Bookings and revenue are sometimes used interchangeably. This is not a trivial mistake to make. Conflating the two terms can give you a very wrong idea about how your business is doing. 

Things get even crazier when it comes to forecasting.  Organizations use forecasts to plan their course of action. This means the difference between booking and revenue forecasting is more than semantic. If the forecast is off (or forecasts the wrong thing), this can spell serious trouble. 

We’re here to prevent that from happening. In this article, we’ll cover the differences between bookings, revenue, and show you how to forecast them correctly.

What is a Booking?

In the SaaS world, bookings are a forward-looking metric. It’s a commitment (in dollars) the customer makes to pay for your services over a period of time. Bookings are usually accompanied by a legal agreement. 

In other words, the customer has “booked” your service for the duration of the contract. The value of the contract is measured in all the money you stand to make for the set period.

For example, your client signs a 12-month contract for $100 a month. The value of that booking would be $1,200.

Why are bookings important?

The number of bookings is a great way to figure out how well you are communicating the value of your product or service. If people are booking you a lot, this is a good sign your business is growing. 

But don’t pop the champagne, yet.  If you notice a sharp decrease in bookings, this may spell trouble a few months down the line. 

What is Revenue? 

Revenue is an accounting term and pertains to all the money you’ve earned from your customers. But there’s a catch. To keep things consistent, you want to recognize money coming in as revenue after you’ve provided the service.

Bookings are usually far more exciting than revenue. Bookings promise you a glamorous future (hopefully). Revenue keeps you grounded in the here and now. 

Many organizations go about this all wrong. They recognize all incoming money as revenue. If they get lots of pre-payments, this artificially inflates their numbers and creates needless volatility. It can also be illegal to do that because Revenue recognition is regulated by accounting principles and/or laws. In the US, for example, most companies are required to follow GAAP rules. So, to get around this, recognize revenue once you’ve provided the service.

Let’s get back to our example from above. Say the client pays you the whole sum of $1,200 for the entire year. Does that mean you recognize it as revenue for the month of the deal? No. The proper and GAAP compliant way to do it is to recognize the revenue on a monthly basis once you’ve performed the service. This means $100 a month for the entire year.

In other words, you don’t count something as revenue until both sides have held up their end of the bargain. 

Why is revenue important? 

Revenue can be a very effective gauge of how your business is doing right now. If it’s recognized properly, that is. If you only rely on bookings, you may get very inflated numbers that don’t tell the whole story. 

For example, bookings may paint a great financial picture. If you closed a bunch of deals this month, things may seem great. However, if the actual revenue coming in is barely enough to keep the lights on, you may have a cash flow problem. Looking only at bookings conceals this problem. Revenue reveals it.

Knowing the difference between revenue and bookings is only half the battle. The other half is forecasting each one of them effectively.

How to Perform a Booking Forecast

Coming up with a working forecast model for bookings is not difficult. But it requires a lot of number crunching and digging around the CRM. 

There are three main models you can try:

1. Basic forecasting – this one is the simplest method that will need the least amount of work. But it’s also the least reliable. You basically aggregate the pipeline based on CRM and close date.

Pros: simple, relatively quick, relatively easy to pull off

Cons: limited, not as reliable as the other models in the list 

2. Weighted pipeline – this model weighs amount of opportunity based on the probability of closure. It then adds all the weighted amounts together to get the size of the pipeline. It’s where things get more technical and require a lot more work.

Pros: reliable, accurate, uses a large data set to determine outcome

Cons: complicated, takes a lot of time without the proper software

There are multiple ways to perform  weighted pipeline forecasting like

2.1 Weighted pipeline with static criteria: In this version of weighted pipeline, every opportunity is weighed based on its position in the pipeline i.e. probability associated with the deal stage a particular opportunity happens to be in.

2.2  Weighted pipeline with dynamic probability: Same as above but has one very significant difference. Instead of using static probabilities associated with the deal stage of the opportunity this type of forecasting model uses individualized probability for each deal. Individual probability can be configured 

A. Dynamic Probability Fixed Criteria : Deal stage probability is calculated based on a predefined set of criteria. The closure probability is calculated by applying statistical methods like regression over historical data. Typical criteria includes:

• • • • • • • Rep history 
            • Size of deal 
            • Size of customer’s revenue 
            • Whether a deal is the first / only deal with the same account or follow-on deal 
            • Number of days left till the end of the quarter 

                      Different companies choose to use a different set of criteria.

                     In this forecasting method, the probability of each deal (and hence overall pipeline) changes everyday. 

B. Dynamic Probability Dynamic Criteria i.e. Predictive Forecasting: Same as above but instead of using fixed criteria, one uses advanced machine learning algorithms to automatically select the most significant criteria. This provides the most accurate measure of close predictability based on historical data. Doing this predicts the close probability and expected close amount of the deal.

3.  Collaborative forecasting – by far the most complicated model of the bunch. This is a bottom-up booking forecast model suited for bigger sales teams. Each member of the team submits a forecast to their managers. The managers double check and often override the forecasts before moving them further up the ladder. 

Pros: the most accurate model, goes through several filters along the way, good for both details and big picture thinking

Cons: takes a lot of resources, things can easily get messy if it’s not properly manage, difficult to pull off without assistance

Creating a booking forecast takes up lots of time and resources. If you’re not a fan of looking at the same old spreadsheets for hours on end, there are more elegant solutions on the market.

MoData offers functionality that automates these processes and allows you to create reliable forecasts more easily. With all the information at your fingertips, you save hours of tedious number crunching. 

How can you perform a booking forecast with MoData

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With MoData, you can still use any of the models from above. And, you can do it faster and a lot more efficiently. Let’s explore each of the options. 

1. Basic forecasting

MoData allows you to use this model with a few simple clicks. Since the software is already connected to your CRM, you can easily aggregate the pipeline based on the CRM data and expected close date. 

The process is near automatic and it will give you a reasonably accurate booking forecast. While this is the fastest model you can use, it is not the most accurate. But it’s ideal if you’re looking for a quick booking forecast and you don’t have the time to use any of the other models we offer.

2. Weighted pipeline

The weighted pipeline booking forecast model is more accurate but it requires more data and a pristine pipeline maintenance. Most importantly, from there on out, the system weighs every opportunity according to its position in the sales funnel. Usually based on the stages and stage probabilities. 

Of course, the system also has the capability to dynamically calculate stage probability based on historical data. Both using a set of criteria, as well as by discovering the criteria using Machine Learning Algorithms. The software supports all the types of weighted probabilities we discussed above, so you get complete freedom to use it as you see fit.

This is where you’re probably thinking, “Well, hold on a minute. What if something changes during the process? What if our sales team knows something about the deal which can’t be represented in the CRM, but actually does affect deal probability? The system doesn’t account for such human element, does it?” Actually, it does.  

For example, let’s say we have deal in the CRM which is about to close, i.e. it has 90% probability in CRM. But our sales rep finds out that our sponsor at the customer side is about to leave, hence the deal is not going to close. It’s very likely, but not set enough that deal should be moved to a lower stage in the CRM. 

Such situations arise all the time. We understand that conditions may change at the drop of a hat, so we’ve built-in an override function for the rep/rep manager. In other words, whoever is using the system can use their better judgement to adjust the probabilities if they know there is a good reason for that.

 

If changes occur, the rep can go to the MoData UI and manually, with a few clicks adapt the probability without messing everything up in the CRM. It’s an elegant solution in an unpleasant situation. And it doesn’t contaminate the data so the general conclusions remain intact. 

This functionality goes even further. You can add more than one probability to a single opportunity. This means you can play with various “what ifs” and come up with a model you think best works in that particular situation. All of this, without messing with the CRM and without confusing the rest of the team.  

Finally, you can allow the system to make the prediction. The auto probability function uses machine learning and historical data to make a prediction for you. 

3. Collaborative forecasting

The most complex model we’ll talk about today. Collaborative forecasting is excellent for bigger sales teams. But it can be messy. With so many people involved in forecasting process, without proper management, it’s bound to be chaos.

MoData offers the antidote. Our UI is simple to use and allows every member of the team to submit forecasts. The manager can then compare the models and see if anything sticks out before moving them up the ladder. 

The best part about using MoData is that each team member can make several different models and then decide which one to send. Essentially, you can combine all three methods and come up with a much more accurate forecast. 

In fact, we’ve had clients reporting a forecast accuracy of over 90% within two months of using the system. 

Now you know how you can achieve an accurate booking forecast. This is important because the booking forecast will factor into the revenue forecast. 

How to Perform a Revenue Forecast

 

Revenue forecasts are more difficult to perform than booking forecasts. It follows the formula below:

Revenue Forecast   = Booking Forecast Based Revenue + Scheduled Revenue

 

Let’s unpack this formula. 

What is booking forecast based revenue?

Booking forecast is the amount of revenue you are expected to generate based on deals in your pipeline. We’re looking at the deals that are likely to close i.e. the opportunities which haven’t closed yet. 

We have discussed booking forecasting in previous sections already. However that process generally covers total size of the opportunity over the life of the deal (or at best annual revenue expectations), which does not answer the question you really trying to answer for revenue forecasting 

“How much revenue we are expected to generate, per month/quarter, with all the open deals in my pipeline based on their forecasted close date and forecast TCV?” 

While booking forecast based revenue is heavily informed by the booking forecast, it can’t directly be used for this purpose. It’s more of a starting point. One needs to refine the number in following ways:

1. Add “time scale” to the estimated total contract value and forecast how much monthly/quarterly revenue is expected to generate from all the deals in the pipeline (based on their respective close probability and close date). 
2. Add one time payments you are expected to earn from customer plus their first period payment. 

 

In other words, Booking forecast answers the question:

“How much total revenue we are expected to generate if the particular deal closes in a particular quarter for a particular amount?”

Booking Forecast based revenue answers the question:

“If a particular deal closes, how much revenue will we make each month for the life of the deal?” 

What is scheduled revenue? 

Scheduled revenue is the revenue coming in from past deals. For example, you’ve closed a deal for 12 month for $12,000, which means $1,000 a month. This means when you’re calculating your revenue forecasting, you include $1,000 from this deal, not the entire amount. 

Revenue forecasting may seem simple at the surface level but once you start doing it, you realize how deep the rabbit hole goes. You need to break every deal into equal payments and perform complex calculations. With MoData, you can do all that with a few clicks. The software can distribute the revenue of a deal across its lifetime, making the creation of a revenue forecast that much easier. 

How can you perform a Revenue forecast with MoData

MoData allows you take the value of the deal in the CRM and spread out over a period of time. You can do that both to the booking revenue and scheduled revenue. We allow you to add one time payment, delivery based payment (common in services company) and many other possible combinations. We have worked tirelessly to support multiple revenue forecasting models.

To take it a step further, the system supports multiple “what if” models. What this means is, you can set up different parallel scenarios in the system without messing up all the data. You can change different parameters in real time and see how exactly they are going to affect your end-of-quarter results.

Conclusion

It’s important to know the difference between booking and revenue forecasting. They’re interconnected, but they are not the same thing. Knowing the difference and performing both forecasts well is important if you want to avoid a whole bunch of problems, from setting unrealistic expectations to cash flow problems. 

MoData makes forecasting a lot easier. Check out other content on the blog. Don’t forget to sign up for a free demo and see for yourself how well the software works. If you would like to be updated about articles in the future, join the club and sign up for our newsletter.

Introduction

Prospect feedback interviews are an important part of an overall win/loss analysis. A study conducted in 2017 by CSO Insights shows a direct link between uncovering the reasons why customers stop doing business with an organization and the overall sales performance. But you can take this process a step further.

 

These interviews, along with a win/loss analysis can help you better understand why customers do business with you or why they don’t. The same study demonstrates these practices (along with a few others) help world-class performers attain 69.8% of their quota as opposed to the average of 53%. Clearly, the power of these techniques should not be underestimated.

 

In this article, we’ll answer the following questions: 

 

• What is a prospect feedback interview?
• Why is it important to conduct?
• What are the goals of feedback interview?
• Who should conduct it?
• What critical questions should you ask? 

 

To help you to conduct sales analysis and take your sales to the next level, we’ve compiled an interview template you can download for free. You can make your way towards the bottom of the article to check it out. 

What is a prospect feedback interview?

Prospect feedback interviews are short form interviews conducted by someone from your organization or a third-party contractor. The main goal is to determine the reason why an opportunity was won or lost by reaching out to former prospects who were involved in each of those deals.

 

Prospect feedback interviews are a great way to gauge the effectiveness of your sales process, along with your marketing, lead qualification, product, and more. No one can give you this information in a more direct way than your customers (potential or actual).

 

To make the most out of the interview process, you need to repeat it with multiple prospects and look for overlap. This makes it critical to have a reliable and consistent interview process in order to eliminate as many variables as possible. If you perform it correctly, the feedback interview should give you a ton of valuable insight to improve your organization. 

 

Why is it Important to conduct?

You cannot perform a win/loss review without interviewing prospects. It’s tremendously helpful to hear the reason for the win or loss from the proverbial horse’s mouth. This provides a whole new angle you would otherwise always miss. 

 

These valuable insights can help your team improve the sales process and increase their win-rate. Feedback interviews are one of the best ways to identify weaknesses in the process and fix them so you can get better numbers next quarter. 

Improving your team’s win-rate is great, but for a SaaS business it’s often important to have a high retention rate, as well. Prospect feedback interviews are a great way to collect customer impressions and work on the product features. 

 

Finally, it’s a great way to determine the effectiveness of your organization’s lead qualification process. Good lead qualification means your team is only focusing on worthwhile prospects and not wasting time and effort on fruitless pursuits. Gathering more prospect feedback will allow you to improve your overall pipeline management and take your sales to the next level.  

What are the goals of a prospect feedback interview?

Prospect feedback interviews are a great tool to gather impartial insight into your organization from the outside. However, this is impossible to achieve unless you set the proper goals first. You won’t (or at least shouldn’t) approach a won opportunity and a lost opportunity the same way. The goals are going to be different.

Goals of Interviewing a Won Opportunity

Asking someone who’s already chosen your organization what informed their decision may seem counterproductive at first. However, learning from your wins is just as valuable as learning from your failures.

 

Interviewing a paying customer allows you to see your entire process through the eyes of someone who has completed your entire sales cycle. The interview will reveal: 

 

• Why they chose your organization – what was it that convinced them you were worthy of their trust?
• What part of your message reached them – this will provide useful feedback to marketing and help fix the misalignment between sales and marketing
• Find out if there was something that could’ve prevented them from choosing you
• Learn how they heard about your organization 
• Identify your customers’ most important pain points and further improve your product
• Find the feature or benefit that ultimately won them over 

 

All of this information will help you refine the best parts of your process. Once that’s done, you can focus on implementing the most effective strategies and drop the rest.

Goals of interviewing a Lost Opportunity

Interviewing a lost opportunity is much more complicated. You’re trying to get information out of someone who decided not to choose your organization. The intrinsic challenges that come with this condition cannot be overlooked. A very small percentage of prospects would even consider spending time on a company that wasn’t their top choice. This interview would be a race against the clock so you need to make every second count. You need to be clear on what you’re trying to figure out: 

 

• What were their decision criteria and where did you come off short? This can help you identify potential weaknesses in your sales process that may be negatively affecting your win-rate
• What was their overall experience with your sales team? Whether they only talked with one or several reps, you need to understand why it didn’t work out. Could be that:
  • Reps weren’t attentive enough
  • Reps were selling too hard
  • The lead wasn’t properly qualified
  • Your value wasn’t communicated properly so the price seemed too high
  • Reps over-promised in the sale and under-delivered with the demo
• What did your competitor offer that you didn’t?
• Was there a way to change their minds?

 

Learning all of this would not be easy without compiling your list of questions beforehand. You will only have a few minutes of the prospect’s time so make them count. 

Who should conduct the prospect feedback interview?

Now that the goals are clear, the question remains – who should conduct the prospect feedback interview? Should it be someone on the team or should you outsource it? We’ll cover some of the characteristics that make a good interviewer so it will be easy to figure out if you have someone like this in your company or you need to hire a third party representative.

What makes a good prospect interviewer? 

The interviewer needs to remain impartial and not get defensive, especially if they are interviewing a lost opp. Right off the bat, this disqualifies the AE responsible for the deal because many prospects will not be candid about their experience.  

 

The interviewer needs to be familiar with your organization and sales process. If you hire a third party, they should have experience with companies such as yours to make it easier for them to get in the loop. 

 

Other than being familiar with your organization, a good interviewer should:

 

• Be a good listener
• Have the ability to communicate with high-level executives
• Be capable of leading engaging meetings
• Know your product, customer pain points, USPs, ICP, competitive advantages, and more
• Be persistent without becoming annoying
• Be able to pinpoint the exact reasons for success or failure
• Be capable of reading between the lines
• Have the ability to process large amounts of information and turn them into an actionable process your organization can realistically implement

 

The most likely candidates within your organization would either be from marketing or customer support. They have the biggest proclivity towards understanding customers without being directly involved in the sales process. However, if you don’t have the right person on staff, it’s better to hire a third-party contractor so the job gets done properly. 

What critical questions should you ask?

There are many questions you should you ask during a prospect feedback interview. Depending on your goals, you will ask different questions, but here’s the top 5 that are absolutely crucial to ask, regardless of the closed deal’s status. 

1. How well did we tailor our presentation to your needs?

Why should you ask this: This an important question to ask because whether you won the deal or lost it, it’s critical to understand if you presentation satisfies what the client was expecting to see.  This is a fundamental part of the sales process and something that needs to be continually evaluated. 

1. Do you feel our sales reps could have done a better job listening to your needs? 

Why should you ask this: Good salespeople listen more than they talk. In order to properly establish the needs of the client, your reps need to listen first. Leaving the customer with the impression they were listened to is a great way to make them feel more important, which is a sure step towards winning an opp. 

1. What ultimately informed your choice? 

Why should you ask this: Understanding the way your prospects make their choices is the best way to influence those choices. 

1. How did our process compare to our competitors?

Why should you ask this: You shouldn’t be overly worried about what your competition is doing. That being said, it’s also a good idea to have some insight into their process. You can get some good ideas from the answers to this question. And you can gain additional insight into what your prospects are looking for in a business.    

1. If you could change one thing in our process, what would it be? 

Why should you ask this: It’s by far the easiest way to get people to tell you what you need to fix in your process. Or at least what you can improve. Pay close attention to this question’s answers. If there are any points that repeat across multiple interviews, then it definitely warrants an investigation.

 

We’ve prepared a full interview template you can download. 

Conclusion

Prospect feedback interviews are a great way to supplement your analytics so you can improve your sales process, win-rate, and indeed your product. It’s the matrix you can use to peak into the minds of your prospects so you can take your sales to the next level.

Introduction

A win/loss analysis is a great way to evaluate your product and sales process in a clear and  impartial manner. There is no better way to gauge where you stack up against the competition, whether your marketing points are landing with your ICP, or if you’re conveying your USP effectively. Win/loss analyses are a gold mine of valuable information, yet fewer than 20% of companies perform them. 

In this article we’ll:

• Explain what a win/loss analysis is
• Give you practical tips on performing it the right way
• Demonstrate why it’s so useful

What is a win/loss analysis?

A win/loss analysis in sales is a meeting where the outcome of specific handpicked deals is discussed, usually by the sales team and leaders. Sometimes, product managers, marketing managers and account executives whose deals are being discussed are also present in the meetings. The goal is to learn from these deals. Both wins and losses can be used. 

When done right, a win/loss analysis can help improve product features, conversion rates, win rate, team efficiency, and more. Sales leaders can use these meetings to improve the entire sales process, coach their reps, gauge which USPs are most important to the customers, and what might be lacking in product features.

Going even further, these meetings can reveal problems brewing beneath the surface and help improve the numbers moving forward.  While analyses can be extremely valuable, but you need to pick the right deals to extrapolate actionable insights and the meetings need to be conducted the right way.  The question is how? That’s what we’ll explain in the next few sections. 

How to Pick the Right Deals for Analysis

Picking the right deals for win/loss analyses will set the right context for the meeting. To make it practical, the deals should conform to certain characteristics, such as: 

• Deals should involve your ICP – this way, you’re excluding peculiarities and outliers, which makes it easier to focus on trends and important changes
• Deals should have a significant ACV (annual contract value) – the reason for this is you want to focus on deals that are significant wins or losses for your organization
• Deals have to be closed (won or lost) – you want these deals to represent your entire sales cycle so you can get a look at the big picture
• Sales leadership should pick the deals – the sales leaders should have a good understanding of the deals. They should be able to choose useful deals for analysis

Picking the right deals will be the difference between a useful win/loss analysis and a meeting that’s wasting everyone’s time. The wrong deals may send you on a wild goose chase at best and ruin something that’s working at worst. 

Choosing the right deal and gathering useful data will ensure that doesn’t happen. You can always count on data to show you the full picture. 

Who is Responsible for Picking the Deals? 

Generally, top sales leadership is responsible for picking the right deals. They often heed the recommendation of first and second line sales manager and in some cases, even the AE’s.

One of the main motivations in choosing a certain deal is so that it can showcase the challenges your organization is facing. Sales leadership is well aware this adds value by either demonstrating those challenges so they can be addressed in the future if the deal has been lost. Or by showcasing how the challenges were overcome.

What Kind of Data Should You Gather?

Data is an essential part of every practical analysis and in/loss meeting is no exception. Data will provide legitimacy to the claims and make the review more objective. Here’s the data you will need to perform the analysis properly.

Sales activity

Sales activity represents the actions of your reps during the sales cycle. It typically includes:

• Calls
• Emails
• Meetings
• Demos

Sales leaders need the sales activity to evaluate the process for the win/loss review. They can use it to draw conclusions about the effectiveness of the sales process and the sales reps. This is the quickest way to reveal whether reps need more training or if there’s a need to change to the sales process. 

While sales activity is no doubt valuable, the perspective of your reps only gives you half the picture. To see the other half, you also need to gather data on the side of the prospects. 

Prospect details

The prospect details will show if your reps contacted the right people or not. The data will add more context to the deal. Here’s the relevant details you need on the side of the prospect:

• Name and title of the person contacted
• Company size
• Pipeline point of entry (opportunity source)
• Problem your organization attempted to solve

This data will give you a better look into who the prospect is. It might allow for additional insights into the deal outcome. 

To gather all this data, you need excellent CRM functionality and meticulous data entry. Of course, there are also easier solutions. Intuitive software systems like MoData can be easily integrated with your CRM and keep track of all of this (and more).

Prospect feedback

After getting the prospect details, it’s a good idea to try and arrange a feedback interview. The goal of the interview is to determine: 

• Why the prospect contacted your organization
• How they heard about you
• What need caused them to
• What did and didn’t work for them in your marketing and sales process
• What ultimately informed their decision to work or not work with you

Prospect interviews are the best way to receive direct feedback for your sales and marketing process. They allow you to identify common weaknesses in your approach. It’s important to make the interview standardized if you want to extract any real value. Adding prospect answers to the data will allow you to dive deep into the issues that may be brewing beneath the surface.

How Much Time Should You Spend on Win/Loss Meetings?

Even though win/loss analysis for every chosen deal is useful, you need to put in some time constraints in order to keep people on topic. We all know how easily sales meetings can spiral out of control and win/loss analysis is no exception.

You can make it an hour-long meetings and discuss 3-4 deals per meeting.

Usually, 15 minutes per deal should be enough. 10 minutes for presentation and setting the context, and 5 minutes for deliberation. We would highly recommend an AE to present the data and details about the deal as opposed to sales leaders (more on this below). The sales leaders and the team should then deliberate on the details and discuss the reasons why they think the deal was won or lost.

In order to make sure it’s easy for everybody to fit within their 15 minutes, every deal review should follow the same template. This will eliminate confusion and will make things easy to follow. Once people are familiar with the format, this is an extremely efficient way to conduct these meetings.

You should always leave 10 minutes at the end for Q&A and closure. Finalizing the meeting with a Q&A session will allow you to:

• Summarize your findings
• Plan for ways to improve
• Relay the information to the other stakeholders

Why Should AEs Be Involved? 

Many organizations consider Win/Loss reviews to be a sales management discussion, precluding AE out of the loop. Even if they are part of the meeting they don’t get to (or at least not encouraged to) participate actively. 

This is a big mistake. It’s highly recommended to allow the AE, who owns the deal being discussed, to lead most of the first 10 minutes of discussion. This allows: 

• AEs to provide full context. It adds the requisite color and background other participants  can get only when they hear it from the proverbial “horse’s mouth” 
• Presenting in such meetings helps AE’s a lot.
  •  If they are good it helps boost their confidence and give them the highly motivating visibility in front of a broader audience beyond sales, which often includes CXOs.  
  • If they are not good, it provides a great insight into training opportunities for such AEs. Let’s look at it this way, you would rather have them fail in from of internal audience than in front of prospects /customers, right? 

If you are too worried about your AE’s making big mistakes and wasting everybody’s time, it’s often advised to have a “pre-meeting” with some sales team members. This meetings allows you to ensure the message the AE’s presenting is to-the-point. Added bonus is the AE gets a dry run to calm the nerves down a bit. 

How Often Should You Conduct Win/Loss Analyses?

Now we are clear on the recommended length of these meetings, but what about frequency? How often should you conduct a win/loss review? 

This would depend on the average length of your sales cycle. The longer your sales cycle, the rarer these meetings would be because you need valuable data and appropriate deals for review. That being said, at least once per quarter is a good guideline. However, don’t put too much emphasis on frequency. The important thing is to make sure these analyses are useful.

Don’t Forget to Review your Wins!

You learn as much from your wins as you do from your losses. So make sure you include some winning deals in the review. Follow the same general pattern, but this time focus on reasons why you won. 

While summarizing at the end of the meeting, juxtapose the reasons why you won with the reasons why you lost. See if something pops and you find an answer to the question “why you lost”. 

You would typically discover that one part of the sales organization is already employing some of the techniques your review concluded are winning techniques. This will be the difference between those who win and those who lose. Once you identify good practices in the analysis, double check with your high win-rate reps. You’re ought to discover they’ve been employing these practices all along.

It’s much easier to cross pollinate than to introduce new ideas in the sales team. Don’t miss the cross pollination opportunities by not reviewing your wins.  

Also, talking about wins is pretty fun!

How to Make the Win/Loss Analysis Useful

There is more to a win/loss analysis than gathering the data and talking to the prospects. To make it truly useful, you need to be practical.

Allow the sales rep or AE present the deal and its details. Double check with the data to make sure any subjective bias is eliminated.

Next, discuss the deal and try to identify specific reasons why it succeeded or why it failed. Some common reasons for failure include:

• Pushy sales reps
• Discrepancy between perceived value on the side of the customer and actual value
• Product or service does not fulfill customer needs
• Over-promise and under-deliver – marketing makes promises the organization can’t deliver on

During the Q&A, try to identify trends and document them. By the end, you should have a pretty good idea what works and what doesn’t. 

Based on those findings, formulate a plan to fix recurring issues. And remember: do not make win/loss reviews a blame session – it’s a coaching moment that should help your team grow. 

Win/Loss analysis can be great for:

• Determining any gaps between you and your competitors. Better features, easier installment, technical execution or lower prices – it’s a good idea to know where you stand in this regard.
• Validating assumptions about your product. It’s a good idea to know if al the assumptions you make about your product have any real basis.
• Creating a culture of transparency. Failures are inevitable and they need to be discussed, not swept under the proverbial rug. Being transparent about both wins and losses is vital for the development of the organization. It allows both to celebrate the wins and learn from the losses.
• Checking if your marketing is landing with the right audience. Win/loss analyses are mostly associated with sales but that doesn’t mean they can’t be valuable to marketing.
• Determining the quality of the qualification process. If it turns out too many deals are lost because they were qualified at an earlier stage when they shouldn’t have, then you have a qualification problem that needs to be taken care of.
• Strengthening the connection between Sales and Marketing. Lack of communication between these two departments is a critical problem which win/loss meetings helps you to address.

These meetings can be extremely beneficial all around.  

Conclusion

Win/loss analyses are a great way to identify problems in your organization, strengthen the connection between marketing and sales, and improve your sales process. Very few sales organizations perform them well, but those that do it in a practical way can only win from the experience.

Introduction 

Win rate represents one of the most commonly used success metrics for sales teams. It’s the north star metric. It’s meant to measure the efficiency of sales teams. Despite its widespread use and fairly straightforward conceptual makeup, win-rate calculations can be complex. There are actually multiple ways to calculate win-ratio. The choice of actual calculation depends on many factors including avg. deal size, sales cycle, inbound vs. outbound lead source and many more. The article seeks to explore different ways of calculating win-ratio and explain the rationale behind each of the calculations. 

How to Calculate Your Win Rate

Win-rate / win-ratio is calculated by dividing the number of sales opportunities converted into successful deals by total number of opportunities available to the sales team.

 

# of Opportunities Converted 

____________________

# of Opportunities Available

While the formula is simple, it’s the interpretation of numerator and denominator where things get complicated.  Let’s walk through some of the most common win-rate calculations used in the industry and explore them deeper. 

1. SQLs to Opps won

Win rate % = (Total amount of Opps won / SQL) * 100 

Often referred as “close rate”, this win rate is calculated based on the number of successful deals out of the sales qualified leads in the pipeline for a period of time. Measuring this type of win rate is important for identifying conversion problems or finding ways to improve your sales process. It’s not a universal method, though. Here are some pros and cons you should pay attention to:

Pros

• SQL to opps won win rate allows you to measure the quality of the generated leads
• Allows you to measure the effectiveness of your sales closers
• Enables the identification of qualification issues

Cons

• Encourages bad behavior / information hiding where your sales reps are incentivized to not create opportunity until they are confident they will close
• Requires pristine CRM management
• Difficult to measure if you have a longer sales cycle
• Average sales cycle length needs to be taken into consideration when making the calculations. For example, if your average sales cycle length is 2 months, you need to take the opps won in March and divide them by the opportunities created in January

When to Use

You use this method when you are confident that your SQL qualification criteria is “solid” i.e. 

1. Clearly defined 
2. Specific
3. Well understood by most of your reps 
4. Widely used 

If you do not have “solid” qualification criteria, you will end up penalizing your win rate by artificially inflating the denominator with “junk” opportunities which are not real. 

2. Opps won to opps closed

Win rate % = Opps won / (Opps won + Opps lost) * 100

This approach isolates the number of leads from the equation and only focuses on what part of the closed deals was Opps won. However, the results can be easily skewed, especially if reps aren’t keeping the pipeline CRM updated. 

Let’s say your rep Mr. Jones wants to increase his win rate this quarter. He can easily do so by leaving opportunities open in the CRM. Since opps that aren’t closed don’t affect the win rate, he can artificially inflate it to hide a deeper issue in his process. Which will affect other data and create an artificial bottleneck.

That being said, calculating the win/loss ratio can be beneficial if your reps are honest. It allows you to easily calculate your loss ratio and analyze those Opps lost. This can be a great way to improve your sales process. Here are some pros and cons of this win rate calculation method:

Pros

• Isolates average sales cycle length from the equation
• Allows you to calculate win/loss ratio
• It can help you improve the sales process by analyzing lost opportunities

Cons

• Ignores the total number of leads so it prevents you from identifying conversion problems
• Easily manipulated if deals remain open in your CRM

When to Use

This method is useful when you aggressively move deals to “closed-lost”. Typically, you need to have weekly pipeline reviews with reviews to move “stalled” opportunities to “closed-lost”. You should scrutinize any opportunity that’s been in your pipeline over 3x longer than your average sales cycle has had more than 30 days of no activity. Regularly identify stalled deals. 

3. Closed $ / $ in pipeline

Win rate % = (Total amount of $ closed / Total amount of $ in pipeline) * 100

This approach serves a dual purpose. First, it adds a bit of context to your pipeline potential. Second, it only focuses on the most relevant metrics. 

However, the overall win rate doesn’t tell you much unless it’s taken in with other factors. This includes sales reps and lead sources. Aggregate measurements give you a much more detailed picture. 

Pros 

• Easy to understand. Let’s face it – meeting and exceeding quota dollar amounts is usually the highest priority of sales leaders  

Cons 

• Hides the nuances that are important to get your sales strategy right. Let’s say you have 10 deals for a total of 100,000$ this quarter. You close 1 valued at 30,000$, so this gives you 30% win-rate according to the formula above. This is great, but it doesn’t explain why only 1 out of 10 deals were closed. The 30% win-rate in this example might be hiding deeper problems within your sales process.

When to Use

This method of calculating win-rate is useful for a small subset of sales teams. These teams mainly work with longer sales cycles and larger deal amounts ($500,000+), so it’s important to know what $ amount of their pipeline they’re closing.

Cohort Specific Win-Rate 

What is a Cohort?

Cohorts are groups of people who share common characteristics over a period of time. For example, customers who signed up for premium software features in May. Segmenting your customers into cohorts allows you to account for the differences between the groups.

Different types of cohorts have dissimilar needs, use your product in different ways, have varying deal sizes and sales cycles. Accounting for these types of cohorts allows you to isolate certain variables. Below are some typical SaaS types of cohorts.

Types of Cohort

You need to define the cohort 

• Based on signup date 
• Based on feature usage 
• Based on persona or use cases 
• Based on lead source 

The main benefit of cohort-based win-rate is that it allows for peculiarities of different cohorts to be separated from each other. This separation allows for a more meaningful win-rate comparison over time. Without cohort specific win rates, the cohorts might balance in a way that conceals all the leading indicators of trouble within different groups. By performing a cohort-specific win-rate analysis, you can be sure the calculations are accurate. 

Pros

• Allows for clarifying the differences between cohorts
• Enables a more detailed win-rate analysis
• Isolates unwanted variables

Cons

• Not suitable for organizations with a smaller number of deals

When to Use

If your business is transactional and you typically deal with a large volume of opps, you might want to use different win-rate calculations per cohort. You ought to consider the idea that the very nature of opportunity flow in different cohorts are too different to be combined together. 

This method however only advisable when you have a high volume of deals  for you to extract meaningful data. Which severely limits its use for some organizations. 

Other Factors 

CRM Features 

In order to process all the data required for a cohort analysis or calculating win-rate as a whole, you need some powerful CRM features. For example, if you want to calculate the win-rate that takes into account the number of SQL in the beginning of the quarter, you need to create a snapshot of your pipeline during that time so you can later compare.

Tools like MoData make this process a lot more seamless. With historical data, you don’t have to manually create snapshots and then compare them. The system does it for you and saves you a ton of time you can use for sales instead of data entry. 

The software saves you even more time when applied to cohort analysis. This is especially true when it comes to create date and closed date cohorts. The features allow you to isolate those cohorts in a few painless clicks, making the analysis a breeze.

Create Date vs Closed Date

Cohorting based on create date or close date allows you to closely monitor the dataset over a predetermined period of time. This is especially useful when you have an influx of new salespeople and you want to see how they’re doing. These cohorts are also useful when you’re making changes to your sales process and you want to measure the results. Below you will find out how to use each one. 

Create date

Create date cohort is segmented based on the date the opportunity has been created. For example, a cohort would be all opportunities created in July. This cohort is perfect when:

• You’ve made changes in your sales process and you want to measure the win-rate after you’ve made those changes. By measuring the win-rate of opps created after the changes were made, you decontaminate the results
• You want to compare seasonal changes or yearly growth

The drawback is the lag is proportional to the length of your sales cycle. In other words, the longer your sales cycle is, the longer it takes to see all the effects. You need to keep this in mind, especially if you’re testing changes in the later stages of your sales cycle. 

Close date

Close date segments all the opps that were closed during a set period of time. For example, all deals closed in September (regardless whether won or lost). This cohort is useful when:

• Makes it easy to calculate your win rate
• Useful diagnostic tool for the late stages of your pipeline

The close date cohort ignores open deals which makes it extremely easy to manipulate. All your reps have to do is leave the opps open and they will artificially inflate their win-rate. Unless you’re using tools like MoData, it will be difficult to identify those deals and get them to close lost.  

How to use Win Rate

You can use win rate in several ways. It’s a very powerful metric when you’re trying to improve your sales numbers or you’re trying to predict your numbers for the end of the quarter.

• Pipeline – knowing your win rate allows you to figure out how many leads you need in pipeline to match your quota. If your win rate is 10%, you know you need 10 times your target in number of leads. Makes it relatively easy to predict whether you will reach your goals 
• Forecasting – in the same vein, win rate can help you improve your sales forecasting. If your reps give you a forecast which is relatively higher than their win rate, it may mean that they are overly optimistic. Optimistic reps overcommit. And their win rate can suffer further
• Benchmarking – keeping a consistent understanding of what win rate is can allow you to benchmark your team’s performance year to year. Furthermore, you can benchmark it against other players in your industry to get a feel of how well you’re doing compared to the competition
• Identifying the weak links – knowing the win rate of different reps allows you to identify the weak links. Once you do, you can actively coach them so they can improve
• Compare lead sources – based on win rate, you can identify lead sources most likely to close 

Conclusion 

Consistency plays a key role in win rate. You need to establish a baseline for at least a year (maybe more if you have a long sales cycle) before you can use the data. This way you can isolate seasonality out of the equation.

Introduction 

Achieving forecasted funnel conversion is a real challenge for most sales teams. In fact, according to CSO’s 2018 Sales Operations Optimization Study, on average, 60% of all deals forecasted by reps in the beginning of the quarter do not end up closing after all. This leads to unreliable forecast and end-of-quarter scramble along with budgeting issues.

Most sales teams forecast end-of-quarter results based on certain sales funnel conversion assumptions. Since a great majority of sales cycles are more than 2 months, final end-of-quarter sales results depend on the state of beginning-of-quarter sales pipeline and sales conversion assumptions, sales results will be off compared to sales forecast if conversion assumptions actually do not materialize. 

While accurately predicting the amount of slack in the process is really difficult, sales managers can rely on some metrics which act as a leading indicator for any such problems brewing in their sales funnel . 

The rest of the article: 

1. Describes leading indicators 
2. Offers tips about calculating such indicators, and 
3. Recommends techniques to systematically address such conversion issues mid-quarter 

Leading indicators of imminent sales conversion problems include 

• Activity Conversion Rate and Customer Engagement
• Pipeline stage conversion rate
• Opportunity source

Figuring out the leading indicators of your sales funnel conversion metrics is one of the most crucial aspects of improving the health of your pipeline. 

Activity Conversion Rate and Customer Engagement

Activity conversion rate measures how many operations and interactions your reps perform before they close a deal. These operations include number of emails, number of calls, number of meetings, etc.

For example, the historical average for a lead reaching the demo stage is 12 emails. Knowing this allows you to figure out there is a problem if that number suddenly jumps to 16. The increase in activities would result in a longer sales cycle which will negatively affect your end of the quarter outcomes.

Customer Engagement

Activity conversion rate measures actions on the side of your sales team. On the side of the customer, you measure customer engagement metrics (time until customer replies, tone and length of replies, etc.).

Customer engagement is more difficult to quantify than other metrics. As a result, many sales people completely neglect measuring engagement. However, once you start collecting data, the emerging trends will make it a lot easier to judge all the opportunities in your pipeline and remove the ones that are less likely to be closed won.  But what should you pay attention to? 

Here are some activity conversion and customer engagement metrics you should be following: 

• Number of stakeholders contacted – allows you to figure out how many stakeholders you need to contact before you supply the funnel with enough leads to reach your targets;
• Frequency and quality of the communication – how often and how well prospects are responding is a great indication of their interest;
• Length of communication – longer is usually better as it suggests more questions and detailed explanations;
• Customer attitude – negative attitude can rarely be turned;
• Number of meetings with decision makers – how many meetings you need with decision makers before you close the deal;
• Number of demos presented – how many demos you need to present before you close the deal;

All of the above are leading indicators of conversion rate problems. Measuring them allows you to gauge the quality and quantity of your pipeline. 

How to Use Activity Conversion Rate as a Leading Indicator

Ask yourself questions about each measurement. Questions, such as:

“Based on my average conversion rates (more on this below), have I contacted enough stakeholders to reach my targets?” If the answer is “no”, contact more stakeholders.

“Have I set up enough demos to meet my quota?” If the answer is “no”, work towards setting up more demos.

“I’ve sent this customer double the average number of emails based on our historic average. Should I take them out of the pipeline or should I change my approach?” 

“Have I arranged enough meetings with decision makers this quarter?” If not, then get to it. 

Answering such questions will give you a much better insight into the condition of your pipeline. Armed with this information, you won’t have to wait for the end of the quarter before you can make adjustments.

Measuring all of these metrics can be time consuming. Not to mention difficult to interpret. However, there are a few state-of-the-art predictive sales forecasting tools on the market, including MoData that help you take communications related factors into account. 

Pipeline stage conversion rate

Conversion between the pipeline stages is one of the most important leading indicators of end of quarter results. Historical averages tend to hold true unless there is a substantial change in how your business operates. Typically 1 year worth of data is what you need for this purpose. One year data is adjusted for seasonality of your business, buying cycle, rep-churn, etc. 

Let’s start by introducing the most typical pipeline stages: 

• MQL – Marketing thinks its a good lead so they send it to sales;
• SAL – Sales accepts the lead (because it complies with some historically matched criteria);
• SQL – Sales has a meeting with the customer and after the meeting they still think it’s a good lead (generally they will use a criteria called BANT or MEDDIC); 
• Opportunity – Establish a criteria to close this deal. Estimate close date;
• Demo – a demonstration of the product; 
• Legal / Contract signing; 
• Won Opportunities – The deal is successfully closed;

The CR in each stage indicates how well you will probably do at the end of the quarter. By applying the conversion rates to the number of leads in your funnel, you can easily figure out a prognosis of your end-of-quarter numbers. 

Now that we’ve introduced the definitions, let’s delve deeper into how to use the conversion rates between the stages as leading indicators.

How to Use Pipeline Stage Conversion Rate 

Here’s how to use these metrics to improve your sales numbers. Identify the weaknesses in your sales funnel by looking at the conversion rates and time in stage for each stage. This way you can determine where your leads are falling off and look for ways to improve in that stage. 

Some of the most common funnel conversion issues typically experienced by sales team include:  

More leads than usual falling out after the demo?

• You need to improve your demo.  
• The problem might be caused by new reps who need better training.
• The product has changed but the training hasn’t been updated.

 Reason can be different but you need to pay attention to this. 

Less  leads than usual are  moving along after the first contact? 

• You probably need to improve prospecting criteria used as you marketing team is targeting the wrong persona.
• Your MQL criteria needs to be tightened.

Less opportunities than usual are converting after the proposal?

•  This typically points to over-promise and under-deliver scenario. Your price is higher than the perceived value of your offering by the customers. Common issues include:
  • Demo and POC issues where customers did not perceive value;
  • Complicated pricing structure; 
• Pricing is too high for the customers use case; 
• The issue might be in qualification where your sales team did not establish need or budget properly before sending the proposal;

Are leads spending more time than average in the opportunity stage? 

• This indicates a bottleneck and you should focus on removing it. 

As you can see, measuring these conversion rates gives you a much clearer picture of your sales pipeline. You can use these metrics over the course of several years and keep track of how you’re doing year-to-year and trying to improve them. If you’re having a hard time tracking all of this data systematically, pipeline management tools become your best friends! 

Opportunity Source as a Leading Indicator

Opportunity source is a great leading indicator of pipeline conversion rate problems. Opportunities originating from different sources tend to have different pipeline characteristics. For example, an inbound lead will typically move faster through the funnel than an outbound lead.

When you calculate historical metrics related to opportunities belonging to a lead source, you can get an idea about how your current pipeline is likely to behave. A higher than usual number of leads from sources that take longer to close is sure to cause problems in meeting your targets at the end of the quarter regardless of your conversion rates. The same dynamics applies to other metrics which depend on lead source. 

Lead source tends to affect conversion rate, size of deal, sales cycle, and more. Here are some common lead sources you are likely to encounter : 

• BDR prospected;
• SDR qualified;
• Inbound marketing;
• Trade shows/special events;
• Referral;
• Partner;
• PR;

You need to know how long it takes you to close leads from each source. Determining the sales velocity will be vital if you want to project your end-of-the-quarter results early on. It will allow you to adjust midway through the quarter before things get too out of hand and you fail to meet your target for the quarter 

How to Use Opportunity Source as a Leading Indicator

Knowing the speed with which leads move through your funnel based on their source allows you to make data-driven decisions in regards to your targets. 

Timing is an important consideration. If you’re already mid-quarter and it doesn’t seem like you will reach your goals, you can adapt by introducing more high-velocity leads to your pipeline. 

Make no mistake, tracking all this data is a ton of work. That’s why there are companies like MoData take these metrics and translate them into useful action-ready information. Forget about sifting through excel sheets. With the help of AI-powered tools, we make sorting out this data simple and actionable. We also enable powerful predictive properties so you can leave the guesswork at the door. 

Conclusion

Identifying and tracking the leading indicators of sales funnel conversion metrics isn’t easy. It takes time, preparation and processing power. However, it’s still essential. Without it, you’re playing the sales game with a blindfold on, with arms tied behind your back and on one foot.

If you think about it, your sales reps are a lot like like athletes. Every time they are communicating with prospects, it’s the same as an elite athlete playing in a Monday night game or competing for the gold. This is because there is a clear winning and losing aspect to sales, a clear differential between natural talents, and the need to execute a game plan under high pressure.

Once you start thinking of your sales team as a sports team, it opens up many avenues of how you can coach and help them improve. One fantastic way that is often overlooked, is the use of sports psychology to drive sales rep performance.

Why Sports Psychology Works for Sales

Peak athletic performance is comprised of two elements – body and mind. Obviously for sales reps, the physical aspect is going to have a limited involvement. The mental game however, is a truly critical component of driving your sale team’s performance, which is why they can seriously benefit from sports psychology.

Sports psychology is the science of maximizing the mental performance of athletes and thus can also be used to sharpen the mental game of your sales team. And no, you don’t have to be a licensed sports psychologist to pull it off either. Although there’s hundreds of techniques to improve the effectiveness of your sales team, for this article we are going to focus on three of them:

1. Optimal Performance Zone (OPZ)
2. Precognitive Planning
3. Goal setting (the right way)  

The Optimal Performance (Selling) Zone

The optimal performance zone is something athletes use to define their state of mind where they perform their best. For some people it may be super hyped up while for others it may be incredibly calm. Once they have this mental state identified, they practice consciously adjusting their mood to match their OPZ during pressure situations.

Music is often used to enhance performance by putting athletes in the zone. They aren’t just jamming out, they are engineering their mental state.

Typically, most people are not conscious about their OPZ but still try to influence how they are feeling (e.g. calm themselves down when nervous). As such, the first step is to work with your sales reps to find out what their best personal mental state is during sales calls, demos, and other significant points of communication.

You can do this through discussion, studying past experiences, and specifically reviewing calls for this mental state going forward. Believe it or not, it doesn’t usually take long for people to figure out what mental state they personally need.

Once your rep has their OPZ figured out, guide them on identifying times that they should be checking their mental state. Over time, it will become second nature for them leading to a strong and consistent performance increase.

Precognitive Sales Planning

This technique revolves around mapping out mental reactions to specific situations ahead of time before they occur. Most sales teams have something like this already in the form of objection handling and sales playbooks, however this takes it a step further – deciding what you want to think and how you want to feel when specific high-pressure situations occur.

Using an elite swimmer as an example, this technique would be used to control all mental reactions during the course of the race by establishing:

• What will I think about if I see that I’m winning?
• What will I think about if I see that I’m losing?
• What will I think about if I make a mistake?
• What will I think about if I haven’t made any mistakes?  

The list of scenarios goes on and on.

Applying this to a sales call, together with your sales rep you decide ahead of time how you want them to react to every situation you can think of. How should you react if they are interested? What about not interested? Asking no questions? Asking a lot of questions? Talking quietly? The point of mapping these out, is to leave nothing up to the moment. The performance becomes methodical, planned, and executed according to plan.

It seems like it would be difficult to remember all of these, right? Wrong. You don’t need a level of detail that dips into exact words or anything that would take memorization. It’s about attitude, emotions, and mental state. Something like “I’ll start off making some jokes and if they are responding well I’ll still tone it down for the explanation of this first feature, but then I’ll throw in another right after. If they aren’t responding to my attempts at humor though, I’ll stay confident and not get offended, but I’ll switch over to a more logical/intelligent tone.”

Why Does This Work?

The reason this works is because when an individual comes under pressure, their natural first instinct is to revert to what they know. If there is thought done ahead of time, they will automatically default to it without even needing to think about it. If there isn’t anything concrete to fall back on, it becomes up in the air how you will react. You may stay a failing course when you should improvise, you may improvise when you should stay the course, you might start talking quietly or too quickly, etc. This technique controls all of that and provides a much more consistent execution with greater results.

As added value, we have found this to be an incredible sales meeting topic that inspires critical thought and discussion. Sales meetings are a fantastic place to get your team motivated just like in the locker room before a big game. We won’t go any farther into sales meetings during this article, but you can check out this read on more sales meeting ideas that inspire and motivate your team if you are interested.

Effective Goal Setting for Sales

Goal setting is paramount to performance. Goals give us consistent purpose and act as a thought-out guiding star at all points in time. Without goals, we lose direction and are easily swayed day in and day out by the unpredictable nature of life, especially sales. But what makes elite athletes’ goals different from the average person? There are two main factors: depth and structure.

Depth of Goals

Effective goal setting used by elite athletes focuses on setting large ambitious goals that are then comprised of smaller goals designed to guide along the way. They have goals for the year, the week, the day, and even goals for every individual turn they take at practice. The best part? It’s not as difficult as it sounds like it would be. The strategy is that every piece of time you spend is driven by purpose and the desire to improve. These micro-goals are components of the larger goals and the structure continues all the way up (e.g. daily goals are components of weekly goals, which are components of monthly goals, which are components for quarterly goals, etc). So, what does this look like for a sales rep? An example would be as follows:

• Ambitious goal: Make sales manager by next year
• Quarterly goal: Increase the amount of sales communication activities by 30%
• Monthly goal: Send twice as many follow up emails as last quarter’s monthly average
• Weekly goal: Send 1/4th total number of follow up emails I need to hit my monthly average
• Daily goal: Send follow up emails after every one of my calls today
• Micro goal: Write a post-it note after this call to set a reminder in my CRM

Structure of Goals

Notice anything peculiar about the example goals above? Only the ambitious goal relies on external factors to succeed. The rest of them are completely within sales rep control.  This is incredibly vital to successful goal setting at an elite level. Simply setting goals around things like “close more deals” or some other result doesn’t work because it’s not completely under the individual’s control. Instead, goals should be 100% based on factors that are completely under your control to achieve. This puts all of the responsibility on yourself which is actually an extremely positive thing. When our success is completely up to us, it inspires and motivates us to succeed far more than relying on outside factors. Goals around sales activity levels are great candidates for this type of structure.

As an example, imagine if your goal is to close one specific huge deal. You work tirelessly going above beyond for this deal and it seems like it’s going great. However, right near the end you find out your key sponsor has a falling out with leadership and walks out of the company. Shortly after, they let you know the company’s interest in you was tied to the person that left and they no longer want to pursue a partnership. Aside from being an already devastating loss (because you are driven to win!) you now have also failed yourself by not achieving your goal and even though you did everything right, it wasn’t even up to you in the end. For most people, this is an extremely demotivating situation that hurts your drive and drains the spark right out of you.

If we play through the scenario once more with more effective goals however, it begins to look a bit different. This time around your goal was to be more conscious about objection-handling and use the techniques your manager has advised you on. The desire to win the deal is still exactly the same because winners love to win, but now you are focused on actually improving your selling performance. Even when the deal ends up going south due to the falling out, you can look at your own goals and find success even in failure. Does it still sting to lose the deal? Absolutely. But you improved your technique and thus improved your chances of winning the next deal. This failure has now actually flipped completely, from a demotivating scenario into a motivating one. Now you can build off of your progress and look to become even better at your selling technique on the next deal. You know that every time you achieve your goal to improve, your chances of winning just increase more and more, rather than “well… I guess its just not always up to me”. Finding success in failure is what allows elite athletes to do incredible things. It’s why they can work so hard with such abandon, never losing focus and never giving up.  

Your Mind is Always a Factor

Regardless of how well your first attempt may go at using these techniques, your team will have their eyes opened up to this aspect of their performance. Whether we choose to acknowledge it or not, our minds are always at work. The first step to mastering your mind is simply opening up to the idea that it can be improved and that your mind plays a role in your performance no matter what. You can either choose to master it and reap the benefits or let it run wild. But for any sales team that wants an edge, this is your next place to start.

Sales can be boring sometimes. It’s not always glamorous and exciting, and it rarely makes it onto the big screen in theaters.

And learning new sales techniques isn’t usually much fun either. Sometimes they can be long boring lectures or books. But what if a sales rep could get better at selling just by watching popular movies and listening to music?

While Hollywood doesn’t intentionally create entertainment for the purpose of coaching sales reps, there are still nuggets of wisdom that sales reps can use in their day-to-day pursuits. Here are ten examples of pop culture references sales managers can use to teach valuable sales techniques to their team.

1. Star Wars Episode IV: Sometimes Go Off-Script

One of the most well-known franchises in movie history is George Lucas’s “Star Wars.” Even after more than 40 years, people will still return to watch Episode IV: A New Hope and get excited to watch as a small team of pilots attempt to take down one of the most powerful weapons in the galaxy.

In the final moments of the movie we see the protagonist of the film, Luke Skywalker, look into his targeting computer to help him fiugre out when and where to fire a proton torpedo to destroy the Death Star. As he is racing down the trench to the target, a voice calls out to him. His mentor, Obi Wan Kenobi, speaks to him from the grave and says, “Use the Force Luke. Let go, Luke.” Heeding his mentor’s advice, Luke shuts off his targeting computer and uses his innate abilities to successfully destroy the Death Star.

Sales reps sometimes will be tempted to follow script. They will switch onto a “targeting computer” which will tell them exactly what to say and do. This doesn’t always work! Sometimes, a sales rep needs to go off script. Sometimes they need to trust in their abilities and say or do things that are not contained within the sales playbook.

Build confidence in sales reps so that they will feel like they can experiment with their own skills and methods. Of course, don’t let them lose sight of the target! Sales reps need to stay on target even when they call upon the force to guide them in closing sales.

2. The Matrix: Challenge Prospects Worldview

Who can forget one of the most iconic scenes in all of movie history? The pill scene is a moment where Neo meets Morpheus and Morpheus holds out two pills; one blue, the other red. But the scene doesn’t open with the choice between the two pills just yet.

It first begins with an ominous lightning storm, where Neo is ushered into a dark room. After Morpheus gives Neo a cryptic greeting, he begins asking Neo a series of questions. These questions force Neo to realize thoughts and feelings he never fully expressed before. He then educates Neo about the Matrix, and challenges Neo’s perceptions of the world around him. Then Morpheus offers the choice. The blue pill will keep things status quo, and the red pill will reveal just how deep the rabbit hole goes.

Morpheus is a master salesman. He doesn’t open with a pitch about the Matrix and then asks if Neo is interested. No, he does a lot more than that. He first greets Neo and then begins asking questions to understand how much Neo knows. From there, Morpheus becomes an educator. He challenges Neo’s perspective and shares knowledge that entices Neo to take the red pill.

Train sales reps to become educators, not pitchers. The first meeting a sales rep has with a prospect is a critical moment in the sales process. If sales reps begin by asking questions, they will know what bits of information will be most valuable to the prospect. From there sales reps can offer the choice between the red or blue pill. And if the sales rep did a good job educating, who wouldn’t want to take the red pill?

3. 2 Chainz – I’m Different: Focus on Differentiation

Count the number of the times the phrase “I’m different, yeah I’m different” appears in this song. It’s repeated frequently enough that it gets the message across that 2 Chainz is different, and anyone who listens to his song is also apparently different.

With over 86 million views on YouTube, this music video certainly expresses individuality across millions of viewers. What makes 2 Chainz different from every other rap artist? Who knows.

What makes your company different? If the answer to this question is the same for my answer about 2 Chainz then it’s time to reevaluate the unique value proposition for the company. Differentiation is a key concept when selling. If a company offers the exact same services as another then what is stopping a customer from going with the competition?

Differentiation supports an educator mindset. It makes prospects consider the benefits and perks of your product and service over the competition. This differentiation can be the wedge that pries open a customer’s interest.

When engaging with prospects have sales reps focus on differentiation. Let customers know what unique value you’re bringing, and if sales reps forget then play 2 Chainz in the office to help them remember to focus on what makes your company different.

4. Freedom Writers: Make Prospects the Hero of the Story

We tend to focus on being an educator when selling, and this next pop culture reference is about an actual educator. The “Freedom Writers” is a story about an English teacher who is asked to work at a tough High School. In the beginning the teacher struggles to connect with her students, but as time progresses the students open up and share personal stories that touch the audience.

The protagonist of the story is the English teacher, but she is not the focus of the story! It is fascinating to see how the whole story revolves around the students and their development. The writing behind this shows how even characters who aren’t the subject of the film, still have stories to tell and each of them views themselves as the hero.

This is the same situation with sales reps and prospects. Sometimes, sales reps tend to share the company or products story and then they have prospects be side characters in that story. But prospects have their own stories too, and they see themselves as the heroes of their own story.

Sales reps need to understand the story of their prospects, because then they can see how what they’re selling is something that will benefit their prospect. Ask questions like, what are your goals? Where do you hope you’ll be in five years? What do you think you need to reach those dreams?

5. Jaws: Track the Progress of Prospects

The second hit from the 1970s to make the list is the reason why so many people are afraid to go swimming at the beach. “Jaws” is an all-time fan favorite. It became so popular that theme parks made rides revolving around it.

In the story, a trio of hunters set out to catch a giant shark aboard a rundown boat. That was their first mistake, because soon the hunters become the hunted. Prior to the shark turning around the situation, the three originally had a decent plan. They would hunt the shark using bait, then once the shark appeared, they would fire a harpoon that was attached to a floating barrel. The first few times are successful, and it’s because of the floating barrel that the men aboard the ship are able to chase after the shark.

In this situation, sales reps are the hunters and prospects are the shark. Sales and marketing throw bait out into the water and wait to see if anyone shows up. Once that happens sales reps are quick to reach out and make contact. However, sometimes sales reps leave nothing behind. There’s no scheduled follow-up meeting, there’s no future actions set, and sometimes statuses aren’t updated in the sales pipeline. In essence, sales reps are firing harpoons at the shark but there’s no barrel attached to it.

What happens next is the prospect gets away. There’s nothing to track the prospect. They could dive under or swim away, and a sales rep would have no idea where to go searching for them. Morale of the story: set future meetings and discuss actionable steps prior to saying goodbye. And don’t go swimming in shark infested waters.

6. Sound of Music: Know the Desires of Your Audience

Who could forget the timeless songs in this classic film? Sure, the hills are alive with the sound of music, but my head is still ringing with their echoes even after a decade of not seeing the movie.

“The Sound of Music” is a film centered on a nun who comes to the home of a military man to watch his children. The father of the children runs his home like a military operation with strict rules and harsh punishments. That is until Julie Andrews enters the children’s lives and introduces them to singing, dancing, and fun. In one scene the father returns home to find his children in a rowboat that capsizes. He scolds his children and then faces Julie Andrews. Rather than apologizing, Julie Andrews gets back into the captain’s face and begins revealing to him the children’s wants and needs, all of which the father is failing to provide.

What does your target audience want and need? The answer to this question is constantly evolving according to market forces, but it is something sales reps should be constantly asking. This means engrossing themselves in their audience, reading blogs, discussing trends and issues, and most importantly listening to them.

Have you ever heard the phrase, “well that’s all and good, but what I really need right now is…” Sales reps’ ears need to perk up when they hear this, because in this moment the target audience is sharing with them a key detail that will help them sell to others better in the future.

7. Dark Knight: Let’s Put a Smile on That Face

Ask any comics fan to list the top five superhero movies, and almost all of them will place “The Dark Knight” on it. It’s almost universally accepted that Heath Ledger as the Joker was one of the greatest villains of all time. Christian Bale was good too, but everybody loves a good villain.

In one of the darkest scenes in the movie, the Joker comes face to face with a rival gang leader. Catching the man off guard, the Joker places a knife to the corners of the man’s mouth and begins telling him a story about the scars on his face. The Joker’s scars on the sides of his mouth form an awkward smile and according to the Joker, those scars were carved in by his father.

That’s a pretty creepy way to smile but there is something to be said about smiling. Data shows that smiling makes people feel like they can approach you. And as a sales rep, you want to be approachable.

This is a rather simple trick sales reps can learn. Just smile more—even when on the phone—and see if it doesn’t make a difference. Just don’t carve one on…

8. Pirates of the Caribbean: Always Move Towards the Goal

Jack Sparrow is one of the most charismatic characters ever seen on the big screen. His behavior marks him as a complete buffoon who borders on genius.

Perhaps Sparrow’s greatest tool at his disposal—aside from his uncanny luck—is his compass. The reason why is because Sparrow’s compass is special. It points him in the direction of the thing he desires most. From finding treasure chests containing the heart of an evil sea monster to a simple bottle of rum, Sparrow is always moving towards his desire.

Unfortunately, there is no such compass to guide sales reps to the ideal prospects. But the lesson here is that sales reps should never stop moving towards an end goal. From the first encounter with a prospect, a sales rep should be constantly moving towards a closed sale. Every interaction should move a prospect towards this end.

Sales reps should always ask themselves what the purpose of a meeting is and what direction they should be taking to reach that end goal, and then adjust meeting notes and plans to accomplish this.

9. Shrek: Don’t Oversell the Product or Service

“Shrek” brings a twist to the classic knight saving the princess tale. The noble knight is an ogre, and his noble steed is a donkey. Not quite the duo a princess would expect to save her. Oh, and the donkey can talk and has the unbelievably creative name “Donkey.”

Because Donkey can talk, we see him often talking too much. Sometimes that gets him out of trouble and other times talking gets him in even more trouble. In one such instance, a group of guards are rounding up fairy tale creatures to haul off to prison. Uncharacteristically, Donkey keeps quiet so nobody suspects he is a talking donkey. That is until a bit of fairy dust hits him in the head and he starts flying. Suddenly, Donkey can’t stop talking. Now he is a flying, talking donkey.

Of course, Donkey is only a talking donkey and his ability to fly soon wears off and places him in even more trouble than before.

Sometimes a sales rep wants to promise the moon to prospects. There are times, especially when trying to meet quotas or land a critical client, where a sales rep might start making promises that go beyond what the company offers.

This is dangerous territory. Sure, the product or service has certain benefits, but if it doesn’t solve all a prospect’s problems, don’t pretend like it will. What will happen is a prospect will buy in for a moment, and then quickly realize that their expectations aren’t going to be met.

Practice promise making with sales reps. What promises are within reason and what promises are outlandish.

10. Megamind: Presentation!

“Megamind” is a movie that really delves into the mind of a supervillain, and it turns out that the supervillain was a hero all along. This hilarious cartoon comedy plays with tropes and reveals how some villains can be good, and some heroes can be bad.

In the final battle, Megamind (the supervillain who is a good guy) faces off against Titan (the superhero that is the bad guy). In a stunning entrance, Megamind appears before Titan and calls him out for not being a supervillain. Sure, Titan is a villain, but in order to become a supervillain, Titan first needs to master the art of presentation.

Presentation is huge! How you presented will oftentimes be remembered better than what you presented. This is what separates a sales rep from a super sales rep. When presenting to an audience, think about how to make a lasting impact. Use props, practice using different tones and pacing when speaking. Just please, for the love of all that is good, don’t use a boring PowerPoint presentation!