Get In Touch
Let us know what you’re interested in and we’ll be in touch.Reach Out
Did you hire reps who didn’t have the right personality traits to be successful? Are you not coaching and training on the skills that matter? Are you not creating the right incentives for reps to go that extra mile? Based on a survey of 44 companies and 511 reps, with a specific deep dive on educational technology companies, we found that high performing ed tech reps are confident, detail-oriented, highly driven extroverts who are less empathetic and more motivated by money and by their role than their lower-performing peers. Yet ed tech firms in our study did not recruit for such people, did not place much of their compensation at risk, and did not focus on training or coaching in the critical skills for success. Ed tech companies that get this right can grow their sales, hit their milestones, and gain a significant advantage.
Having a great sales team is critical to driving growth. Sales efficiency is, after all, the growth engine—the “oxygen,” in Bessemer Venture Partners’ words—for tech firms. As Peter Kazanjy, the Co-Founder of TalentBin put it: “The ability to attract, hire, and onboard successful sales reps and execs is an enormous competitive advantage, especially if you’re up against ossified incumbents.”
Yet many growth stage ventures do not perform this basic task very well. We surveyed 44 growth companies with an average of $35 million in funding and $40 million in revenue. More than 40% of these companies reported that at least half of the sales reps they hired left within three years. And successful reps often are hard to retain: 36% of our survey respondents reported that more than 10% of their highly successful sales reps left within one year of joining the company. This high churn is costly. Companies must put more effort into the recruiting process to yield successful reps and then must go back to the well when they can’t retain those reps
Getting sales efficiency right is particularly important in ed tech because the education market is riddled with sales challenges. Educational institutions often have multiple gatekeepers and decision makers—teachers, administrators, school boards, sometimes even legislators or voters—who have to reach agreement before making a big purchase. As a result, procurement timelines tend to be longer than in other markets. Education markets are also highly fragmented. The K-12 market in particular is highly decentralized with fewer opportunities for enterprise-scale sales. And because educational outcomes are inherently hard to measure, ed tech companies face a hurdle in demonstrating to potential customers the return on investment in their product.
Unsurprisingly, then, few ed tech companies truly achieve scale. Our research finds that the number of ed tech players plummets after about $250M in revenue—the point at which managing the growth engine becomes the critical driver of success. For companies that can maintain growth through $250M, the market rewards are considerable.
So how can ed tech companies attract and retain the right sales reps for their business model? To answer this question, we enlisted 44 growth technology companies to participate in our proprietary Sales DNA and Commercial Capabilities Assessment surveys. Sales DNA asks sales reps about their “intrinsic” personality characteristics, such as extroversion, diligence, and empathy; their particular skills, such as networking, prospecting, resource management, and product knowledge; what motivates them—rewards? professional growth?—to succeed; and the cultural enablers of success in their company, such as entrepreneurship, strong leadership, and the like. Separately the heads of sales provide us with a rating of their sales reps from strongest to weakest performers. We are then able to identify the characteristics that most distinguish the highest performing reps from the weakest performing reps; in other words, the secret sauce—the characteristics that high performing reps have that their weakest team members don’t.
The big surprise? The stereotype of needing to hire a former educator who has a good network and is empathetic to the challenges of the institutions they are selling to doesn’t hold up. We discovered that what differentiates the top performers in ed tech—and what ed tech companies should therefore look for and cultivate when building their sales forces—are some of the classic traits of high performing salespeople in any tech company.
Because of the daunting challenges that ed tech reps face, diligence and a drive to achieve are key personality traits that distinguish high performers from the rest of the team. Reps must be detail oriented, ambitious, and persistent in the face of long sales cycles and multiple potential setbacks on the road to closing a deal. They must be extroverts—positive, dogged, ambitious, and confident—in order to convert naturally skeptical educators into valuable customers. And they are less empathetic than their lower-performing peers, suggesting they are willing to push to close a deal rather than lend a sympathetic ear to potential customers.
Beyond their personalities, high performing ed tech reps excel relative to their peers in certain skills. They are distinguished by their account management skills. Given the diffuse and fragmented universe of potential customers, high performing reps excel at prospecting and account planning: identifying leads, evaluating the potential of those leads, choosing targets, and creating a strategy to reach those targets. They then are highly effective at building relationships and networks among customers and potential customers. And once they have established relationships and sales strategies, they excel at developing trust over time and understanding deeply the customers’ needs so that they can tailor an offering. At the same time, they know how and when to leverage experts and support to bring particular knowledge to the sale. The best reps are also great at time management—setting and achieving their priorities. And, having invested in the time and effort of closing a deal, they maintain a relationship with the customer that they can leverage to cross- or upsell.
The highest performing ed tech reps are motivated by financial rewards, significantly more so than low performers. The design of compensation mechanisms to reward high performers is therefore just as important to ed tech companies as it is to growth companies selling into other sectors, where the low and high performers are all motivated by money. Compared to the low performers, they are also motivated in particular by the meaningfulness and purpose of being a sales rep, suggesting that hiring a former educator who doesn’t love sales is the wrong move. Finally, top ed tech reps thrive in an entrepreneurial culture in which they believe that leadership is committed to their sales development and growth. Top ed tech reps also don’t think their companies are very performance focused and aren’t tough enough on weak performers. This is supported by what the weakest performers reported in ed tech, which is that the weak performers perceived a culture whereby their performance is nurtured and supported. This suggests that ed tech companies may want to consider stronger performance management systems that reward the top performers and take appropriate actions for those reps who aren’t delivering.
Understanding the makeup—the “DNA”—of high performing ed tech sales reps allows companies to design their recruiting and retention programs to identify, hire, and retain the best reps. Of course, all companies need to hire salespeople with certain traits that constitute a minimum bar—things like product knowledge, assertiveness, and closing ability. But our analysis reveals the differentiators that make salespeople in different cohorts not only good, but great. With this understanding, companies can tailor every stage of their sales recruiting, training and retention processes to take advantage of the distinctive characteristics that predict success.
They first have to find the right people. This is especially true with respect to intrinsic traits that generally cannot be taught. Our research found overwhelmingly that ed tech companies recruit for the wrong personality traits. Our survey respondents reported that they focus their interviews on things like openness, agreeableness, and curiosity that are not correlated with high performance. Indeed, most companies look for empathy in their reps, which is negatively correlated with success. This is a mistake. Our research suggests that ed tech companies should look for great salespeople—persistent, diligent, and extroverted reps who may initially seem like an odd cultural fit because they are less empathetic and hard driving.
How can ed tech companies screen for those traits? At the very least, they should consider more widespread use of interview guides and personality tests. Only 37% of ed tech companies in our survey reported that they use interview guides, and no ed tech company reported using a personality test as part of their recruiting process.
Ed tech companies should also look for reps who have demonstrated traditional sales skills like the ability to build and maintain robust networks, develop specific target and sales strategies, and leverage experts when needed. Here too an interview guide is an especially important tool.
But unlike inherent personality traits, skills can be taught. Training and coaching are therefore a critical part of developing a high-performing sales team. Yet in our study, most reps said that they do not receive coaching in a range of critical skills: relationship or network building, prospecting, resource management, understanding customer needs, product knowledge, value proposition delivery, or negotiation and closing. Increasing the coverage of in-house training and coaching programs could deliver significant benefits by taking those reps with strong personality traits and doubling down on inculcating in them the skills they need for success.
Most importantly, ed tech companies can materially improve the quality of candidates they attract and retain by putting more compensation at risk. As we describe above, the highest performing reps are more motivated by financial rewards than poorer performers. But more than 60% of the ed tech companies we surveyed said that very little—under 40%–of their sales reps’ total compensation was variable or performance-based. Other growth tech companies, by contrast, put much more compensation at risk—at least half of their sales reps’ total comp and often much more. By aligning their compensation mechanisms with the rest of the growth technology market, ed tech companies could better attract and retain the high performing salespeople they need.
Finally, ed tech companies should invest in the commercial capabilities that support their sales teams. Our analysis revealed significant gaps in ed tech capabilities. The ed tech companies in our survey, for example, scored poorly relative to an industry benchmark on capabilities like tactical marketing and price and contract management. The former is key to driving more leads, a particular need given the relatively fragmented nature of the education market. Price and contract management can be improved across the board—ed tech companies appear particularly unskilled at pricing for value, incorporating go-to-market strategic thinking into their pricing, and developing a robust pricing infrastructure. Improving these capabilities will help sales reps tailor their offerings to particular clients.
* * *
Let us know what you’re interested in and we’ll be in touch.Reach Out
In tight funding markets, making the most out of every seller is critical. The prize for getting this right is growth. In the challenging ed tech market in particular, where many try but few achieve growth beyond $250M, beating the odds requires that managers be as scientific and data-driven about their sales recruiting and training as they are about developing their product or managing their capital. Leaders who embrace the challenge of rigorously finding, hiring, training, and retaining great sales forces will see outsized rewards for their companies and be able to close the gap between their weakest and best performers.