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The 1 Factor That Guarantees Sales Managers Miss Their Revenue Quotas

by Oct 24, 2011, 10:57 am ET

There is a common belief that the primary cause of a sales team missing its revenue goal is a dry sales pipeline. If a sales team doesn’t have a healthy prospect pipeline, trouble lies ahead. Yet, there is a pipeline that is more impactful to the financial health of the business than even the sales one. That pipeline is the sales candidate pipeline.

Executives plot out the pathway for revenue goals to be achieved and correlate those with headcount on the sales team. If there are open seats, the math doesn’t work. Each member of the sales team may meet their annual revenue goal, but if you are 20% short on headcount, the department number is in jeopardy.

When salespeople get busy, the first thing thrown off their plate is prospecting. However, when salespeople stop prospecting, the pipeline eventually runs dry. The same principle holds true for sales leaders. When they stop prospecting for sales talent, they run with empty seats on their teams which means they have little chance of hitting the revenue goals.

Panicked, they rush to hire salespeople to fill seats instead of making smart choices. Further compounding the issue, once they hire the salespeople, they don’t have a plan in place to quickly get these new hires up to speed so they generate revenue fast. Some of the sales people make it, and others fail, leaving the cycle to repeat itself once again.

Not having a healthy sales candidate pipeline has a major impact on both the top and bottom-line of your business. Hold yourself accountable for maintaining a healthy sales talent pipeline just as you hold your salespeople accountable for keeping a strong prospect pipeline.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Keith Halperin

    Thanks, Lee. Seems like a good argument for overhiring (when possible). That way- somebody leaves, somebody else doesn’t make quota: you’re set.

    -Keith

  • http://www.SalesArchitects.net Lee Salz

    Thank you for your comment, Keith

    There are some industries that use the overhiring/attrition model particularly those in very high turnover environments. If you pursue that model, you best have some darn good financial people on the team to make sure it doesn’t drain the business.