The Ancient Celts were a fearsome bunch. For nearly a hundred years, they managed to see off invasions by the much better-equipped and better-organised Romans, relying purely on their skills with a blade, their sheer audacity and, presumably, the fact that the sight of a tribe of woad-slathered redheads screaming towards you down a hill is enough to make anyone panic.
But in 43AD, it all went wrong. The Romans came back, and this time they decimated them.
So what happened?
Celtic warriors prided themselves on their heroism in one-to-one combat. They’d see an oncoming army and they’d charge. They didn’t think about battle positions or plans or how each person should work together. They picked their targets, and they went for it.
But that’s not how the Romans did things. When it came to battle, the Romans were strategists.
They weren’t interested in how well individual soldiers fought, they were interested in how the entire legion would fit together like cogs in a machine. They wanted to see the bigger picture: if one group of soldiers broke through the enemy ranks, what would that mean for the others? When would it be better to retreat and regroup rather than suffer a superficial success with no long term benefits?
And, of course, they won.
When it comes to setting targets, some sales managers have a bad habit of following the Celtic model. They push their teams harder and harder to get more leads, to close more deals, to win bigger contracts. What they don’t do is take a step back and look at how these pieces come together. The great sales managers think like the Romans.
When it comes down to it, there are four things you need to really understand in order to grow your sales. Together, these factors form a part of your “sales velocity equation”.
1. Your average deal size – not just the ones you win, but the ones you lose, too
2. Your sales cycle days, i.e. how long it takes you to win (and to lose) a deal
3. Your win rate, both in terms of total number and of value
4. The number of deals you have in your pipeline
The key here is not to look at these aspects in isolation, but rather to watch how they affect one another.
Anyone can just decide that they want more valuable deals or more leads or to win more often. But if you stop there and start handing out targets accordingly to your team, you’re setting yourself up for trouble.
Why? Because each of these things is interrelated.
And as you start to tweak one of them, you need to know how it affects the others. And to understand how this works in your business, you’ll need to get down to the granular level.
Rather than just looking at how often you win overall, what if you ask yourself how often you win big deals and how often you win the small ones? You might intuitively tell your team to focus their energies on landing a whale, but if the data shows that you can catch a thousand smaller fish in the same timeframe, is the risk necessarily worth it?
The same goes for the number of deals you have in your timeline. Yes, it’s good to have options, but if these opportunities are all of the kind that take a long time to win, do you have the resources to chase them all? Are you seeing a genuine correlation between filling up your pipeline with deals and an increased number of wins, or are you just acting on autopilot? If your win rate is low, maybe you’re putting too much emphasis on quantity of leads, and not enough on quality.
These are just a few of the myriad ways that the four strands work together to shape your sales velocity equation – how it pans out in your organisation will doubtless be unique to you.
But the point is that you cannot select a readymade strategy at will: you need the insights from your business to build something that works for you.