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Business Journal
Sales Myths and Reality
Business Journal

Sales Myths and Reality

by Mick Zangari and Benson Smith

Over the past four decades, Gallup has done extensive research to understand what's different about the world's best performing sales reps compared to their more average counterparts. In the course of that work, we have interviewed more than 250,000 sales representatives, 25,000 sales managers and more than one million customers.

By "the world's best", we mean sales representatives who are consistently in the top 25% -- and often in the top 10% -- of their companies' sales force. We found that the very best performers frequently sell between four and 10 times as much as average performers. They produce significantly greater profitability. They tend to stay at their respective companies longer and develop more loyal relationships with their customers.

This last point -- customer loyalty -- became even more important as we researched the key factors linked to sustainable business growth. Customer loyalty, it turns out, is a much more important predictor of company growth than customer satisfaction. Satisfied customers will go elsewhere, but loyal customers tend to stick around. Therefore, developing customer loyalty is increasingly recognized as the most important foundation for ongoing business growth, and the sales force is an integral part of this process.

Additional Gallup research has demonstrated the importance the sales force plays in generating customer loyalty. While delivering a quality product or service is important, the sales force generates four times more customer loyalty than the product or service itself, and twice as much customer loyalty as advertising and marketing programs. The sales force (and other individuals with direct customer contact) is by far the most important variable in generating customer loyalty.

On average, the top 25% of a sales force generates nearly 60% of a company's actual sales increases. But, this very same group is also responsible for more than 90% of the customer loyalty that is being generated by the sales force.

In plain language, customer loyalty is the most critical variable in developing sustainable business growth. The sales force is the most important single factor in generating customer loyalty, and top sales producers are responsible for nearly all of this contribution.

Naturally, we wanted to understand what was different about these best-performing sales representatives. Our research included detailed analyses of the sales forces of 170 companies in 21 different industries. After hundreds of thousands of interviews, a compelling picture emerged. We were surprised by many of the conclusions. The data contradicts many frequently held notions about great sales performance. In fact, we found so many misconceptions and myths about sales that we think of them collectively as the "big lie."

Unfortunately, these myths and misconceptions have guided many companies' hiring practices and sales management policies. One result is that companies bring many people into their selling organizations who do not belong there. For example, one common myth is that "anyone can sell," as long as they have enough desire and the right training. The data flatly refutes this. Sales is not for everyone.

The companies we studied often represented the market leaders in their fields, and were all large, well-respected companies with careful selection and training procedures. Even so, we found considerable ranges in performance between salespeople in the top and bottom quartiles. While the top-quartile salespeople generated impressive results, those in the bottom quartile frequently lost business and actually eroded customer loyalty.

Even among the best companies, we found that about 35% of the sales force did not have the threshold talents necessary to succeed on a consistent basis. Consequently, this group is persistently at the bottom half of the performance curve. Yet many company policies are developed to manage poor producers and not to support great performers. These policies usually do little to help poor performers improve their results; instead, they often interfere with great performance, and sometimes even drive away the best producers. Imagine what that does to customer loyalty!

Clearly, selling organizations have no vested interest in perpetuating misconceptions. So why do the myths persist? Because buried within these myths are elements of the truth. Every misconception contains enough of the truth to make it logically believable.

For example, we all know some highly successful salespeople who are extremely competitive. So we might conclude that all great salespeople are competitive -- and many companies have done so. This conclusion seems logical, but when we look at the data, we find it is just not true. Yes, some great salespeople are competitive. Others are not competitive at all. And some very competitive people make rotten salespeople. They can't sell worth a darn. Simply being competitive is not enough to make an individual a great salesperson. But this is how myths get perpetuated. We begin with a bit of information that is true, and then generalize to conclusion that is misguided. Soon it becomes a commonplace assumption.

We found a long list of assumptions about great sales performance that our data shattered. Misperceptions about education, training, relationships, money, desire, or the right sales approach, although erroneous, have persisted -- and have formed the basis of many companies' recruiting standards and management policies. In the columns to follow, we will tackle each one of these myths and compare them to our findings. We will also describe the real differences we found between great sales performers and their counterparts.

As companies face the challenge to deliver increased sales growth year after year, we can't overestimate the importance of this information. The key to sustainable growth is increasing customer loyalty. Customer loyalty is directly influenced by a very select group of your sales force. Understanding what's different about them, using this information to recruit more people like them, and recognizing how a manager motivates these star performers are the keys to developing a world-class selling organization.


Benson Smith is coauthor of Discover Your Sales Strengths.
Mick Zangari is a former consultant of Gallup.

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