'Know Thy Customer'
The Key to Being a Successful Salesperson is Deceptively Simple
By Jason Jordan
"What makes a salesperson successful?"
This simple-but-vexing question has been asked millions of times by thousands of sales leaders for more than a hundred years. Millions of salespeople also ponder this question as they search for ways to boost their own performance.
So after all of our prolonged questioning, what do we collectively believe is the most probable answer? Motivation? Selling skills? Personality traits? Innate abilities? Experience? All of the above?
Actually, none of the above, according to three leading researchers into the field of salesperson performance. In fact, all of those traits in sum account for less than 17 percent of a salesperson's success.
According to a paper recently published by Arun Sharma from the University of Miami, Michael Levy from Babson College, and Heiner Evanschitzky from the University of Muenster, the real reason why salespeople succeed is deceptively simple…yet it accounts for a whopping 50% of the variation in salesperson performance.
What is it, then, that actually does make a salesperson successful? Answer: The very best outperform the rest because they truly and deeply understand their customers.
What the Best Salespeople Know
To reach this insight, Sharma, Levy, and Evanschitzky surveyed 225 salespeople in 2006, asking them a series of questions about their customers. First, the salespeople were asked to describe the types of customers with whom they interacted. They were then asked to describe in detail the characteristics of the customers they most and least often encountered. Finally, they were asked about the specific sales strategies they used with each customer type.
When correlated with the salespeople's actual performance, the differences in their knowledge of their customers emerged as the primary characteristic of superior sales performance. More specifically, the researchers uncovered five key areas where the best salespeople excelled.
First, the top salespeople were able to provide much richer descriptions of each type of customer. They gave better identifying characteristics, provided more detailed information, and had a better understanding of each customer's unique needs. Basically, the best salespeople knew more about their customers than their lower-performing colleagues.
Second, the better salespeople tended to categorize their customers based on the latter's buying needs, rather than categorizing them with more superficial identifiers like the customer's appearance or demographics. So in addition to their ability to more fully describe their customers, the best salespeople also gave descriptions largely derived from their customer's perspective—not their own. The best salespeople did not just know more about their customers, they knew them better.
Third, the more effective salespeople were better at "abstraction" than their lower-performing peers. That is, they were able to look at several different customer interactions, identify common behaviors or traits, and apply those observations to similar types of customers. The less effective salespeople tended to live within each distinct interaction, not noting the larger patterns that helped the top sellers better understand their customers.
Fourth, the top salespeople had a greater number of discrete selling steps in their own sales processes. Where a low performer may have executed only a few selling tasks during each sale, the high performers saw the need for many more activities to successfully close the deal. One can infer the extra selling steps were in response to the actual buying needs of their customers. Because they put forth a better selling effort, more prospects chose to buy.
Finally, and perhaps most disturbingly, the best salespeople had abandoned a greater amount of their previous sales training than their less successful peers. They had developed their own approaches to selling more closely aligned with their customers' needs. In contrast, the less successful salespeople were dutifully doing more of what they had been instructed to do, but they were getting less in return. The best sellers were not only attentive, but also adaptive.
In the end, the best salespeople were simply more responsive to their customers' needs. They knew more about them, their knowledge was more relevant, and they tailored their approaches accordingly. It is no surprise that they outperformed their peers who knew less, were more superficial, and used a one-size-fits-all approach. The real question then is no longer "What makes a salesperson successful?" The new real question is, "How do we make a salesperson more knowledgeable about their customers?"
What Sales Leaders Can Do
The implications of this research for sales managers are somewhat obvious, but extremely meaningful nonetheless. As Sharma, Levy, and Evanschitzky point out in their paper, the training agenda for most sales forces needs to be fundamentally reconsidered. Training designed to build product knowledge, technical expertise, and process compliance needs to be replaced—or at least supplemented—with training meant to develop the sales force's understanding of different types of customers. This training could potentially take two forms, which are not mutually exclusive.
First, the training could be built around a company's existing marketing strategy, if it is well developed and trusted. This would involve teaching salespeople about the company's target customer segments, their unique business needs, their buying processes, the buying process participants, and the relevant value propositions.
A second and perhaps more valuable approach would be to teach salespeople how to identify different customer types and their associated buying needs. This would involve training salespeople to identify and integrate customer information for themselves as they encounter it in the field. Either approach would serve the purpose of focusing the salespeople's attention on the differences between customers, and the importance of understanding and attending to their needs.
A final implication of this research is the imperative to improve the hiring process. Rather than structuring selection activities to validate past performance or ensure traditional sales competencies, the selection process should be designed to uncover a candidate's proclivity to categorize and characterize their current customers across the dimensions discussed above. Whether or not the candidate's current customers and yours are exactly the same, you can assess their ability and propensity to identify and understand customer types.
In many ways, this research confirms what was already known: Salespeople must understand their customers in order to excel. But the research is priceless because 1. it reveals the magnitude of the impact customer knowledge has on performance; 2. it puts a fine point on the knowledge needed to succeed; and 3. it provides practical guidance for sales leaders to transform their sales forces.
All that's left now is for sales professionals to bring this research to life.
Jason Jordan is the director of research for the University Sales Education Foundation, and a principal with Go To Market Partners.