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“But We’re Making Our Number…..”

by David Brock on September 9th, 2021

Recently, I had an interesting conversation with an executive. It was a large organization. By most measures, it was extremely successful. Year after year of good (perhaps not great) revenue growth, good profitability. They checked all the boxes the financial markets tend to care about and it was reflected in their stock price.

But the executive was uncomfortable. As we peeled back his concerns and started looking at the data, we discovered some interesting things:

  1. Sales/revenues had been growing very nicely.
  2. But win rates were in the 20-25% range for qualified opportunities. Interestingly, this was driven less by losing to competition, but more by customers just getting lost in their buying journey.
  3. Average deal values were pretty consistent. Renewals, retention were OK, but accounts weren’t growing as much as the exec thought they should.
  4. The company had 4 major product lines, but 70% of the revenue was coming from one.
  5. Account plans were pretty weak, sales people focused on retention/renewal. They could make their numbers off that.
  6. New customer acquisition was pretty good, lots of inbound interest.
  7. About 85% of the people were making their numbers.

On the surface, it looked great. There was an attitude among many in the organization, “Why change, we are making our numbers, things are great!”

But the exec was uncomfortable—-and he should have been.

The reality is they could have been doing so much more! They were hitting the number, but significantly underperforming the potential.

The win rates were horrible! Think of the additional revenue if they could move from current performance to a 40% win rate!

They were not growing the accounts the way they could be, there were 3 great product lines, they weren’t spending a lot of time selling. They could have dramatically increased share of customer and revenue, by simply developing strategies to bring the other product lines to the current customers, or by acquiring new customers through selling these product lines. But the sales people didn’t feel an urgency for doing this because, afterall, they were making the numbers.

As we dove, more deeply, we started discovering, that customers were buying almost in-spite of the sales people. (win rates should give you a clue). The company had a very hot product, it addressed a critical need for the customer–at least those that were making it through their buying journey (and enough were to achieve their goals.

We came to the shared conclusion, that there was so much more opportunity they could be capturing–both with their lead product line and with their other product lines.

I joked, “Perhaps you should double their goals, this would force them to rethink what they are doing. They’d have to start selling more, not just doing what they have always done.”

The executive smiled, saying, “Hmmm, you might have something there……”

Selling isn’t really about making the number, hitting quotas/goals. It’s about maximizing what you can do for your customers in helping them grow and thrive. We want to drive higher win rates. We want to sell our entire portfolio. We want to maximize our ability to create value for our customers, enabling them to achieve their goals.

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