Why Are We Satisfied With Poor Win Rates?
We struggle to hit our goals, make our numbers. Every year, we see decreases in % of sales people making their goals. At the same time, our solution to try to make our numbers is driving increases in volumes and velocity.
As I start peeling back the numbers, reinforced by data from the research firms, I start seeing win rates at 20% or less! We’re winning fewer than five deals we qualify!
When I challenge leaders about this, too often, they either: Don’t realize this is the actual performance; or shrug their shoulders, “It is what it is …” and, alternatively, “We just win our fair share …”
Why Aren’t We Alarmed?
Then when I ask them, “How are you going to help your people make their numbers?” The answer is always, “Do more!” And we pump up the volumes, increase the workloads, increase spending all reinforcing a continued death spiral of sales performance. (By the way, these managers are also the managers that insist on 3X pipeline coverage–I suppose this is new math, I don’t know how 3X pipeline at 20% win rates causes us to hit our goals.)
I simply don’t understand this! Why aren’t we alarmed with these results? Why aren’t we seeking to drive much higher win rates?
I suspect much of the reason is it’s really tough work to improve win rates. It’s far easier to demand we do more. It’s easier to push marketing for more leads, to ask SDRs for more, and to tell salespeople, “Work harder.”
What’s Driving Win Rates
Win rates are driven by three primary factors:
- Are we managing qualified opportunities as best we can? For customers that are committed to buying, are we engaging them effectively? Are we helping them successfully navigating their buying process? Are we creating value in every interchange? Are we helping them gain confidence in what they are doing, gain consensus, creating a business justified recommendation? Just pitching our products, relying on features and functions, trying to prove our products are superior to the alternative doesn’t drive win rates. It just causes us to win our fair share.
- Are we chasing the right opportunities? When I assess pipelines, too often, they are filled with opportunities we have no business going after. They are far outside our sweet spot or ICPs. By pursuing these opportunities, whether through wishful thinking or just bad judgement, we are wasting the customers’ time and ours. And in doing so, we harm our brand power.
- Are we chasing real opportunities? We may be chasing the right types of opportunities, the customers may be in our ICP, but they aren’t committed to a change. They may be curious, they may want to learn more. We engage them thinking the power of our personalities and persuasion can convince them to buy–and we can always throw in a discount as an incentive. Even if we are chasing the right opportunities, if the customer doesn’t have a compelling reason to buy; if they haven’t established a date by when they need to have a solution in place (this is not the same as the PO date); if there aren’t consequences to missing that date; the deal is just wishful thinking and good intent–both on the part of our customers and our sales people.
We spend too much time, we squander too much opportunity by accepting such low win rates. If we start winning more of the deals we qualify and pursue, we have to compete in fewer opportunities. Performance isn’t just about doing more, it’s really driven by doing better.
This is less a salesperson problem, more of a sales leadership problem. We will have individual performers with low win rates. Our job is to coach and develop them, if they can’t improve, we need to help them find new roles. But when we see organizational win rates at 20% or lower, management isn’t paying attention.
We have to do better, we have to do our jobs!