When Sales Misses Their Number

It’s that time of year for most companies – quarter- and year-end.  I call it the ‘twitchen time’.  The time when sales becomes hyper focused on closing deals, bringing stragglers into this quarter, keeping score of Club eligibility, worrying about making ‘the number’, and if they are on the wrong side of the quota-attainment scale, coming up with a credible CYA story.

In all companies the worry about meeting revenue goals is shared by sales and marketing alike. For aligned and unaligned companies alike missing ‘the number’ often impacts the company’s ability to achieve key growth objectives in the following year.  Missing the number means more than missed bonuses, it can translate into having to rethink next year’s plans, up and down, and dealing with the consequences.

How the miss is handled separates aligned and unaligned companies.

We’ve all seen how it manifests in the unaligned company. Sales begins to ‘signal’ that it’ll miss the quarter and subtle (or not) hints are dropped that marketing or products  is to blame.  If that finger pointing isn’t nipped in the bud by leadership, the vicious cycle of blame begins.   What gets lost in the ‘blame game’ are the answers to key questions, starting with ‘why the miss’?  It’s never just sales’ fault or always marketing’s fault; it’s a combination of factors that are often cross-organizational and reach beyond sales and marketing.  The real reason for what went wrong, and went right, never comes to the surface as marketing and sales square off in their respective corners of the boxing ring.  In unaligned companies, the CEO often plays the semi-interested bystander who’s holding a potentially losing ticket with a big bookie price.  S/he knows the dance – beat on sales for the miss, cut budgets, realign more headcount to sales,  and throw marketing under the bus at the board meeting.  Or replace sales and/or marketing leadership.  Again, the real key questions never get asked or answered.

In aligned companies, both sales and marketing know well in advance of a potential ‘miss’ because they jointly own the pipeline.  Their early warning system is a set of leading indicators including the cadence of qualified leads, time and percentage of qualified leads that transition into the pipeline, size of marketing generated leads, and velocity through the pipeline.  When the trend line changes the first question asked is ‘why’.  Jointly exploring and understanding the root cause of the impending miss (or overachievement) gives leadership the power to know what levers to change.   Knowing ‘why’, helps everyone answer the next question, ‘what needs to change’ and ‘how’.   Ultimately, the CEO asks ‘why’ in a collaborative, coaching mode.  While sales and marketing knows what happened in their shared world, it’s the CEO who understands the bigger picture and can see causal relationships in other functions.  

Don’t interpret what I just said as Marketing or Sales Operations is the magical key to insights into revenue misses.  Yes, these are key enabling functions but automation does not automatically result in sales/marketing alignment.  If the leading indicators are not defined correctly or the only time sales and marketing is motivated to ‘talk’ is when a miss is impending – the ‘what’ and ‘how’ will be incorrect.  Alignment is as much about culture and leadership maturity as it is about process.

Chances are marketing knows well ahead of sales of an impending miss.  Take the initiative and start to dig into the root cause.  Come to the table with facts, Marketing’s ‘what’ and ‘how’, and some recommendations on what Sales can do.   Don’t wait for the CEO.

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