Overcompensating with Brute Force

Growing sales teams often struggle with the inefficiencies that come with expansion.  Sales leaders must understand the nuances of each salesperson to accurately interpret their pipeline updates.  With only one salesperson, this is manageable; the sales leader may grasp 90% of what’s communicated, leaving a 10% margin of error.

However, as more salespeople are added, the time available for individualized understanding decreases.  As a result, comprehension drops below 90%, and the error rate per salesperson rises.  This compounds as the team scales, leading to a growing risk of misinterpretation and missed projections.

So, how do companies typically respond?

As confidence in accurately predicting individual deals declines, organizations compensate with sheer volume — what we call the brute force approach. When you hear sales teams say they maintain a 3-to-1 pipeline-to-quota ratio, they’re using brute force to hit their targets.  This requires them to retain greater sales resources than should be necessitated, spending more money with lower demonstrated results per person.  You pay now and you pay later.  

Instead of forecasting with precision on a deal-by-deal basis, they rely on mass coverage to offset low intelligence per deal.  This approach also promotes deeper discounts per deal, as it demands selling on the vendor's schedule (end of the quarter) instead of when the customer needs the product (compelling event).  Overall, this is a risky and costly strategy with low return.  

The solution?  Get rid of language barriers with an outcome-based approach at every stage.  Remove subjectivity, replace it with objectivity, minimize interpretation and reduce error rates.  MOIC's Pipeline Grader can help drive and reinforce the behavior to do just that.  Pipeline Grader measures the pace and progress of each near term deal by tracking "are we ahead" or "are we behind" on a deal by deal basis, thus providing an on-demand, unbiased view of the likelihood of each deal for the current quarter.

Each of the five Pipeline Grader markers is "on the clock" ensuring that there is accountability for driving deal closures based on selling when the customer needs the software in accordance with the corresponding business case versus the artificial end of the quarter deadline to which software vendors generally adhere.

Every SaaS sales leader/CEO needs to be able to stand in front of his/her Board of Directors with 30 days remaining in the quarter and provide a line item based forecast with a minimum 90% accuracy rate.  Vigilant compliance with Pipeline Grader principles provides leadership with the data to support consistent 90% sales forecast accuracy.

If your sales organization struggles to achieve 90% accurate sales forecasts without resorting to the brute force method, you can ask Virtual Dave or email dave@moicpartners.com for guidance.