This article is an excerpt from the Shortform summary of "The Challenger Sale" by Matthew Dixon and Brent Adamson. Shortform has the world's best summaries of books you should be reading.
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What is a performance gap definition in sales? As a manager, are there steps you can take to close a performance gap?
A performance gap in sales is when there’s a notable difference between the performance of different sales reps. Sales managers looking for ways to close this performance gap should consider adopting the challenger sales method.
The Performance Gap
These trends have made solution selling difficult for the average rep, and thus have significantly affected individual rep performance. A study comparing the impact of transactional selling versus solution selling on the performance of sales reps found:
- In transactional selling, the performance gap definition is the gap between average and top performers is 59%, meaning a top performer sells about one-and-a-half times as much as the average, or core, performer.
- In solution selling, the gap is almost four times greater—star performers outperform average or core performers by almost 200%
As sales complexity increases, the gap between average and standout performers grows significantly.
This leads to three conclusions:
1) Organizations selling solutions must validate their stars—these reps are carrying the ball for the company. In fact, a side effect of solution selling has been the increased dependency of many companies on a few key people.
2) As sales complexity increases, the value to companies of narrowing the performance gap by increasing the performance of core reps increases significantly. In transactional selling, you get a 30% improvement by moving a rep halfway from average to excellent; in a solutions environment, you get 100% improvement.
3) Closing the performance gap pays off more than it used to; by the same token, not closing it costs more. Without help in navigating a world of more demanding, risk-averse customers, average reps will keep falling behind until they can’t execute solution selling at all.
However, CEB researchers have identified the unique skills and behaviors developed and practiced by standout performers, and they’ve created a template all sales organizations and reps can follow.
Challengers Do Better
Managers often assume a sales performance gap is inevitable because some people are born with natural sales talent and some aren’t; talent isn’t something you can replicate. But the authors’ research shows that while some reps are more talented than others, companies can help most core reps perform at a much higher level.
Researchers studied the differences between average and top sales reps and identified the skills, behaviors, knowledge, and attitudes most critical to strong performance. The purpose wasn’t to determine why top performers excel, as much as to determine how to make the middle 60% of a sales force—the core—better.
They surveyed hundreds of sales managers in 90 companies around the world. Initially, they analyzed data on 700 reps, then increased the sample to more than 6,000 reps. The data produced a clear picture of what skills and behaviors are required for success in a solution selling environment. (The researchers didn’t address personality types or personal strengths.)
There were three high-level findings, each contradicting conventional wisdom about sales success.
Finding 1: There are Five Types of Sales Reps
Researchers determined that sales reps fit one of five profiles, each dominated by distinct skills and behaviors. Considering these sales rep types as a part of the performance gap definition can help you understand the gap and learn how to close it.
- Hard Worker (21% of the sample)
- Relationship Builder (21%)
- Lone Wolf (18%)
- Reactive Problem-Solver (14%)
- Challenger (27%)
Every rep in the study had at least a baseline level of the 44 attributes tested. But nearly every rep also had a specific cluster of attributes that defined their sales approach (akin to having a major in college but also completing a core curriculum).
Finding 2: A Big Winner and a Big Loser
Each type has strengths, but when you compare sales performance, the Challenger outdistances the rest and the Relationship Builder falls way behind. This goes against conventional wisdom—most sales leaders depend most heavily on the Relationship Builder, the profile least likely to be a top performer.
Core performers don’t share a dominant profile—they’re distributed fairly evenly across all five profiles. Thus, there are five ways to be average, or you could say that mediocrity has five flavors. However, it’s different with standout performers. There’s one dominant way to be a star—be a Challenger. Nearly 40% of all high performers in the study were Challengers.
Finding 3: Challengers Excel at Solution Selling
Researchers found that Challengers are very likely to succeed in complex sales, while Relationship Builders are the least likely to succeed. In complex sales, more than half of all top performers are Challengers, while almost none are Relationship Builders.
The reason Challengers do well in complex or solution selling is that it’s a disruptive sales model, requiring customers to think and act in a different way—for instance, to think of value as encompassing more than just price. A sales rep needs the ability to push or challenge customers to rethink how they run their business—a key Challenger skill.
(Note that while Challengers are critical to solution selling, they aren’t required in all aspects of sales operations. For instance, Hard Workers do well in transactional functions—for instance, as inside sales or telesales reps—where success depends on call volume rather than call quality. In these positions, it isn’t necessary to invest in Challenger reps.)
Sales managers who aren’t building or hiring Challenger reps will fall behind as deals get more complex.
Closing a performance gap is a challenge for managers. Focus on building a challenger selling team that will drive results in order to close the performance gap, and achieve consistent sales.
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- Why the best salespeople take control of the sale and challenge the customer's thinking
- How to package your company with a key insight to spark an "a-ha" moment
- How to get the organizational support you need to maintain your sales edge
