Drivers of Sales Performance

Drivers of sales performance:  Have salespeople become knowledge brokers?

Abstract:

This article reviews academic studies on the drivers of sales performance from the previous 25 years and compares and contrasts them with a landmark study done in 1985. It then identifies and categorizes 6 major influencing factors on sales performance with 18 sub factors and analyzes all with sophisticated statistical tools to propose the most influential drivers of sales performance.  The authors conjecture that “as the world is moving toward a knowledge intensive economy, salespeople could be functioning as knowledge brokers.”  This conclusion is well supported by the data and suggests a review of the talent management and support systems most companies operate to drive sales results.

Findings:

The authors found that both the bivariate and multivariate analysis yielded similar results. The five drivers of sales performance from a combination of the analysis are:

1)      Selling-related knowledge (.28)

2)      Degree of adaptiveness (.27)

3)       Role ambiguity (-.25)  Note that this is a negative driver.

4)      Cognitive aptitude (.23)  and

5)      Work engagement (.23).

The study showed that these drivers have an independent, predictive effect on sales and can be seen as generalizations that occur in the same fashion in a variety of circumstances.  These ranking differ slightly from the 1985 study.  By learning from the similarities and differences between the two studies, the authors note one prevalent theme: we are moving toward a knowledge-intensive economy.

As the pace of innovation increases, knowledge acquisition by the salesforce becomes more urgent and for many, more challenging.  In today’s economy, knowledge has become an endogenous part of the creation of value.  Customers are now better informed than ever before.  Sales people must communicate how their products and services solve both the explicit and latent problems of their customers. This transference of knowledge takes place in conversations with customers during which the salesperson leads the customer to learn to frame their own needs or issues in new ways, such that they can discover how solutions provided by salespeople might fit their needs or solve their issues.  Thus the increased innovation of the new knowledge economy requires updated  skills from those who interact directly with the customer; salespeople.

Discussion:

Selling-related Knowledge    This is not just limited to knowledge about the product/service being sold, but how this product/service solves specific customer’s specific problems. Salespeople must be able to point out the role of the customer in the household or organization making the purchase and they must also be able to understand where the product/service is in the market cycle. The most effective salespeople can master categorization to make the best use of the limited time available to them. This clearly shows how selling-related knowledge is highly correlated with cognitive aptitude (.41).  Salespeople who actually embrace the role of knowledge-broker can position themselves as thought leaders and network themselves with different people in a variety of industries and places like universities and knowledge centers in order continue sourcing information and maintain their role.  Selling-related knowledge can be trained as well as organized into the selling firm. To further enhance the knowledge within a selling firm, knowledge communication between colleagues in separate departments can also be encouraged.

Degree of Adaptiveness     The degree of adaptiveness is the salesperson’s ability to tailor their knowledge and behavior to fit the needs of the individual customer. This is the second highest correlated driver to performance of salespeople and it is also very stable in all the moderating conditions studied. According to the authors, the future of adaptive selling will likely experience some changes.  In a more knowledge-based economy, salespeople will have to learn how to explain why the product/service is needed but use cases from previous customers to explain how it helped them. Salespeople have to read the intentions of the customers but this ability is hard-wired into the brain. Some are better at it than others and the new research may help managers figure out to train people based on their abilities and possibly hire those who have more of this adaptive skill.

Role Ambiguity This is the most important negative driver of sales performance . Role ambiguity occurs when the employee is unclear of what is expected from him/her.  Managers will have to find, hire, and train those who have the ability to adapt to the growing ambiguity of a knowledge based economy. Various Leadership styles have been shown to be able to decrease ambiguity and help salespeople with their goals and aspirations. The authors call on researchers to further explore this topic and find ways that leaders can work with salespeople to make sense of the growing ambiguity in the sales environment.

Cognitive Aptitude  Is defined as the general IQ, mental and verbal ability, and quantitative analytical ability of the salesperson. It has a high correlation with sales performance and is becoming more and more important with the role evolution of the salesperson from traditional selling to knowledge brokering. Salespeople with higher cognitive aptitude are able to guide customer’s needs and explain how the product/service from the selling firm fills that need. Salespeople with higher cognitive abilities are more successful but firms should be sure to hire for this alongside abilities such as social skill.  Although cognitive ability has been under researched, the authors believe it will play a large part in the future and deserves to be studied in more detail. They propose that IQ should be studied in relation to selling-related knowledge.

Work Engagement This falls under the major category of motivation in the table. This sub-category was added to represent the new sales research that shows the positive affects of when salespeople put in more work. When a salesperson has a high level of work engagement, he/she is more enthusiastic, willing to work harder, and cares more about the firm as a whole – generally referred to as citizenship behaviors. These types of behaviors elicit more support from both colleagues and customers as shown in Homburg et al. (2002). Managers should encourage these types of employees to take more credit for their work and continue working proactively. Research on this topic is particularly sparse but future study can important to the field.

The 5 things you can do to differentiate your sales team to the knowledge economy:

1.  Use knowledge as a differentiator:   Are you hiring and training your sales team to be knowledge brokers?  Are you providing them the tools to fill this role?    For example do you keep them updated on latest trends in your market and those adjacent?  Do you provide them with content to share with customers to spur discussions that will lead to your differentiation?

2.  Hire and train and coach for adaptivity:   Innovation and change are the norm now. Can your teams adapt? What are doing to enhance their ability via training and coaching? Are you hiring and promoting based on this attribute?

3.  Reduce role ambiguity:   Ambiguity is an outgrowth of change, prepare for it and manage to it.  Adapt sales processes and organizational designs to simplify job roles. Adjust leadership styles to mitigate ambiguity. Stay on your toes and be prepared to change again.

4.  Hire for Cognitive Ability AND Social Skills.    Personality traits such as competitiveness, aggressiveness, extroversion and the like have been attributes sought in sales people for decades and they are still important. But temper those with cognitive ability. Your sales team will need to have substantive discussions with customers concerning complex issues. Make sure they have the smarts to lead such discussions.

5.  Hire and reward “good citizens”.  Enthusiastic team players who have strong work ethics are valued not only by their peers but their customers.  Encourage and reward these behaviors.  Team players, not lone wolves win in the knowledge economy.

To read the entire study:    Please email Stephen Young, at syoung41@gsu.edu  for a PDF copy of the full study.

 

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