The equation is simple: coaching your people equals increase in profits. Set your sales representatives up for success with this fundamental principle and end up with powerful sales teams.

I will start with a simple statement prepared for a Harvard Business Review Executive Briefing (from the original business study on “Executive Coaching as a Transfer of Training Tool”): “On average, teams that report receiving three hours of coaching per month exceed their goals by 7 percent.” Although the article is about coaching executives rather than sales, I believe the same rules apply.

Here is a simple example: Ten sales representatives with a current sales goal of $5,000 monthly (or $60,000 annually) will need a coaching budget of $1,500 per month for your team to achieve 7 percent annual increase of sales.

  • Coaching Year 1: In this case, the individual rep would experience a growth of $350 per month or $3,500 for all 10. Annual income per rep is now $64,200. That would be $642,000 for the sales team. Net increase after coaching budget is still $24,000.
  • Coaching Year 2: Based on last year’s revenue of $642,000 and a 7 percent increase, year two annual profit would be $686,940 or $68,940 net revenue after the budget for sales coach.

As you can see from the example, the growth continues. As growth continues, retention increases and your workforce are happier! So, what are the necessary steps for your sales team?

Based on this model, it should be a three-step plan that begins with the hiring process. The performance equation model is simple and easy-to-understand, as well as to implement.

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Competency X Attitude X Skills = Sales Success

Keep these three components in mind when developing a sales coaching culture.

  • Competency is comprised of two types of talent: inherent and trainable. Inherent talent is individual intelligence, common sense, and personality. Trainable talents are those you can teach or coach, such as computer, presentation, time-management, and sales skills. There are competency-based assessments that you can use to identify the natural and trainable talents, as well as behavior-based interview questions. You do not hire based on the personality of the professional representative, because you know it takes more than charm to make it for the long haul in sales.

  • Attitude and effort are habits that a person needs to perform effectively. In other words, they may have the talent, but will they do what it takes to be successful in the role. Consistent effort is a quantitative measure while attitude can affect the quality of the effort.

  • Skills and training are how the individual fits the job or sales opportunity. This is about ensuring your representatives are brilliant at the fundamentals. You sure would not find a professional ball player saying, “Hey coach, I had a great year last year, so I am not going to spring training.” Give your people the professional sales skills they need to be successful and be sure your managers can coach to those skills. If your manager is good at managing but not effective at coaching, you can burn out good talent or watch them soar with someone else later. Give your manager coaching skills or hire a professional sales coach.

Hopefully, this post will help you recognize the value of sales coaching. Do your own numbers and calculate your potential return-on-investment. You will not be let down by hiring right, and then coaching for success.  

Happy selling!