Good Salesman, Bad Salesman and Binomial Distribution

All of you know what good salesman looks like and I am sure you also know how bad salesman looks like. Bad salesman has laundry list of excuses ready for his poor performance…

  • I was not trained properly on products/services
  • Marketing literature, visiting cards, SIM card etc. not given on time.
  • Presales/technical guy did not come with me
  • Did not get enough support from X,Y & Z teams
  • I have been given tough accounts
  • Lack of resources, poor MIS which make me spend lot of time in filling up sales sheet, attendance, outdoor slip etc…

Depending on your organisational culture, such salesmen are either asked to go or put in performance improvement programme with hope that they will improve and manager will not be asked to do unpleasant task of firing poor performer.

During improvement program/counselling session it helps if you tell this person what organisation expectations are and what performance of good salesman looks like.

Binomial distribution is good way of comparing performance of poor, average and good salesman. You can get data of salesmen from your accounts/revenue assurance/ sales coordination department. This will help you to calculate success rate for each category- poor, average and good.

Presentation1

Now suppose they make 10 calls per day and success rates are 30%, 50% and 80% for poor, average and good category. Use excel sheet for calculating binomial distribution, calculations will clearly show difference in performance- for your stars probability of closing 7 or more calls is way higher than that for poor performers (who mostly succeeds in closing 1-4 calls).

Calls Star Solid Pro Deadwood
0 0% 0% 3%
1 0% 1% 12%
2 0% 4% 23%
3 0% 12% 27%
4 1% 21% 20%
5 3% 25% 10%
6 9% 21% 4%
7 20% 12% 1%
8 30% 4% 0%
9 27% 1% 0%
10 11% 0% 0%
Success rate 80% 50% 30%
Mean 8 5 3

If your poor performer has to match performance level of star performer he will have to improve his performance by 266%!

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