I was interested recently to read this post by Matt Green on LinkedIn. In it, he points out that when organizations hand down large growth targets like, say, 20%, the tendency is for sales teams to panic. And then to invest in one big change, like hiring a lot of SDRs to bring in a lot more leads or investing in a big new technology platform or sending out massive automated email campaigns. This almost always backfires.
He then suggests that we don’t have to panic over big goals, and offers a formula for increasing sales by 20% without making everyone crazy. In short, he suggests making small tweaks in multiple places, instead of one big change in one area.
In other words, treating your growth as the result of a web of causality, rather than a one-factor linear process.
Derek Cabrera, of Cabrera Lab, likes to say that “the micro makes the macro.” He compares it to the Grand Canyon. It’s easy to think, when standing at the edge of that vast landscape feature, that it must have been formed by some cataclysmic event. But it wasn’t. It was formed by a large web of small changes (water running, stones eroding, plants breaking down minerals) over millions of years.
In sales terms, this means: Don’t expect 20% growth overnight, unless you are addressing all of the factors that are impacting your outcomes. You can’t just buy a new piece of software and expect it to cause big changes. You can’t just implement a new process and expect it to cause big changes. You can’t just hire more salespeople and expect them to cause big changes, unless your system as a whole is functional.
You have to take it piece by piece, and you have to know which pieces to change, and how.
Matt’s post referred to a formula from Todd Caponi, that suggests that sales results come from Qualified Opportunities x Deal Size x Win Rate divided by Cycle Length. The point of the formula is that there isn’t just one lever. There are multiple levers, and they’re interdependent.
When you try to optimize one without addressing the others, you can create more problems than you solve. Tell your salespeople they have to increase their deal size by 20%, without changing any other levers, and you can end up with salespeople who actively try not to close smaller deals, even when they could and it might be preferred. Flood your pipeline, and you end up with salespeople so busy trying to manage unqualified deals that they don’t have time to focus on the promising opportunities. And so on.
Win/Loss Analysis: A Vital Tool in Understanding Your System
Often, sales leaders treat win/loss analysis as a sort of scorecard by which we judge salespeople, opportunities, and process. But when you have the right metrics and tools, your win/loss analysis can yield valuable insight into the levers you can pull to influence your system and create growth–without disrupting your team.
For instance, in research conducted with Cabrera Lab, we discovered that within one complex sales system, single-stakeholder deals were associated with low win rates. Deals with four to five stakeholders, on the other hand, had the highest win rates. Equipped with this information, we can tweak our system by pulling the lever of increasing the number of stakeholders (up to a point) that salespeople strive to identify and connect with (based on knowledge about customers' systems).
Of course, this is only one of many possible levers. If we can tweak it even a little bit, and then tweak other parts of the system, we can drive big changes.
Inside the Membrain platform, we provide customers with the ability to track specific aspects of each deal, and then analyze them to see which levers make a difference. You can track hard data such as industries, number of employees, and number of stakeholders, as well as “soft” factors such as how urgently they rank their need, why they chose your or a competitor’s solution, and the quality of the fit.
These are fully customizable, to enable you to investigate the levers that affect your sales system effectively and apply the small changes that yield big results. Remember, “the micro makes the macro.”
As Matt pointed out in his post, to get to 20% growth, you don’t necessarily have to pull off heroics, if you combine levers and make small tweaks to each of them. His example: One better discovery call, one less discount, and one faster close = one big leap.
These small tweaks compound, and they compound even more over time. When you build coaching, enablement, consistent win/loss analysis, and feedback loops into your system, you can achieve big results over time that might otherwise feel impossible.
The Grand Canyon wasn’t formed in a day, and neither is a world-class sales system. But with small changes over time, both can happen. Instead of reaching for the next “big solution” for your team, take some time to review your win/loss data. Get more granular with it. Identify the micro-levers that impact results. Recognize it all as part of a larger system, that can be nudged in big ways with small changes. Then make those small changes to your people and processes.
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. George is also the author of the book Stop Killing Deals and the host of the Stop Killing Deals webinar and podcast series.
Find out more about George Brontén on LinkedIn
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