Today we are going to get somewhat controversial and go after one of the most widely used metric in all of sales management: The amount in the seller’s funnel.
While it is absolutely true that sales is at least in part a numbers game, this particular number creates more bad behavior than any other sales metric.
Generally, the implementation of this metric works something like this: Sales leaders decide that in order to achieve their sales objectives, they need to set some minimum performance standards around pipeline or funnel activity (there’s certainly nothing inherently wrong with that logic). This usually takes the form of an educated guess as to how many open opportunities people must have in their funnel at all times.
For example, if the leadership believes the team has an average closing ratio of 20%, they must keep 5X their quota in their funnel at all times. If they believe the team closes more like 25% of their opportunities, they should maintain 4X their quota at all times.
While on the surface, this may seem fairly rational, assigning a single target for the aggregate amount of opportunities in their respective funnels at all times actually creates some of the least productive sales behaviors we have seen.
Let’s unpack this issue a bit more to see why this is the case and examine an alternative approach that will achieve the desired objective more consistently.