Study shows sales firms can’t cut their way to growth
The latest Sales Performance Optimization study, via CSO Insights, makes a convincing case for cognitive dissonance between sales managers and their sales teams.
According to the study, which surveyed more than 2,800 companies worldwide, the percentage of sales reps making quota in 2009 dropped to 52%, from 59% in 2008. As a result, overall revenue plan attainment dropped to 78% from 85% during the same period, the study said.
But the culprit for declining quotas is not hard to find. The study found that many companies slashed their investments in their sales teams: Lead generation budgets were frozen or reduced by 67% of the firms surveyed, training investments per rep fell by 13% and net new investments in CRM technologies were curtailed.
“At the end of 2008 86% of the firms we surveyed reported that they were increasing quotas for 2009. Many of these firms then tried to ‘cut their way to success’ by reducing budgets. The results show that strategy was a huge mistake,” said Barry Trailer, managing partner of CSO Insights, in a news release.
He added: “Again in 2010 85% of the firms we just surveyed have raised their sales rep revenue targets. We can all hope that an improved economy will be the tide that raises sales performance this year, but it would be foolhardy to count on that. Higher quotas need to be accompanied by increased investments in sales in 2010 or we may be looking at even worse sales performance numbers next year.”