Another quarter went by and you didn’t make plan. For many sales representatives this is not unusual. CSO Insights reported in 2012 that only 63% of sales representatives made quota for the year.1 If you are consistently missing your sales quota it’s not unnatural for a sales professional to wonder if they are on the bubble and about to get placed on a performance improvement plan (PIP). Here are some warning signs:
- Actual Sales Results Versus Quota – It’s pure and simple; sales professionals are paid to sell. Everyone gets a quota and management expects them to achieve it. In most organizations if you are below 80% of plan you are on the radar screen and being watched. If you’re at 70% or below you’re getting more attention than you want. Get your numbers up or expect a PIP.
- Overall Sales Ranking – Sales VPs often look at their teams in groups: some use the top third, middle third and bottom third. Others are more granular and look at the top 5%, the next 15%, the front-end 20%, the back end 20%, then 15% and 5%. If you are in the bottom 20% (15% + 5%) it’s not a good sign and a PIP may be imminent. If you’re in the back-end 20% you’re being watched carefully. Get your numbers up and avoid the PIP.
- Excessive Discounting– Sure you made your sales quota but you did so by excessive discounting and not by selling value. It doesn’t take a sales professional to make plan that way. If the gross margin of your sales are well below the company average then this is another strike against you and it places you closer to the bubble and a PIP.
- Product Mix – It’s not unusual for a sales representative to sell the products that they are comfortable with selling. If, however, you have been asked to sell a product mix (generally because it affects company profitability in a favorable manner) then you need to do so. Keep in mind that sales operations is tracking everything these days. They will report where you’re standing relative to your peers for product mix. You want to be in the top tier for outstanding performance or the middle tier for average or expected performance. You don’t want to be in tier three; this is the caboose and it means you are trailing everyone else. Expect unwanted attention if you are here.
- Revenue Trend Versus Plan– What has been your revenue trend versus plan year over year? Have you been consistently good, average or below average? Anyone can have one bad year but if there is a negative pattern in year two or three then it doesn’t bode well for you. Expect a PIP.
- Outside Your Control – Let’s face it sometimes there are factors outside of your control. We have all seen managers that use their sales representatives as scapegoats by giving them unrealistic sales quotas or no mentoring or coaching; oftentimes because they don’t like you. Regardless of the precipitating factor(s), it’s your sales goal so own it. Either figure out a way to make the number or look for another job before you are placed on a PIP.
- Not a Team Player– Are you a lone wolf that doesn’t think they need coaching for improved performance?Do you resist any change that the company initiates? Are you one of the last ones to complete an assignment? In other words do you stand out in a negative manner instead of a positive one? If you do, you could be on the bubble and not even know it, especially if one or more of these other previously mentioned factors are present.
- No Coaching– If your sales results are in the bottom 20% of the sales force it’s not uncommon for a sales manager to have given up on you. In well managed sales organizations they place you on a PIP. In poorly run sales organizations they no longer work with you and they don’t mentor and coach you. By doing so they hope that you read the sure fire signs of disinterest in you and hope that you quit.
Are their exceptions to these situations? Absolutely. If you are a new sales representative to the company you are given time to ramp up in most organizations. Also, if you inherited a territory that needs a complete turn-around, management will be more tolerant. It’s important that you learn to watch for the signs that you could be on the bubble so that you can take actions to mitigate the situation. Complacency breeds mediocrity and that is not conducive to long-term employment.
- CSO Insights 2013 Sales Performance Optimization Study-Key Trends Analysis