In the book “The Challenger Sale” by Matthew Dixon and Brent Adamson it is noted that good sales coaching can improve the performance of sales people by as much as 19% while even average coaching can improve sales performance by 8%.
These figures show that good coaching can have a major impact on performance but it is also a major factor in improving employee morale. Good coaching makes people feel good about their company, makes them prepared to put in the extra effort, and makes them want to stay. It gives them a feeling of growth and achievement, especially if their earnings improve and the high morale this breeds is infectious. This type of morale and commitment isn’t delivered purely through incentives and bonuses. For a sales person to be committed to an organization they need to see that the organization is committed to them. Good coaches make people want to stay.
In companies where the coaching is lackluster and indifferent, with no real commitment or time to be effective, the result is the opposite. The environment is one where a lack of morale breeds dissent and disenchantment. People are always on the lookout for something better. Even top performers will have limited respect for, and commitment to, a company where the only incentive to stay is the money. Knowing their skills are in demand they will be just as easily tempted by an organization that offers high morale and a lively sales team.
There are obviously costs associated with good coaching. The sales manager has to be trained and feel competent and confident to be able to coach effectively. They also need to have the time to coach and the resources and support to deliver the changes that lead to the salespeople feeling engagement and a sense of self-respect and self-reliance. This may need a different approach to who becomes a sales manager, rather than just appointing the top salesperson to move them up the career ladder. The costs for all this are probably equivalent to one or two extra staff.
The costs associated with bad coaching, while not as easily quantifiable, can be much larger. The general low morale in a sales team can be the start of a downward slide that leads to lower performance all round, a lack of belief and pretty soon, loss of market share. This would probably be associated with an increase in staff turnover and the associated costs in loss of revenue while a new salesperson is hired. But the costs don’t stop there.
Recent research by CIO Insights indicates that the time it takes for a new salesperson to become effective can be as long as 12 months with the average being 6 to 9 months. This means that when you lose a salesperson that territory could effectively be unproductive for over a year.
Even well run and coached sales teams can lose as many as 20% of their salespeople each year. Just think how many will want to leave a team where morale is sinking. The cost in lost income could be felt not just in the sales force, but far and wide in the company. In the end this could lead to a downward spiral of staff layoffs, profit reductions and lost customers.
A well run and coached sales team is still the heart of a company engaged in high value, complex B2B sales, even in today’s internet-enabled and connected world. Make sure it stays healthy by providing the coaching and resources necessary to improve performance.