It takes a lot of man-hours of delivery teams to bring in $4M revenue into the system but it just takes one Sales Manager to lose the same amount of money!
CEB recently reported that a failed sales manager would cost $4M. This happens by reducing productivity, taking a toll on customer experience, and stunting team engagement, in addition to salary, training and recruiting fees.
Now, this is at a single sales person level, when these numbers are given at an organisation wide level then they are really huge. A sales team failure hits the organisation at all the levels and the failure percolates and impacts every single employee in the organisation. If you still have a question on how, then think about these areas.
Here, failure of a sales team is defined as, “when a sales team fails to achieve the quota/plan provided to them.”
Negative impact of the poor performance of sales team can be felt in all the places of an organisation but here we have categorised it into three major buckets: organisation level, leadership level and sales representative level.
1. It takes a long period of time to regain trust. Sometime, it's not even possible
How do the shareholders feel when the CEO of a company faces the stakeholders for the third consecutive quarter without meeting the revenue numbers? The first thing that strikes their mind is to sell their shares. Well, why won’t they?
Let‘s say a company like Gucci which has more shareholders. Though most of them would be individuals and employees, what will happen if the company is not able to deliver on the promised revenue number for quite some time? Yes, the trust on the company is lost.
Agree or not, a large portion of the strong word “responsibility” would lie with none other than the sales teams.
2. The Set-up-to-Fail Syndrome
With series of poor performance, the equation of the sales heads with the leadership team will gradually change. It would result in an ideal “Set-up-to-Fail Syndrome”. The syndrome surreptitiously begins because of the initial impetus of undershooting the target and slowly the relationship spirals from bad to worse. And this only ends with a change in sales leadership positions or leadership as such and it when the spiral chooses to end.
3. The organisation stops believing in itself
Supply chain teams won’t believe the build numbers that are provided to them. Every team in the organisation will start questioning the efforts and this would also lead to decreased productivity and slowly it will start losing the trust on itself.
4. Demoralised account managers
As the whole setup crumbles, the account managers are the first to witness the hit. Sales team will stay demoralised, the positions and accounts get changed drastically. Territories changes and this adds more salt to the wound. Because of the changes, there are more negative vibes and this vicious circle which will be hard to control.
It could be noticed that it started with missing on the revenue numbers and as this is a vicious circle the problems ends with missing on the revenue numbers and it keeps spiraling which means there is no end to it.
We all know it takes a lot of effort to move the needle from negative to positive. But how would it feel if you were given an option to hold the needle in positive alone?
By Alagiri Samy, Analytics Consultant, BRIDGEi2i