- February 14, 2025
- Posted by: Dave Kurlan
- Category: Understanding the Sales Force
I read the majority of the reports, studies, white papers, and books related to sales development because others in the field might stumble onto a trend, an insight or a statistic of which I was not aware. That’s why I downloaded Xactly’s 2025 Sales Compensation Survey.
I was hoping to see statistics about actual compensation but there wasn’t much substance in the area of compensation. However, I spotted some findings that you’ll be glad I shared and perhaps horrified to learn.
It’s important to point out the demographics of the study because context and perspective are needed for all of the findings:
- 31% of the respondents were companies generating $250MM – $1B in revenue
- 36% of the respondents were companies generating more than $1B in revenue
When large and enterprise companies represent two-thirds of the respondents it skews the information because for the most part, they do things differently from most companies and rarely do it better!
- the largest group of respondents were individual contributors at 25% followed by frontline sales managers at 19%.
That’s 44% of the respondents who typically don’t see things the same way as the C Suite (6%) or Senior Sales Leadership (2%).
With the demographics covered, we can get to the material that I found particularly interesting.
The report says, “87% reported that their sales teams were having difficulty meeting or exceeding quota.” That is so much worse than what has been reported in recent years when the numbers were closer to 55%-60%. This is problematic for more than the obvious reason. When salespeople aren’t hitting quotas, companies need to hire more salespeople, which increases the cost of recruiting, salaries and benefits, not to mention the costs associated with hiring additional sales managers that won’t coach up their salespeople. It also reinforces a culture of mediocrity because when not hitting quota is normal and expected, more people don’t hit quota because their jobs are clearly not in jeopardy.
The next finding explains the previous finding.
“53% of respondents said that factors, including inflation, market volatility, and sector growth, create a complex environment for sales teams to meet their quotas.” I’m hearing a lot of excuses, rationalizations, justifications in that statement.
Statistics from Objective Management Group (OMG) and the 2.5 million salespeople they have assessed show that 56% of salespeople make excuses and the two percentages, 53% and 56%, are almost the same number! Over the past 40 years I’ve found that excuse making is usually a cultural problem and until the company fixes that problem, and sales leaders no longer accept excuses of any kind, including rationalizations and justifications, sales training and coaching don’t improve performance. Responsibility is 1 of the 21 Sales Core Competencies that OMG measures. You can see the data, filter by industry, and see how your sales team compares at no cost by clicking here.
One interesting finding that I read was that “53% of respondents believe collaborative and team-based incentives is another trend.” I wonder if it’s a coincidence that it’s the same percentage as the percentage of excuse makers? Collaborative and team-based incentives might also contribute to why 87% of teams are not hitting quota. When a driven, committed, commission oriented producer is surrounded by a team of mediocre salespeople, collaborative and team-based compensation will demotivate that salesperson. In other words, if the producer’s hard work causes others to benefit without having to contribute, or the lack of success of others prevents the producer from receiving what they personally deserved, it fosters an environment of mediocrity.
The report said that, “73% of survey respondents indicated that they prioritize acquiring new business and customers.” In the same report it said that “35% of respondents said they struggle with lead generation, qualification, and converting prospects into customers.” So despite the fact that new business development is a priority for two-thirds of the companies, more than a third of the companies are failing to achieve that.
In my opinion, a plurality of sales organizations are lost, unsure of the correct path, and whichever path they do choose fails to get the desired results. If you feel the same way, we can help.
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