Beating the 80/20 Rule to Improve Remote Sales Performance

 

Most sales professionals know and understand the 80/20 rule, often referred to as the Pareto principle or the law of the vital few. So too do their managers, at least the good ones. Simply stated, this rule states that roughly 80% of the effects come from 20% of the causes. In the world of sales, 80 percent of a team’s success comes from a select group of higher performers – and that group will typically be about 20 percent of the team. The percentages may vary to 70/30 or even 60/40, but there will always be a disproportionate amount of success when working to improve remote sales performance, which comes from a disproportionately smaller subset of the population.

The question then becomes “What can you do about this rule?” Can it be overcome? If everyone is aware of it, why can’t it be overcome? The math is straightforward. If you can double the 20% who are your high performers to then become 40% of your team, then theoretically, overall quota attainment and sales performance would double too. Coaching 20% of your team to become leaders could double overall sales performance. Seems like a worthy goal.

First, let’s take a closer look at what is going on with the 80/20 rule and how widespread it is. It turns out, the rule has many applications in the world of business. Here are a few:

 

  • 80% of problems can be attributed to 20% of causes
  • 80% of a company's profits come from 20% of its customers
  • 80% of a company's complaints come from 20% of its customers
  • 80% of a company's profits come from 20% of the time its staff spent
  • 80% of a company's revenue comes from 20% of its products
  • 80% of a company's sales are made by 20% of its sales staff

 

Given the preponderance of the rule, one might conclude that it is at a level equal to the law of gravity. While I am not aware of the specific details on how to prove it really does work – let’s assume it does. What can be done to best take advantage of it?

 

Applying the 80/20 Rule to Remote Sales Performance

Sales professionals will typically approach new clients in different ways, with various offerings. These approaches will then have varying rates of success. Inevitability, one approach will work better than others, leading to a high performer. This is most obvious in a new market or startup environment where much experimenting is performed trying to learn what strategies work best to improve sales performance.

Over time, the high performers will continue to master their technique, putting further distance between their performance and quota attainment and everyone else’s. The challenge is that these sales professionals are not usually eager to share their success, at least not initially. And, many work remote, so monitoring their sales performance can be difficult. To start, they likely don’t know if they are “on” to something, or not. So, who wants to tout they have found the right strategy before they really know it is true? Secondly, the world of sales is competitive – there are always winners and losers. Keeping a few “cards” up your sleeve that will help you do better than the team is a smart strategy to ensure consistent quota over-achievement.

Hence, the seeds of the 80/20 rule are planted.

 

Changing the Status Quo

Here is where remote monitoring can lead to sales improvement. By automatically collecting sales activity data, managers can then convert it into insight into what’s working and what isn’t, and then share these results with the rest of the team to help broaden the overall group’s success. There are now several software solutions that allow you to do this seamlessly.

If just an additional 5% of the team can be converted from “average” performers to “high” performers, that could be the difference that changes your team from being average to being exceptional, which are numbers you can take to the bank.