Why a Great Rep Can Close 9x More Than a Poor Rep, and Even 2.5x More Than a Good Rep

We’ve talked a lot on SaaStr about great sales professionals, on driving up Revenue Per Lead, on not capping sales comp systems, and on why you need to manage out your worst reps (because leads are precious).

What we haven’t done yet is put it all together in a simple, quantitative spreadsheet.  Let’s do that — it is eye-opening:

This is what happens in the real world.  A great rep often literally closes 9x more than a poor rep.  And even 2.5x+ that of a decent, mid-pack rep.  With the exact same number — and same quality — of leads.

But how?  How does this happen?  It’s several factors compounding:

  • First, the best reps close more seats / more revenue per deal.  They are better at mapping out business processes, at discovering how many seats, units, whatever there is to sell … and they just sell more.  Like clockwork. The great reps truly and quickly and effectively learn how much each prospect really can buy — and they get that much.  Without fear, and without ripping the customer off.
  • Second, the best reps generally discount less.  Not always, but usually.  The best reps get very confident in the value proposition.  And poor reps and even mediocre reps fall back on the only arrow in their quiver — A Discount!!  But discounting a product a prospect doesn’t really want doesn’t really work.  In fact, it can harm close rates.
  • Finally, the best reps close faster and close more They don’t mess around, or play games.  They know time is the enemy of deals.  They get very good at key objections.  The know the product and the pitch and the value prop cold.  They build strong relationships with prospects, and add enough value they can ask for a favor back — the sale.  They close better and faster.

These 3 factors together have a compounding effect, which is key.  You can still be a good rep and just be good at some of these 3 factors.   If you are great at all 3, then magic happens.

The top reps close larger deals than a mid-pack rep, discount just a bit less, and close faster … and the three factors together pull them far, far ahead of the pack.  For the same amount of effort (and often, even less total time).

This is also why you have to fire the poor reps fast.  You need to see if they can deliver.  But if they can’t, they don’t just miss quota.  They leave all the money in the spreadsheet above on the table.

Put differently, in the above scenario, the above Poor Rep left $160,000 on the table ($189,000-$20,790). In just one quarterRevenue that was there for the taking.  The leads were there.  Waiting to be sold to.

Route those leads to someone better, and magic will happen.  Fast.

Published on January 14, 2019

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