6 reasons revenue attainment may be the wrong measure for success

George Brontén

 

CSO Insights has published their 2018-2019 Sales Performance Study, and the headline news sounds promising: More organizations are attaining their revenue goals than last year. 93.9% of surveyed organizations reported achieving their revenue numbers, against 88.9% last year.

But that’s all the good news there is from the report, and it’s not as good as it sounds.

“Sales leaders are finding a way to make the numbers,” says the report. “But they aren’t doing it by improving the productivity and effectiveness of their teams.”

Short-term revenue attainment can keep a company alive, but it doesn’t contribute to the long-term success of the organization if other critical measures aren’t attended to. Evidence from the study shows either stagnant or decreasing effectiveness on nearly all other measures.

Here are 6 reasons that revenue attainment news isn’t as good as it sounds.

1. Quota attainment has gotten worse since 2014

The 2018 quota attainment rate went up to 54.3% from 2017’s rate of 53%. Unfortunately, statistically, this improvement is too small to constitute a trend… and it’s still well below the 2014 rate of 63%.

2. Win rates are stagnant

Meanwhile, win rates against forecasts remain stagnant. Taking into account only forecasted opportunities, the 2018 win rate average is 47.3%. Exactly the same number as 2017.

3. Lead generation has gotten worse

The lead generation data is depressing. In 2014, 49.7% of organizations reported having a formal lead definition. By 2016, that number had dropped slightly to 42.6%. This year, the number is 29.5%. The authors of the report point out that this number is influenced by increasing complexity and the availability of more measures and higher expectations. But as long as the organization can’t agree on what constitutes a “lead,” it is impossible to forecast or analyze data accurately, or even engage in effective lead generation.

4. Sales cycles are longer

Short sales cycles have gotten longer, and long sales cycles have also gotten longer. According to the report, “In 2013, 30% of the study participants reported a sell cycle of three months or less, as compared to 25.4% this year.” Meanwhile, sales cycles of longer than one year have increased from 10% in 2013 to 18.1% this year.

5. Sales leaders rate their teams as less effective

When asked whether they rate their teams as “effective” or not, fewer sales leaders this year than last said that they do.

6. Two key performance factors remain stuck

The authors of CSO Insights, based on decades of extensive research, identify two key factors for how well an organization will perform: Depth of relationship with customers, and whether they have a formalize process. Neither of these two measures improved in 2018.

You can download the full report here.

3 key take-aways for your organization

While this year’s report might sound like all doom and gloom, remember that these numbers are only averages. Some organizations are doing much better, and some much worse.

If you want to be among the “much better” crowd, the report includes evidence-based strategies for getting there:

  • Develop a customer-centric culture (50.6% of top performers do, versus 20.2% of low performers)
  • Align your sales process to the customer journey (49.4% of top performers versus 7.1% of low performers)
  • Provide insights to prospects and customers (64.9% top versus 26.3% low)

There is no quick fix for this. It’s going to take commitment and strategic leadership and disciplined execution to address the persistent performance issues in our industry.

Certainly, no one piece of software can solve it, for your organization or anyone’s. But if improving your sales team’s effectiveness is on your goals list for 2019, I believe Membrain is the right technology to support your efforts. Contact me to discuss how it can help you.

George Brontén
Published January 9, 2019, written by

George Brontén

George is the founder & CEO of Membrain, the Sales Enablement CRM that makes it easy to execute your sales strategy. A life-long entrepreneur with 20 years of experience in the software space and a passion for sales and marketing. With the life motto "Don't settle for mainstream", he is always looking for new ways to achieve improved business results using innovative software, skills and processes.

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