The Pareto principle has been applied to everything from farming and land ownership to productivity and employee performance since the Italian economist Vincent Pareto first coined it in 1896.
Commonly referred to as the 80/20 rule, the Pareto principle suggests that 80% of all results come from 20% of the effort. Now, on a sales team, the principle suggests that 80% of all sales are generated by the top 20% of your team.
This reality does bode well, especially if there's a large gap between your top-performing salespeople and the bottom of the rung. While you may be tempted to let go of underperforming sellers, there are creative ways to close the gap.
Before investing in training, mentorship, or coaching interventions, it's important to understand what's causing the performance gap. Once you know where the problem areas are, designing a tailored solution becomes easier and you'll be able to track how effective your interventions are.
Some of the most common reasons for performance gaps include the following:
While competence is a factor in performance, there may be psychosocial factors at play. So, make sure you assess the situation thoroughly. Start by listening to the team communicating. You'd be surprised how many mistakes and shortcomings you can pick up just by observing your sales team.
Next, use 360-degree appraisals. 360-degree appraisals use a collection of assessments from each staff member's superiors, colleagues, and subordinates. This approach can help highlight specific problem areas for each member of the team.
Finally, host regular troubleshooting sessions where your sales team goes through actual calls and interactions they have. Not only will it give you an opportunity to demonstrate what a successful sales encounter should be, but it will also create a safe space for underperforming team members to iron out the problems with the sales process.
Companies that invest in regular training and coaching for their sales team can see a profit increase of up to 24%.
However, effective sales training has to be actionable. When putting together a training program, make sure it includes both theory and practical steps for your staff to execute. Whether it's practicing a sales script, role-playing sales calls, or outlining potential scenarios, the program should be transferable and easy to implement.
While your top performers have earned the freedom to go off-script, it's critical that underperforming sales personnel stick to the approved sales script. Incentivize your team to follow the script by rewarding employees who adhere to it and by including it in the QA process.
Closing the sales gap may seem impossible but it's not. With the right strategy and training, you can boost morale and performance on your sales team.