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The Six Biggest Sales Analytics Lies

Updated: Jan 12

And what to do about them.

Vendors and conventional wisdom can be misleading.

  1. You need 3x pipeline coverage. Fuhgeddaboudit. We've measured it. Coverage is weakly related to actual sales. Large deals make it highly volatile. Coverage ignores new deals. And if you try to manage to a coverage ratio, the metric will be gamed. You might as well look at sunspots or any other random data to predict what you will need. Better off ignoring it. You already know you need more pipeline. (We explored this comparison in more depth here.)

  2. You can repeatedly get 2% accurate forecasts. That’s wildly unrealistic—even under idealized conditions that don’t reflect your business. Aim for within 10% – 20% for each forecast you make (if you have a hundred deals or more that you are working each quarter). If you only have a handful of deals, your business is not forecastable.

  3. Win rate is a simple ratio: wins/(wins + losses) or wins/(wins + losses + open deals). These two common formulas are both fraught with problems. Win rate is a function of time. For any group of deals, wait longer and you will (cumulatively) sell more. Any simple ratio that ignores time (as both formulas above do) is an oversimplification.

  4. You need AI to get better forecasts. AI requires lots of data. You might improve your forecasts with AI. But you should first get the most out of the simplest models—that you can understand. Then consider further optimization. AI is also undesirable because it is a black box. You can’t see inside to understand what is driving the numbers.

  5. You need a third-party application to do forecast rollups outside of Salesforce. Nonsense. Salesforce Collaborative Forecasting has what you need: multi-level rollups, manager overrides, spreadsheet entry. You’re already paying for it.

  6. More metrics help you understand what is going on. The right metrics are critical. But more metrics create more confusion. Metrics should be things that you can control, and that are directly related to things you care about. Before you add a metric, measure it to see if it is correlated to selling more.

So what to do? No one knows what the future holds with certainty. Adjust your expectations. Focus on what's reasonable to expect, and which basic factors have the biggest effects on sales.

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