tech sales rep: it isn’t who - amazon s3...tech sales rep: it isn’t who you think it is...
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1McKinsey & Company
‘’’’’
The high performing Ed
Tech sales rep: it isn’t who
you think it is
Maximizing the potential of your
Sales DNA
March 28, 2017
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3McKinsey & Company
100%
Bottom
performers
Top
performers
What if you could
understand the
drivers of this
variance with
science?
Aggregated results across several sales forces
Top performers
typically
outperform bottom
performers by 3-4x
Variation in seller quota attainment
Does this look familiar?
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4McKinsey & Company
McKinsey surveyed
growth tech companies in
order to identify the
characteristics that define
the most successful sales
organizations
CCAT 35
commercial capabilities assessed
across price & contract management,
innovation & product management,
sales & account management and
sales support
44
growth tech
companies surveyed
Sales
DNA
72sales reps assessed on
attributes covering skills, intrinsics,
motivators, and cultural enablers511
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5McKinsey & Company
…Over half the companies we surveyed said
The majority of their sales
reps FAIL…
within the first 3 years
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6McKinsey & Company
Getting big in education typically requires large investments in a
salesforce
Annual
Revenues Description
▪ Traditional textbook publishers
▪ School operators/
education providers
▪ Digital platforms (LMS, SIS)
and hardware
▪ Tutoring/test prep/assessment
providers
▪ Established supplemental
materials/services providers
▪ New players gaining a foothold
or monetizing users
▪ New players with users not yet
monetized or just starting
$1 bn+
$250 mn-
1 bn
$50mn -
$250 mn
<$50
mn
Example Companies
Number of
players
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7McKinsey & Company
Ed tech companies also face particular sales challenges
Multiple decision makers Long sales cycle
ROI is harder to
demonstrate and measure
Interoperability Price sensitivity
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8McKinsey & Company
▪ Sales DNA assessment tool co-
developed with a professor at Notre
Dame
▪ Commercial Capability Assessment
Tool (CCAT) measures the commercial
capabilities of any sales organization
Taking a 360º view of what drives sales performance that
doesn’t impose a generic “best practice” on the sales force;
identifies key traits for unique sales models
We used proprietary McKinsey tools to assess individual sales rep and
companies’ commercial capabilities
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9McKinsey & Company
Find people
with the right
personality
traits
Build
skills
that
matter
Motivate
the right
way
Reinforce with
the right
commercial
capabilities
4321
Getting these
four dimensions
right can drive a
sustainable
5-20% lift in
revenue
We measured sales performance along four key dimensions
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10McKinsey & Company
Participating companies had an average of $35 million in funding and
$40 million in revenue
SOURCE: McKinsey survey to participating companies Head of Sales
Outside investment received to date, %
(Sum=100%)
Revenue last year,
% (Sum=100%)
13
21
17
29
21
Less than $15 M
$15 - $35 M
$250+ M
$35 - $60 M
$60 - $250 M
22
19
15
25
19
$20 - $40 M
$80 - $250 M
$10 - $20 M
$250+ M
$40 - $80 M
Financial demographics: Investment and revenue
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11McKinsey & CompanySOURCE: McKinsey Head of Sales survey to participating companies
50
33
50
Horizontal
Ed Tech
Vertical
33
31
26
10
0%
>25%
>10% to 25%
<10%
Percent reporting 50% or more of
their sales rep hires in the past 3
years were unsuccessful
% of segment
Thirty-six % of companies reported more
than 10% of successful sales reps left
within one year
% of participating companies (Sum=100%)
Participating companies have a real need to better attract and retain
high performing reps
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12McKinsey & CompanySOURCE: Sales DNA survey
Distinctive
Sales Rep
Persona
Is able to convert
smaller funnel by
convincing the
customer “I know
your business better
than you do” using
trust building,
strong objection
handling, and robust
problem solving
intellect
Excels at efficient
pipeline
management and
not wasting time
on less attractive
opportunities.
Can tailor value
props to specific
situations and
more internally
motivated
Demonstrates
traditional tenacious
sales rep skills.
Builds trust and
leverages experts,
is good at target
setting, motivated
by rewards, and
less empathetic
than less
successful reps
Selling
Model
Sell industry-specific
tools (e.g., retail store
analytic solutions) to
companies in one
sector
Sell function-based
solutions (e.g., HR
service solutions) to
companies across
multiple sectors
Sell B2B online
learning tools for K-12
and higher education
Horizontal focusVertical focus Ed Tech focus
What you sell and how matters: High performing reps have different
Sales DNAs depending on their selling focus
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13McKinsey & Company
Personality traits: Traits highlighted are those that differentiated high
performing reps from poor performersHigh
Significance of trait
Not SignificantMedium Negatively Significant
SOURCE: Commercial Diagnostic Suite – Sales DNA
Confidence
Stress
Management
Proactive
personality
Resilience
Humility
Curiosity
Extraversion
Openness
Diligence &
Achievement
Agreeableness
Empathy
Top performers are less
empathetic than the poor
performers
Sociable
Positive
Socially Attentive
Dominant
Assertive
Ambitious
Detail Oriented
Persistent
Dependable
Achievement oriented
Dutiful
Planners
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14McKinsey & Company
SKILLS
Skills: Skills highlighted are those that differentiated high performing
reps from poor performersHigh
Significance of trait
Not SignificantMedium Negatively Significant
SOURCE: Commercial Diagnostic Suite – Sales DNA
Understanding
customer needs
Value Proposition
delivery
Negotiation and
closing
Product
Knowledge
Pipeline
managementRelationship and
network building
Prospecting
+Resource
management
Account Planning
Presence and rapport
Network and maintenance
Trust building
New introductions
Review and follow up
Contact strategy
Target setting and potential
Sales strategy
Prioritization
Time
Identification
Cold calling
Use of experts & support
Use of tools
Time management
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15McKinsey & Company
SKILLS
SOURCE: Commercial Diagnostic Suite – Sales DNA
Skills: Skills highlighted are those that differentiated high performing
reps from poor performers con’tHigh
Significance of trait
Not SignificantMedium Negatively Significant
Relationship and
network building
Prospecting
Resource
management
Account Planning
Match offering to need
Knowledge of customer
Probing
Listening
Value prop creation
Presentation skills
Style and impact
Competitive knowledge
Cross and upsell
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16McKinsey & Company
Motivators: Top Ed Tech reps are more motivated by financial rewards
and find great satisfaction in selling
MOTIVATORS
High
Significance of trait
Not SignificantMedium Negatively Significant
Belonging
Goal Setting
Drive and Will
Growth
Meaning and
Purpose in my role
Financial
rewards
Autonomy
Competency
Non-financial
recognition
Top
performers are
significantly
more
motivated by
financial
rewards than
their weaker
performing
peers
Top
performers
love being
sales reps
and their
weaker
performing
counterparts
do not
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17McKinsey & Company
Cultural perception: Top Ed Tech reps feel like their companies are
more entrepreneurial but aren’t as performance oriented
Performance
Management
Supportive
Environment
Entrepreneurial
Leadership
(support of me)
Direction of
company
Customer Service
orientation
Top performers feel like their
companies are more entrepreneurial
Top performers believe their
leadership supports their development
Weakest performers perceive a much
more supportive environment and
performance management orientation
relative to top performers. This may
not be a good thing.
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18McKinsey & Company
Summary: Distinctive characteristics of high performing ed tech reps
SalesDNA
MotivatorsSkillsPersonality traits
Extraversion Positive
(dogged)
Not as
empathetic
Diligent &
Achievement
oriented
Ambitious
Confident
Detail
Orientation
Persistent
Planners
Network and
maintenance
Target setting and
potential
Identification
Use of experts &
support
Knowledge of
customer
Trust
Sales strategy
Time management
Probing
Can cross and
upsell
Meaning/PurposeRewards
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19McKinsey & Company
So how do you find and develop this high performing sales rep?
Assess the right traits in
in interviews
Coach and train on the skills
that matter
Align rewards and culture
to what motivates reps
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20McKinsey & Company
Ed Tech companies recruit for the wrong personality traits
SOURCE: Head of Sales Survey
No Yes
Yes
No
Assessed in recruiting?
Significant
trait?
Sought out in recruiting,
but top reps don’t have!
ExtraversionDiligence &
Achievement
Confidence
Positivity Ambition Detail
Orientation
Persistence Planfulness
EmpathyCuriosity
Openness Agreeable-
ness
Stress Man-
agement
Proactive
persona-
lity
Resilience
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21McKinsey & Company
Ed Tech Companies should screen for critical traits by using interview
guides and personality tests
SOURCE: McKinsey Sales DNA
Do you use an interview
guide?
Do you use a
personality test?
13
25
38
25
32 54
63
37
100
YesNo
How many interviews
does a candidate
typically go through?
Recruiting: Interview process, % of archetype (Sum=100%)
No Yes
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22McKinsey & Company
Coaching is significantly underutilized in developing critical skills
Not
Relationship or network building
Prospecting
Resource management
Understanding customer needs
Product knowledge
Value proposition delivery
. . . but most don’t receive
coaching in any other skills
Negotiation and closing
>70% of reps stated they
receive coaching in:
Pipeline management
Account planning
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23McKinsey & Company
Ed Tech can likely materially improve the candidates they attract
if they put more compensation at risk
SOURCE: Sales DNA
HorizontalEd TechVertical
22
20
6230
79
2011
30
8
80
5
05
0
Ed Tech HorizontalVertical
>80% <20%60% to 80% 20% to 40%40% to 60%
Retention: Variable sales rep compensation, % of segment (Sum=100%)
1 in 2 of Ed Tech companies put
less than 40% of comp at risk
Sales rep compensation
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24McKinsey & Company
Ed Tech commercial capabilities also need improvement
▪ Pricing & Contract management
– Value pricing
– Pricing strategy
▪ Tactical marketing
▪ Performance management
– Metrics, KPIs, target setting
▪ Talent management
– Capability development and
learning
– Talent review approach
Weaknesses
▪ Strategic marketing
– Customer segmentation
– Value proposition
development
▪ Go-to-Market design
▪ Digital marketing
▪ Innovation & Performance
management
– Product launches
– Product Service positioning
Strengths
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25McKinsey & Company
Major takeaways for Ed Tech
▪ Hire great sales people even if they don’t have experience in Ed Tech
– Focus on persistent, diligent and extroverted reps who may rub you
the wrong way because they are less empathetic and hard drivers
– Who have demonstrated traditional sales skills – ability to build robust
networks, develop specific target and sales strategies, and who
leverage experts
▪ Improve your interviewing, training, and compensation practices
– Increase variable portion of compensation and don’t have a cap
– Increase coaching on the key skills that top reps have
– Provide subject matter experts for support
▪ Strengthen key commercial capabilities:
– Improve tactical marketing to drive more leads
– Increase pricing capabilities across the board – strategic price setting,
contract management, and tactical pricing decisionsCommercial
capabilities
Hiring
Supporting
processes
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26McKinsey & Company
Invitation!Join the next cohort of
McKinsey Ed Tech sales
assessment this Spring!