July 11, 2013

If you have been in and around sales for a long time you have probably heard reference to the “80/20 Rule.”  The 80/20 rule states that in any given sales group, 20% of the “stars” produce 80% of the revenues, so expecting a better distribution than that is probably impractical.

But, actually the 80/20 rule is more of a convenient urban myth than a useful analytic tool, and it can actually be counterproductive when used to replace real metrics when hiring and managing salespeople.

So here is some data  . . . some bad news first then followed by some very good news . . . that we hope you will find useful to your strategy. 

In the general population, less than 20% have the innate personality characteristics necessary to be developed into successful salespeople.  20% is not too bad, except that not all the people who have the aptitude to sell go into sales . . . some become coaches or politicians or lawyers or whatever.  So let’s say that takes the percentage down to 15%.  Sorry, but you cannot stop yet. Because of the 15%, who apply for sales jobs, not all of them have what it takes to sell your product or service.

For example a person without tech aptitude should probably not be selling sophisticated software systems. And a person who is not mathematically inclined should probably stay away from financial services. The toughest combination we find is usually in the engineering arena . . . it’s really hard to find a person who can talk technical details with a buying engineer who also has the ingredients we look for in sales.

So in reality, when a candidate walks in your door, the chances are probably less than one in ten that they have all the right stuff for you to justify the $100,000 or more in training, management and mentoring, you are thinking about spending on them, in hopes of a positive return on investment.

Those are bad odds . . . lousy odds . . . no wonder hiring managers struggle with selecting real producers.  But therein lays the HUGE opportunity.

With the right diagnostics, testing and interviewing, you really can weed out the pretenders and stock your team with high potential sales athletes. It takes time and patience but the end result can be blowing right through the proverbial 80/20 rule and leaving your competitors to use it as their excuse, as you leave them in your dust.