Sales statistics – focus on those that matter, ignore those that don’t

April 20, 2017

As salespeople we are surrounded by statistics – quotas, volumes, margins, targets and others – which influence our own and other people’s perceptions of our success.

Yet, as the famous quote goes, ‘there are three kinds of lies: lies, damned lies, and statistics.’ The quote is often wrongly attributed to Mark Twain, who in turn pinned it on British Prime Minister Benjamin Disraeli. Whatever the origin of the quote, one thing is certain. It’s easy to get statistics wrong; and just as easy to popularise skewed numbers. What they lack in truth, they make up for in being memorable and easily exchanged in casual conversation.

So, in a world full of misleading stats, which ones matter for us as salespeople? And which ones can we safely ignore?

1. ‘The internet isn’t your friend’: According to the almost-real-time clock on internetlivestats.com there are now more than one billion websites. Physics.org claims these 550 trillion megabytes of data would take a diligent reader – make yourself comfortable – three million years to read.

There are two things to take away from this. First, neither of those statistics has any practical application. Second, people don’t read diligently – a 2014 report from Time magazine estimated that more than half of us spend less than 15 seconds on each webpage we visit. Internet articles on sales statistics are often front-loaded with words like ‘shocking’ and ‘unbelievable’: the real problem is that the articles themselves are ubiquitous and full of spurious statistics.

A 2014 report from Time magazine estimated that more than half of us spend less than 15 seconds on each webpage we visit.

2. ‘Around 80% of salespeople get 8% of the sales: This perennial bad penny sets the standard. Even if this questionable stat is coincidentally true for your business, it has little value for a wider audience. It’s an amalgam of two cherry-picked numbers. First, that 80% of sales are made after the fifth call; and second, that 92% of salespeople give up before that. The two numbers are then repackaged into an abridged version that trips neatly off the tongue.This one is often attributed to something called the National Sales Executive Association (NSEA) – as are many of the sales stats you’ll see online. But google NSEA and you will see some fascinating insights into the world of fake stats and more.

3. ‘Approximately 60% of revenues are generated by 20% of salespeople – but only 44% of companies know why’: This one looks similar to the statistic we just debunked, so what makes it different? It features in a 2016 report from CSO Insights which analysed a group of 1,200 sales respondents alongside a subset of ‘world-class’ sales organisations. The point of the research is that every company has salespeople who outperform others: the key is to know why that happens.

The report identified that among the larger group of 1,200 respondents only 44% could explain why some of their salespeople were more successful than others; while in the ‘world class’ category the figure was 94%. Understanding what lies behind the statistics – why the numbers matter – is more important than the raw numbers on their own. World class companies have a better understanding than the also-rans of what their sales forces are doing.

4. ‘Less than 50% of companies continually assess their salespeople’: As CSO Insights dug deeper into how far companies go to understand their salespeople, they found that, for most, assessment stops after the interview. Fewer than half of respondents – 47% – applied continuing aptitude and competency assessments. Of those that did, the most successful companies examined sales managers as well as salespeople.

One final note from this report – less than one quarter of firms surveyed had a process for sharing best practice with their colleagues. Not only do many companies fail to keep their sales machine well oiled, it seems from the research that they don’t share what they do learn internally.

5. ‘Buyers are 57% of the way through the buying process before engaging with a salesperson’: This is another popular but dangerous sales stat, which came from a 2012 white paper by the Corporate Executive Board in partnership with Google. A subsequent report by SiriusDecisions refined the figure to 67% but pointed out, rightly, that not engaging a sales rep isn’t the same thing as making an actual purchase decision. Their definition of the stat was that 67% of the ‘sales journey’ is now done digitally.

Either way, the implication is that companies shouldn’t waste their time looking for new sales leads, because a high percentage of those potential buyers are already lost. Instead they should concentrate on mining existing leads. But that’s a short-sighted strategy and even if it were true, is the remaining 43% (or 33%) really worth ignoring?

Companies shouldn’t waste their time looking for new sales leads, because a high percentage of those potential buyers are already lost.

6. ‘It’s said that 59% of salespeople suffer from distraction’: A traditional approach to chasing sales has been to give salespeople more time to do the selling. That often means putting in place ‘time-saving’ processes and technology. But a 2016 report by Accenture found that 55% of salespeople believe their company’s sales tools get in the way of performance, rather than improving it. Around 59% said they actually had too many tools. Accenture suggested that ‘distraction’ – the proliferation of information to the detriment of getting things done – has actually reduced productivity by 14% since 2011.

Again the key thing is to understand what lies behind the stats – there may be unexpected consequences from giving salespeople too much information and too many tools – rather than relying on the raw numbers themselves.

7. ‘Approximately 64% of customers switched at least one provider in 2015’: A 2014 report from Qvidian found that many organisations perpetuate wasteful activities and processes without realising it: only 7% of survey respondents believed their organisation could spot inefficiencies. Yet while firms are struggling with inefficiency and inflexibility, customers are free to shop around. Accenture found in their 2016 survey that 64% of customers had switched providers in the previous 12 months. Worse, most of those customers felt their provider should have ‘done something’ to stop them from leaving.

This takes us back to the importance of not taking statistics, particularly negative ones, at face value. Don’t assume that just because a statistic is bad – the 64% – there’s nothing you can do about it. What will you be doing while the 64% are looking for a better deal, to prevent them actually leaving.

8. ‘Good communication matters’: This year, Middle East recruiters Bayt reviewed the most sought-after skills among UAE employers. Good communication topped the list for 68% of employers, but it matters to clients too. According to a report from Altify last year, 56% of salespeople believe they add value ‘most of the time’. Unfortunately, more than a third of buyers feel it’s more like ‘rarely’ or ‘never’. Good communication goes both ways. Talk up what you’re selling, but don’t forget to listen. Buyers need to know you understand their needs, not just your product.

9. ‘Around 80% of salespeople who fail, do so because they don’t prospect’: Up to 80% of salespeople who fail in their first year do so because of insufficient prospecting, while 40% of all salespeople experience at least one episode of call reluctance that’s serious enough to threaten their career. In 2011, Robert Hastings even claimed that call reluctance is dormant in 97% of all sales people.

These figures may seem high but they’re reminiscent of the earlier statistic on buyers who make decisions before engaging with salespeople. It’s a salesperson’s job to engage, not to wait to be engaged. In 2017, the phone is still an important part of the kit – it’s too easy to rely on social media at the expense of picking up the phone.

Call reluctance isn’t attractive in salespeople, but before using numbers to decide who stays and who goes, here’s another illuminating figure. More and more millennials – your sales force now and in the future – are embracing mentoring. A 2016 Deloitte report found that among those who intend to stay with their organisation beyond five years, 68% have a mentor. Young people want to learn, and good managers know their best people won’t arrive fully formed. The desire to improve and be improved is a valuable asset. 

A 2016 Deloitte report found that among those who intend to stay with their organisation beyond five years, 68% have a mentor.

What place do statistics really have?

The British comedian Vic Reeves once said that 88.2% of statistics are made up on the spot. Joking aside, while there are useful statistics to be teased out of the vast array of sales research now available to us, there’s a real problem with spurious figures and disingenuous claims. And you can waste a lot of time trying to find meaning in what’s essentially a perpetual distraction, devoid of pattern and insight.

Two-thirds of businesses in the UAE fail in their first three years. To make sure you’re not one of them, spend your time understanding the real nuts and bolts of your own company, not looking for answers in sweeping generalisations.

Would you buy a suit based on the dimensions of 96.5% of managers, or would you have it tailor-made? Even if you bought off the peg, wouldn’t you come armed with your own measurements?

What the sales stats show, if anything, is that it’s paramount to know how your own sales force functions. If some people outperform others, by all means figure out by how much.

But then work out why.

About the author: Karl Hougaard; Managing Director at Virtugroup
About the author: Karl Hougaard; Managing Director at Virtugroup

As Managing Director at Virtugroup, Karl ensures the company maintains its position as one of the fastest growing business setup operators in the region. Karl was in fact a customer before joining, having owned and operated three different companies set up by Virtuzone. Karl started his career as a senior manager with Primovie, the Cinema Operations arm of Primedia LTD in South Africa, which saw him relocate to Dubai in 2001 as part of the group’s global expansion plans. He has also represented some of the region’s largest media firms including ITP Publishing Group and Dubizzle.com. 

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