Have You Thought of Using ‘Participation’ As Your Sales Metric?

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Apr 28, 2015

Ongoing management — low performers, mid-level performers and even high performers need it. It does not assume high performance, and once high performing, does not assume it will always continue. Everyone needs to be managed on a consistent basis. In sales, the goal of ongoing management is participation rate.

Whether your agency has a separate sales team or every recruiter is dialing for clients, a critical metric is participation rate. Participation rate is the percentage of team members who are at or above plan. For a sales team, participation rate is easy to calculate. On a team of 10 people where four are above their sales plan on a YTD basis, the participation rate is 40%. 

Measuring Participation Rate?

Call volume, presentations, job orders written, these are among the usual measures of sales efforts for a recruiting agency. Participation rate, however, is a statistic rarely scrutinized. Why? Sales managers are measured for making their quota. If the quota is $10 million, the manager’s goal is to get each sales person to deliver an average of $1 million. Some will produce $500,000; others will produce $1.5 million; the sales manager only needs the total to add up to $10 million.

The sales manager is incentivized to keep average performers. A sales person who only delivers 50% of their quota is better for the sales manager than the 0% they would contribute if they were let go.

Research reveals that a participation rate of 60% or less will give sales managers a 10% chance of making their revenue plan. Sales managers must aim for a high participation rate – at least 70% — to have a good chance of making plan, although it is not guaranteed.

The Strategy of Hope

Given this, why do sales managers tolerate poor performance? What stops them from having tough conversations? Sales managers are nice. They do not want to rock the boat. Their strategy is hope.

A recruiter’s sales performance can be evaluated on two criteria – behavior and results. Complicating matters is that there are two sides to a recruiting success equation. Acquiring clients and getting job orders is the one side; the other is the number of sendouts, placements, and especially production. Winning a new client and writing a new job order is the goal for a sales team; it’s up to recruiters to fill the JO.

In agencies where the work is divided, assessing whether a sales rep is or could be delivering results is fairly straightforward – it’s a math problem. When recruiters make the calls, pitch the services, get the JO and then are goaled on placements and revenue, assessing performance involves a balance. This is the more common organizational structure for all but the largest agencies, those with 25 or more recruiters. Just because the balancing is trickier, and, as most owners and manager will admit, it’s all about the production, that’s not a reason to ignore the participation rate. Acquiring new clients and writing job orders are critical to growth. Monitoring the participation rate can tell you much about the performance of each of your cold callers.

The 4 Performer Categories

There are four performer categories a sales manager works with:

  1. High Performers = Deliver results + behave correctly
  2. Coachable Performers = Behave correctly but results are not 100% yet
  3. Tough Performers = Deliver results + behave poorly
  4. Poor Performers = Poor results + poor behaviors

In an ideal world, a sales manager would have 100% High Performers. Neat concept; most likely not going to happen. What is the next best thing? One hundred percent High Performers and Coachable Performers. This is attainable but it’s not the norm.

Most leaders will have some Tough Performers and some Poor Performers. Imagine having 10 direct reports with two in these groups. Not bad, manageable. Now imagine four out of 10. Life is tougher and tough moments happen on a daily basis. At six out of 10, it is probably tough to get out of bed in the morning.

Five Steps of Ongoing Management

Ongoing management of performers involves monthly (minimum) one-on-ones, observational coaching with feedback, sit downs to try and help – all the day-to-day routines to try to lift behavior and results. When these fail to work, that’s when it’s time for the performance conversation, which has five key steps:

  1. Set a clear standard and set milestones of performance for the direct report.
  2. Inform the direct report where they are not meeting the standard and set milestones.
  3. Give the direct report the opportunity to meet the standard and set milestones.
  4. Offer assistance to meet the standard and set milestones.
  5. Advise the direct report of the consequences of not meeting the standard and set milestones.

Sales managers and owners know how to do this – the issue is getting up the nerve. Owners need to have the conversation as soon as they become aware of the problem – putting it off spares no one. Sales reps who want to be with you will step it up and improve. Those who are not capable/not interested will show very quickly (weeks not months) after the performance conversation. If things still don’t improve, the sales manager can move to the final warning, and dismissal.

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