Successful sales performance is critical to any revenue-based organization. An organization that consistently misses its sales goals may be forced to reduce operations or even go out of business. That's why it is critical for any struggling sales organization to quickly identify factors for poor sales performance and correct them.
A poor economy, such as a recession, can cause a dramatic drop in sales. It's possible that in a severe downturn that no amount of effort will offset the fact that many customers simply don't have the money to buy. Organizations caught in this situation may have no choice but to scale back operations or change pricing models and product lines until the economy recovers.
The sales forecast might have been tied to a splashy marketing campaign that failed, or consumers simply did not take to a new product offering the way management expected. Or senior management, in a desperate attempt to increase revenues, may have simply placed unrealistic expectations on the sales team when compared with past performance.
Poor individual performance can also affect sales. Sales people--and sales management--must be held accountable for meeting aggressive yet reasonable goals. The company should go to great lengths to motivate and retain producers, while placing others on performance-improvement plans with regular reviews and mentoring.
A poor sales pipeline can also negatively impact sales performance. Sales organizations pressured to show immediate sales often focus on the back end of the sales pipeline--where the deals are closed. However, that can lead to too little prospecting for new customers. In July 2010, Microsoft cited a survey of sales managers that said that only one in three of the managers felt that their sales teams were making enough sales calls to meet revenue goals.