Most everyone has heard of, or experienced the 80/20 rule—80% of the sales come from 20% of the salespeople. For businesses with 5 or more salespeople, it is very common to discover that the top producer generates 3 or 4 times the production of the bottom producer, and it’s pretty obvious that it would be desirable to have more top producers! For businesses with only 1 or 2 salespeople, it’s even more critical that these positions be filled with top producers.

While few experienced sales managers doubt the “rule”, equally few know what causes it, or how to fix it. A study begun in 1997 and finished in 1999, then re-validated in 2000 and 2001, attempted to explain this phenomenon, and came to some interesting conclusions. The study’s sample included over 25,000 working salespeople in 160 industries, making it one of the most comprehensive ever attempted in this field.

Conclusion 1: 55% of all working salespeople are not well-suited for sales at all. The process by which most working salespeople end up in those positions is rarely one of choice, seldom includes very much training, and often cannot be explained in any rational fashion, even by the salesperson involved! Our educational system has no well-established path for helping a young person identify sales as a desired career, choosing education to insure success, and graduating into a career in the field. While we can agree that sales is critical to any business success, and recognize that successful salespeople are among the economy’s best compensated and most flexible, we sort of assume that success in sales “just happens.”

Conclusion 2: Of the remaining 45%, over half are selling the wrong thing in the wrong place for them. …which leaves the 20% or so that produce 80% of the sales. A salesperson who enjoys great success selling cars at a dealership in Boston will not necessarily find the same success selling boats in Houston, or furniture in Tucumcari. Actually, he or she may not find the same success selling the same brand of car at a different dealership in Boston! Sales success is highly dependent on conditions that vary with product, structure, management, peer group, customer demographics, and other variables we just do not have a good way to measure.

Thanks to John W. Howard, Ph.D. Performance Resources, Inc. for this item.

Share