling. Research has found that for companies that use a mobile CRM, 65% of reps hit their sales quotas, whereas only 22% of reps reach their target without one.
Another integral part of the process is figuring out how to effectively motivate each rep. At the end of the day, much of their output hinges upon motivation, so you need to know what they’ll truly respond to.
According to The Harvard Business Review, here are some specific motivation strategies that work best:
And finally, track their progress at logical intervals. For example, look at KPIs two weeks after implementing the sales PIP, after one month, after two months, and so on.
This will let you know precisely how much progress a rep has made and if additional improvements are necessary.
Firing a rep for underperforming is seldom a recipe for success, and is both costly and time-consuming. Instead, it often makes more sense to enhance a rep’s performance by creating a sales PIP.
In many cases, this not only gets them up to par with the rest of your team, it allows you to extract their full potential, which improves your company’s bottom line.
HireDNA is a platform that’s designed to optimize recruiting and build a stronger sales team. Learn how HireDNA’s assessment tools can help you perform individual performance evaluations, while taking a science-based approach.
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