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We all know the Pareto Principle, which broadly states that 80% of the effects comes from 20% of the causes. Countless sales organizations have gotten themselves into deep trouble by mindlessly applying this principle to their sales organizations. I call it the Pareto Protocol.

Sales management thinks something like the following, “We’ve done an analysis and find that 80% of our sales comes from only 20% of our sales force. We need to fire 80% of our salesforce, which will lower our overhead and increase our profits!”

They think that if they can increase the sales of the 20%-super-producers by just 25% they won’t see any decline in revenues, while simultaneously realizing an 80% reduction in their base sales payroll. It sounds too good to be true, because it is.

I’ve seen the results when the Pareto Protocol is applied to sales organizations and it is consistently a disaster. I am fully aware that every sales organization has salespersons that need to find another career, or at the least be encouraged to work for a competitor.

I am also fully aware that every sales organization has its high producing heavy lifters, but to think that they can and will do even more lifting, all the time, is an ill-advised sales strategy.

Before your sales organization is tempted to partially or fully implement the Pareto Protocol, please consider the following:

1. Your top producers are in that position because they are already working at high capacity. Do they really have an additional 25%+ of bandwidth to give you?
2. You have salespeople at differing levels of development. Firing 80% of the sales force will undoubtedly nip many future super stars in the bud.
3. After applying the Pareto Protocol your sales force is now theoretically comprised exclusively of superstars; you’ve unintentionally created headhunter heaven. Be prepared for your superstars to be rapidly and easily gobbled up by your competitors.
4. Sometimes sales management tends to put their heads in the sand and pretend that everyone on the sales force has exactly the same opportunities. Not true. Accounts, products, geography, experience, sales management, etc. are variables that have to be accounted for and leveraged for each salesperson.

There is a normal distribution of sales capabilities within all sales organizations. Please see Sales Managers, Invest in Your Average Performers.

Sales management needs to focus on improving/removing the bottom 15%, improving the middle 70% and rewarding the top 15%. Sales management also has to look at its own skill levels at managing the sales force most effectively, but that’s for another post.

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Sales managers should occasionally review the salespeople that work for them and see where each fits in the following four categories. If you are a salesperson you might want to take a look at these categories and see which one applies to you. This can be a real eye opener for both salespeople and sales managers.

The Angel. The low maintenance high producing salesperson is one that brings home the bacon and doesn’t need a lot of his or her manager’s time to do so. This is where you want to be if you’re a salesperson and where you want all of your salespeople to be if you are a sales manager. The only cautionary note I have is that sales management tends to forget these people sometimes and not give them enough positive feedback and attention. This can be a big mistake. Other companies want to hire these people.

The Handful. The high maintenance high producing salesperson is the individual who can generate the revenue numbers but who needs a lot of attention from sales management. While their sales numbers are good, they might need someone to frequently hold their hand through troubled customer waters and provide them a lot of positive feedback. These salespeople may require more management time, but sales managers shouldn’t complain. They’re worth the time.

The Under the Radar. The low maintenance low producer is the salesperson that requires little to no management time, but isn’t exactly setting the world on fire with their sales numbers. In fact they rarely hit their numbers. These people can become invisible on occasion because they aren’t getting anyone’s attention with their results and they don’t demand a lot of management time. Sales managers can’t ignore this group (as is frequently the case) or just write them off; they need to make the decision to either attempt to get them producing or replace them.

The Devil. The high maintenance low producer is the salesperson that is the worst of both worlds. They take more than their fair share of sales management time, especially considering their results. They also rarely, if ever, even get close to their sales budget. These are sales management’s best choice to replace, and quickly. If there isn’t an unbelievably compelling story regarding how they can be rehabilitated you’ll be further ahead by not having them on your team, even if you don’t replace them.

So there you have it. Just about every salesperson (and sales manger too for that matter; just ask VP’s of sales) fits neatly into one of these categories. The new year will soon be here, time to review where you or your sales force fits.