4 Fascinating Sales Research Studies You Should Know By Heart
Keep reading to check out some of these sales research studies that will help you gain some insights into what makes a successful sales team.
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In this article:
Creating Sales Best Practices Based on Sales Data
- Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans
- Rethinking the Extraverted Ideal: The Ambivert Advantage
- Drivers Of Sales Performance: A Contemporary Meta-Analysis. Have Salespeople Become Knowledge Brokers?
- The Influence of Goal Orientation and Self-Regulation Tactics on Sales Performance
- Getting Sales Down to a Science With Sales Lead Research
Sales Analysis | Using Data to Help Teams Sell More and Sell Smarter
Creating Sales Best Practices Based on Sales Data
Want to know what makes a high-performing sales team? Science offers valuable insights for sales leaders at companies of all sizes.
Using data as a starting point, sales managers can create easy to use guides for sales best practices. Aside from that, they can also help their teams sell more and sell smarter.
Here are the key findings from four fascinating sales research papers, covering:
- Sales compensation and bonuses
- Personality traits of top performers
- Key performance indicators
- Performance goals vs. learning goals
1. Do Bonuses Enhance Sales Productivity? A Dynamic Structural Analysis of Bonus-Based Compensation Plans
You want to improve sales, and you want your team to crush it. At the same time, your team also wants to crush it, but only if they’re compensated appropriately.
But what sort of carrot should you dangle in front of your sales reps to bring out their inner sales superstar?
Do bonuses actually inspire salespeople to go above and beyond, or do they make no difference in the long run?
And is it better to offer smaller, quarterly bonuses, or one big bonus at the end of every year?
Business scientists from Yale and Harvard tackled this critical question in their Do Bonuses Enhance Sales Productivity? study.
What They Did
The researchers examined 348 salespeople at a Fortune 500 company from 1999 to 2001.
The company sells a wide range of equipment, from cheap machines purchased by small businesses to massively complex instruments that cost six figures.
They tracked the performance of each salesperson, then they compared that information against the compensation structure.
What They Discovered
The main discovery during their sales analysis was that the promise of a bonus does actually motivate salespeople and increase revenue. Specifically, when used with a compensation plan that included a base salary, commissions.
Additionally, there should also be bonuses for sales reps. These bonuses are the quarterly bonuses, annual bonuses, and overachievement bonuses that help create inspired salespeople.
In fact, it inspired them so much that they were able to raise revenue 17.9% over salespeople who were commission-only.
Additionally, the sales analysis report also found that quarterly bonuses are more effective than annual bonuses.
“In the absence of quarterly bonuses, failure in the early periods to meet targets cause agents to fall behind more often than in the presence of quarterly bonuses. Thus, the quarterly bonus serves as a valuable sub-goal that helps the sales force stay on track in achieving its overall goal; such incentives are especially valuable to low performers,” the paper explains.
They also uncovered a fascinating fact about the behavior of salespeople. When they’re far away from a quota, they tend to give up.
However, when they burst through a quota, they rarely stop there. Especially if your team is offered bonuses for overachievement.
Key Research Sales Takeaway
If you want your salespeople to reach for the stars, you’ll need to build a bonus structure to help launch them there. Preferably one that rewards them every quarter.
Although informal rewards are acceptable every once in a while, they aren’t a replacement for monetary rewards like bonuses.
Aside from that, your comp plan should include accelerators that encourage and reward overachievement.
2. Rethinking the Extraverted Ideal: The Ambivert Advantage
Everyone knows how salespeople appear in movies and in the imaginations of people who don’t talk to actual salespeople that often.
They’re slick hucksters with boundless confidence who can work a room with ease and persuade anyone to do anything. They’re, in a word, extroverts.
What is an extrovert? An extrovert is someone who takes energy from the presence of other people.
Basically, people believe that if you want to thrive as a sales professional, you have to be a bit of an extrovert.
But is that too simplistic?
A report published in the journal Psychological Science suggests so.
Despite a lot of research into the topic, no one has been able to find a strong correlation between high extroversion and sales performance.
Rethinking The Extraverted Ideal: The Ambivert Advantage proposes that the business world has been thinking about sales personalities the wrong way.
What They Did
The author of the study, Adam M. Grant, sent a personality questionnaire to outbound call center representatives. He examined the answers from the 340 employees who filled out the survey in full.
From the answers, the employees were assigned a level of extroversion on a scale of 1.0 to 7.0. In the scale, 1 will be the highest level of introversion, and 7 will be the highest level of extroversion.
What They Discovered
The introverts in this study earned an average hourly revenue of $120.10. The extroverts earned an average of $125.19 per hour.
However, the “ambiverts,” those who scored between 3.75 and 5.50 on the personality test, blew both groups out of the water. Data analysis shows that they were earning an average of $154.77.
Additionally, those who scored a “perfect” ambivert score of 4.0 earned an average of $208.34.
Grant observes that, while sales require socializing and assertiveness, it also requires the salesperson to consider the “needs, interests, and values of customers.”
In this case, ambiverts have the most advantage. This is because ambiverts have enough extroversion to seek out prospects and get their attention.
On the other hand, they have enough introversion to consider how their behavior and words affect others. This one-two combo makes them the ideal sales performer.
Key Sales and Market Research Takeaway
Stereotypes about salespeople may be all wrong. Trend analysis shows that star performers aren’t always the brashest, loudest people on the sales floor.
Sales data shows that they’re often people who love socializing but are reflective enough to sympathize with the needs of clients. Thus, a balance between extroversion and introversion are valuable traits for sales operations.
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3. Drivers Of Sales Performance: A Contemporary Meta-Analysis. Have Salespeople Become Knowledge Brokers?
What factors influence sales performance most of all? Is it a salesperson’s mindset, or is it their selling ability?
“Selling” is often categorized as a skill or a talent, but really it’s a collection of skills.
However, which selling-related skills are most vital for performance? Also, which skills are overrated?
In this sales trend analysis and report, you’ll find which set of skills matter the most.
What They Did
In Drivers Of Sales Performance, the researchers examined a broad swath of published research from 1982 to 2008. For the sales data analysis and report, they looked at the effect of around 20 performance indicators.
Then, they identified the performance indicators that actually have the most significant impact on sales success.
What They Discovered
Based on the analysis report, they found that five factors significantly correspond to sales performance.
1. Selling-Related Knowledge
According to sales analytics, having a set of knowledge of sales had the most significant impact. The researchers discovered that the relationship between sales performance and selling-related knowledge, when measured as a standardized coefficient, is .28.
Selling-related knowledge simply refers to a salesperson’s ability to size up a sales situation. Someone with a high amount of selling experience can answer critical questions.
For example: Who are the best prospects? Who are the real decision-makers?
What solutions are the prospects really looking for?
Having the answers to these questions makes a salesperson better at constructing strategy. This makes them better overall at selling.
2. Degree Of Adaptiveness
The relationship between the degree of adaptiveness and sales performance is .27.
Does the salesperson make the identical pitch every time? On the other hand, do they adapt their pitch to the prospect?
Salespeople who have displayed a high degree of adaptiveness were found to be more successful. The reason being that they show responsiveness towards each client that they deal with.
Adaptiveness makes an experience with a salesperson feel more personal. Thus, this may be contributing to their successes with their potential customer.
3. Role Ambiguity
Role ambiguity is a lack of clarity about your role. This was the only factor in the top five to show a negative correlation with sales performance. The significance was calculated at -.25.
When salespeople don’t know what they ought to do, they (understandably) perform much worse. After all, this significantly hinders their ability to adapt.
Aside from that, ambiguity isn’t directly related to selling-knowledge at all. Thus, the sales rep’s performance and sales strategy will suffer when they have role ambiguity.
4. Cognitive Aptitude
Cognitive aptitude is raw brainpower. How well can the salesperson think, use words, and understand numbers?
In this case, the significance here was measured at .23. This proved to be necessary, but not the most essential factor for successful salespeople.
5. Work Engagement
How enthusiastic and motivated is the salesperson? Not surprisingly, salespeople who threw themselves into their job performed much better.
Additionally, this factor was found to have an identical amount of significance as cognitive aptitude.
The researchers state that this model can account for 32% of the variance in sales performance.
The ideal salesperson understands the sales process inside and out, is flexible, knows exactly what is expected of them, is smart, and loves what they’re doing.
Data from the analysis has shown that knowledge is a potent tool in sales. Thus, you should try and research as much as possible about your target market.
4. The Influence of Goal Orientation and Self-Regulation Tactics on Sales Performance
No one knows the importance of goals better than salespeople. However, what kinds of sales goals really drive revenue?
The Influence of Goal Orientation and Self-Regulation Tactics on Sales Performance tested two kinds of goal orientations against each other.
The first is performance goals, or goals that achieve specific outcomes. These are outer goals.
People who value performance goals want to hit big numbers that impress their managers and colleagues.
The second is learning goals, or goals to achieve a certain level of skill or knowledge. These are inner goals.
What They Did
The study examined salespeople from a medical supplies distributor in the Southwest. During a quarterly meeting, the sales team completed a questionnaire that asked them about their goal orientation and self-regulation tactics.
The researchers then compared their answers to how the salespeople actually performed by the end of the quarter. They also tested how well the salespeople performed on three key self-regulation tactics: goal setting, effort, and planning.
What They Discovered
Surprisingly, a focus on performance goals was not positively related to sales performance and self-regulation.
However, those who focused on learning goals performed much better.
In other words, those who were dedicated to growing their talents outshined those who merely wanted to put up big numbers.
According to the abstract, “a focus on skill development, even for a veteran workforce, is likely to be associated with high performance.”
The learning goal orientation was positively related to the level of goal setting, with a standardized coefficient of .30. However, performance goal orientation was not, with a standardized coefficient of .11.
The metrics also show that people who valued learning goals also put in more effort.
Those with a performance orientation fared a little better when it came to territory and account planning. The researchers actually found that it had a positive relationship in these areas.
Territory planning had a standardized coefficient of .17, and for account planning, it was .20.
However, the relationship was much stronger between learning orientation and planning. The standardized coefficient for the relationship between learning and territory planning was calculated at .44.
On the other hand, for account planning, it is .37.
Why is this?
According to the researchers, “Individuals with performance goal orientations view a challenging task as a threat because there is the risk of failure that would demonstrate their inadequate ability.”
On the other hand, “Individuals with learning goal orientations … view a challenging task as an opportunity for growth and development.”
If you want your team to do their best, it’s not enough to give them ambitious quotas and praise their success. You should also provide training opportunities and give them opportunities to grow professionally and intellectually.
Your most valuable team members are the ones who are humble enough to know that they don’t know everything. However, they still need to be ambitious enough to stretch themselves at every opportunity.
If a team member relies too much on external recognition, it may stifle their ambitiousness. Fear of a challenge may deter them from taking on more complicated tasks.
Thus, they must be encouraged to reach their sales target because they want to grow and improve. Not just to get the recognition and praise of others.
Getting Sales Down to a Science With Sales Lead Research
Sales leaders usually draw from three sources to make decisions for their teams: their experience, their gut, and hard data.
The next time you’re unsure of how to guide your team, you can turn to the data in these four valuable sales research studies for answers.
After all, acting on a gut instinct may be okay sometimes. However, it might more productive and less risky to act based on sales strategies that have been proven by science and data to work.
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Which of the sales strategies mentioned in these studies will you use for your sales team? Let us know why and how you think this will impact your team’s performance in the comments section below.
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Editor’s Note: This post was originally published on October 26, 2015, and has been updated for quality and relevancy.
The post 4 Fascinating Sales Research Studies You Should Know By Heart appeared first on InsideSales.
- Xant Team