Sales leaders with years of experience tend to rely on anecdotal evidence to make decisions on how to run their teams. While acquired knowledge and past experiences are valuable, this poses some issues as well. First, there’s no hard data to back these assumptions up. Patterns aren’t always what they appear to be. Second, even if these beliefs were true at one point, things change. If you aren’t continuously testing and measuring the effectiveness your sales practices, you could be relying on myths to run your team. Here, we get to the bottom of some of these pervasive sales myths with real data.
The 3x (or more) Sales Pipeline-to-Quota Ratio
Conventional sales wisdom suggests that a 3x (or more) sales pipeline-to-quota ratio is necessary for any team to hit its revenue targets. This school of thought says that in order to produce X amount of revenue, a rep must fill the opportunity pipeline with three times that amount. Many sales organizations apply this industry standard to their team, but is this 3x ratio data-backed? Not necessarily. We’ve discovered that what you need is better, not more, sales pipeline. This article explains the three areas that lead to improved sales pipeline-to-quota ratios.
The Experience Myth
The bulk of sales leaders believe that prior experience correlates most closely with the future success of a sales rep. This seems logical — it would make sense that the best way to predict how a new hire will perform is how they’ve performed in a similar role in the past. However, according to HubSpot’s Mark Roberge, this assumption does not hold true in practice. When HubSpot was growing their team, they conducted over 1,000 interviews and measured which attributes correlated most strongly with success. The insights he gleaned from his experiment might surprise you.
The Pipeline Velocity Myth
Pipeline velocity. It seems like lots of salespeople out there want to improve it, but does anyone really know what it means? Pipeline velocity refers to action in the pipeline — whether opportunities are coming in, moving through, or closing out — moving at a steady pace. Essentially, it describes the staleness of a sales pipeline. There is a formula out there that claims to act as a tool to help predict sales productivity over the course of a sales cycle as expected dollars earned per day. While the formula makes sense, it’s missing a big piece of the puzzle. Learn where your focus should be shifted to improve pipeline velocity quickly.
Busy schedules and fast-growing teams make it easy to just rely on what you’ve always known, but taking a step back to challenge the status quo can give you an edge again the competition. What do you think are some of the biggest sales myths out there?
