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Welcome to the Sales Transformation Podcast, the definitive stop for leaders driving change in the sales world. Hosted by Collin Mitchell, we dive deep into the minds of Founders, CEOs, VPs of Sales, and Sales Development Leaders from trailblazing startups to industry-leading public companies.
Our mission is simple: to illuminate the path to extraordinary sales leadership. We explore a broad spectrum of sales territories, from the intricacies of Founder Led Sales and Outbound Sales to the transformative potential of Technology in Sales and Social Selling. Whether it's mastering your CRM, optimizing conversions, scaling sales teams, or engineering a complete Sales Transformation, our conversations are set to challenge the status quo and redefine sales success.
With a new content every day of the week, we bring you unfiltered interviews with the luminaries of sales, people who have not just succeeded but transformed the way we think about sales. Collin Mitchell also shares sharp, tactical sales tips every week, packing decades of sales wisdom into bite-sized insights.
So, if you're ready to rewrite the sales rulebook and learn from the best in the business, the Sales Transformation Podcast is your ticket. Write us a review, share the show, and join us on this journey of sales evolution. Let's transform the way we sell, together!
Today, Andy Paul digs into improving sales win rates. Andy joins our host, Colin Mitchell, to discuss the alarming trend of low win rates in sales teams and the need for a shift in mindset. It's time sellers win more often than they lose. Colin, take it away.
Speaker 2:But then part of the problem is, you know, it's sort of become acceptable for teams to have a low win rate or to have a very small percentage, which I would consider a small percentage, of quota attainment across teams.
Speaker 3:Yeah. Well, it has. I mean, you'd look at and not to pick on SaaS, but, I mean, there's perfect example of that. But it's yeah. There was, research done for some authors who wrote a book called Strikingly Different Selling.
Speaker 3:The Franklin Covey Organization commissions 3rd party to go out and do, research about win rates, and they interviewed 4000 or 5000 companies. I can't remember which one. Around the world, multiple industry segments, b to b, and average win rates were 17%. And, you know, in SaaS, we see the a range, right, in the teens to twenties, sometimes in the low thirties. Yeah.
Speaker 3:People just sort of accepted this fact that we're just like a win a very high fraction of our opportunities. And it's it's mind boggling to me because and I had this conversation with, my friend Dave Brock, who I believe you know. And, you know, in our careers, when we were growing sales teams and managing, you know, 35% win rate, Dave was talking about when he was at IBM. You know, somebody had a 35% win rate. They were coached to go find another career, and we did the same thing.
Speaker 3:That was the minimum acceptable. Yeah. And so and it wasn't even acceptable. It's just the minimum to keep your job. And so we've
Speaker 2:created a fire. 35%, you'd be a rock star.
Speaker 3:Yeah. Which is just ins well but no. But when you talk to the real rock stars out there, when you talk to, yeah, like my friend Brandon Fluharty, many people know. And, yeah, I had the good fortune to coach him at one point on his rise. But, yeah, win rate is everything.
Speaker 3:And he's a top seller. He was selling, yeah, lots of big deals. And his win rate was like 75%. Yeah. A top sellers learn how to allocate their time and focus on the opportunities.
Speaker 3:And, again, they make the right choices and work on opportunities that are more likely lead to a positive outcome, and they have high win rates. And I I contend that as a seller, the minimum standard you should be shooting for is that you win more than you lose. That simple. Win more than you lose. And if you're not, then, yeah, there's some more coaching and development and other things that need to be done to help you get to that level because that's that's really should be the minimum acceptance stand minimum acceptable standard for you as an individual in your own career.
Speaker 3:So, look, I need to win more often than I lose.
Speaker 2:Now the bar, I think, is set low for a lot of sales organizations
Speaker 3:where,
Speaker 2:you know, most people think, yeah, 20% is not good. 30% is good. Right?
Speaker 3:Well And Yeah.
Speaker 2:So if you're a seller and you're thinking, well, hey, you gotta you gotta make a choice. Right? Which is a lot of what we're talking about here. That whatever the bar is, if it's low, are you okay with that? Are you okay with losing almost twice as often as you win?
Speaker 3:And you shouldn't be. I think this is part of what drives people out of sales. It's frustrating. If I'd gone through my career with that type of win rate, I would have been amazingly frustrated because and it operates on multiple levels, which we'll get into. I mean, one is, you know, if if practice makes perfect and you've got a let's call it 30% win rate.
Speaker 3:What are you practicing most frequently?
Speaker 2:Losing.
Speaker 3:Losing. Right? You're gonna get pretty damn good at losing at a 30% win rate.
Speaker 2:Well, don't even get me started on practice because most aren't even, you know, most aren't even practicing. They're just showing up to game day and winging.
Speaker 3:I know. But I'm saying is, you know, if you're just the the things that you're repeating most frequently, you're technically practicing is is yeah. You're practicing losing. You're accepting the fact that you're I'm not going to lose. I am gonna win a majority of my opportunities.
Speaker 3:And the way I do that is, you know, I get much more effective in terms of discovery and qualification, making sure that, you know, operating with a level of intent to make sure that there's a higher probability if you're gonna win this deal. Yeah. I typically carried, like, a 1.5x pipeline coverage ratio throughout my career as a seller, and I was I was running sales teams. That's what we wanted to see because if we had something in our pipeline, we were so proficient at the qualification that we were going to win the deal. Right?
Speaker 3:If we're gonna invest the time in it, we're gonna win it.
Speaker 2:So And people are just not operating that way. Right? No. The the the ratio of pipeline that teams, you know, have on quota based on these low win rates are not what they used to be.
Speaker 3:It's self fulfilling. Right? It's your win rate is the reciprocal of your pipeline coverage ratio.
Speaker 2:If you got
Speaker 3:a 5 x pipeline coverage requirement, you're gonna have a 20% win rate. Just a rule of thumb. On average, that's what it's gonna be. So, yeah, you start creating this vicious cycle for yourself by getting into that loop. Instead of setting the expectations to say, look, no.
Speaker 3:Our goal is mine as a manager to help you win more than you lose. And how do I work with you to help you? And I have all this technology available. I can listen to calls. I can you know, now we're starting to go back out on calls again.
Speaker 3:I can go with you. You know, all these things so I can help sort of develop you to get to the point where you can be in this position where you can win more than you lose.
Speaker 2:So let's let's look at this from 2 different perspectives. Right?
Speaker 3:Yeah.
Speaker 2:How does a sales leader address this problem? Let's start there.
Speaker 3:Mhmm.
Speaker 2:And then we can say, hey. If I'm a seller and there's maybe, you know, some limited things, yeah, I have some choices, but there's also maybe some limitations on what I can or can't do.
Speaker 3:Possibly. So
Speaker 2:let's start there. Sales leader, win rate win rates are, you know, 20%, 25%. Well, you You know, quota, a pipeline, you know, ratio is 5 x is what I'm giving my team because I know based on our win rate. How do I fix this? Where do I start?
Speaker 3:Well, first of all, as a as a sales leader, you have to care. Right? And and that's that's really what starts. Right? Because if your sellers are suffering with low win rates and I call it suffering because that's really what it is.
Speaker 3:Right? When you're if you're operating in a low win rate environment, you're winning 20% of your deals. The fact is the buyer's making the decision to buy from you despite you, not because of you. Yeah. And And Again it's
Speaker 2:a more serious problem than maybe we're even living on. Right? I mean, if you're if that is your job every day that you spend majority of your day doing, you're stressed out. You're depressed. You're, you know You're unfulfilled.
Speaker 2:Mental health is probably suffering. I mean
Speaker 3:Well, they but think about there's been research showing us why do people stay in sales. Right? We know a lot of people get into sales. They think, yeah, it's a great way to make money. Yeah.
Speaker 3:Money motivated. I saw a video that very senior sales leader. I I was very disappointed because he was, like, talk about, it's the first thing I look for is money motivation. It's like no. People need to have the intrinsic motivation.
Speaker 3:It's like, I wanna do a good job. I wanna help buyers. I find fulfillment from solving problems. You know? I I wanna, you know, test myself intellectually to be able to help, you know, in these situations.
Speaker 3:So money is certainly important, but it it's it's not the driver. So if you think about why people are staying in sales, there are these motivations other than money. And then I said, a big part of it is, yeah, I'm serving other people. I'm helping. Well, you can't help a buyer if you can't win their business.
Speaker 3:Right? If you're in this business, this profession say, look, I'm trying to help customers. I get satisfaction of helping them. Can't help them if you can't win their business. So that should be a first motivation.
Speaker 3:Right? If I want fulfillment in my career, it's gonna come from actually winning deals, not just from competing for deals. Yep. And the way I win deals is by, again, by creating these buying experiences that differentiate me from the competitor who's gonna be a little more sales, a little more pushy, a little more manipulative. And I'm gonna come in, and I'm gonna help the buyer and get connect.
Speaker 3:I'm gonna use my curiosity to understand what's really to them, what's really driving the decision, and then I make sure I'm delivering value at every step of the way to help them make progress toward making that decision. I can do that. I start having a pretty fulfilling career because I'm helping people solve problems and help people grow their companies and grow their businesses and so on. And I get that's where, again, it becomes self reinforcing if as I win a higher fraction of my opportunities.
Speaker 2:Yeah. And that's why you see these sales teams, you know, measuring success on activity because it's like Yeah. That's how they're measuring whether me as a seller whether I'm doing a good job or not.
Speaker 3:Yeah. Well, I mean, because, again, it's a cultural thing. As the sales managers have to understand that that the single most important metric for a salesperson, individual contributor, is their win rate. That's it. What else is more important than that?
Speaker 3:This because this is the buyers vote on the value of the experience they had with the seller. And so if you really understand how effectively you're selling, that's it. That that's the metric you need to be following. And as individual contributors, you need to be tracking your win rates. And there's really more than 1 win rate.
Speaker 3:Or it's over simplifying when we say win rate because there's really we have multiple win rates even as individuals. Right? It's we have a win rate based on deal size, based on segment, based on, you know, all these other variables. But in general, if you just look at your win rate and just use it as a starting point, your overall average win rate, focus on that and make that Which
Speaker 2:at best is what most people are looking at. Right? They don't just lumping it all together and having a blended average.
Speaker 3:They do. And that can be misleading. Right? Because there's plenty of instances where, you know, you go into an organization and sell our trumpets. So I've got, you know, 50% win rate, and it's, you know, 50% win rate on low small deals.
Speaker 3:And on the deals that really wanna win, they've got, like, a 10% win rate. And so they can sort of take, you know, claim bragging rights where I got this high win rate, but it yeah. You're not really in alignment with where the company is trying to go and the type of deals you're trying to do and type of business you're trying to win. So it takes a bit of scrutiny and analysis beyond just sort of the average. Average could be misleading.
Speaker 2:Right.
Speaker 3:So it's one of the things that that my team that we're working on with companies now is is helping them really understand the story that their win rates tell them about their revenue. Help them unlock revenue opportunities that perhaps been hidden by really understanding what's the right mix of win rates you need, to grow revenue.
Speaker 2:Well, it can help you focus on where you can actually win
Speaker 3:Oh, absolutely.
Speaker 2:More often or Absolutely. Where the biggest problem of losing way more than you're winning is
Speaker 3:Yeah.
Speaker 2:Which can easily be hidden in a blended
Speaker 3:overall way. Absolutely. And so first term order of sensitivity, we're trying to help with companies because it's amazing most companies don't track this, is just let's let's look in the habit of tracking win rate. And then once we get on that, then we can say, okay. We can help you sort of break this down, analyze this, and really diagnose the problems that exist and serve what the path forward is and the right blend to win rates to help you achieve your revenue goals.
Speaker 3:But the first thing is just getting people sensitized to the idea. This is the metric you really need to be focused on. And there's a lot of debate around that, because there's a lot of people sort of have bought into the system that, like, as long as we keep the top of the funnel really healthy and keep deal flow coming through, win rate's unimportant. Right?
Speaker 2:But there's so much waste that goes into just trying to overcompensate with keeping the top of the funnel. Yeah. Because everybody thinks, oh, I just need more more at bats, more meetings. Yeah. Right?
Speaker 3:And you're really and I would make the case. This is, you know, hard for people to hear, but make the case. And I think it's a quite convincing case that, you know, if your win rates are at 20% or 25% or 30%, you've got more than enough leads. We have too many. And so that's not the challenge.
Speaker 3:The challenge is and this is another one of these vicious cycles is if marketing relies on intelligence back from sales in terms of, hey, you know, we're more precise in our targeting of the opportune to potential opportunities that we actually win more frequently. Well, if you've got a bunch of sellers on low win rate, the intelligence they're feeding back to marketing is not very good. But if you are able to get your win rates up, you become more precise. Right? Because you're you're your experiences with the opportunities that you're actually winning.
Speaker 3:Now you say, oh, boy. We've gotta start developing a track record that's pretty predictable and pretty consistent at a higher rate with people that fit this profile. So get me more of these. But if you're only winning, you know, one of every 5, chances are you gotta you know, 1 or 2 things are play. Either you don't have product market fit, if that's a condition that continues to persist, or yeah, you just really need to upscale your sales efforts.
Speaker 2:Or suck at winning.
Speaker 3:Let's just Yeah. I wasn't gonna say that, but I I I still be more positive about this. I know. Because
Speaker 2:That's that's an interesting perspective there because I I don't I know I've never thought of it, and I don't think many sales organizations are thinking about it. Right? Like, if we're, you know, giving this feedback to to marketing. Right? Mhmm.
Speaker 2:But that feedback is coming from 80% of the people you're losing with.
Speaker 3:Yeah. Well, that's problem. Yeah. And and the issues even go deeper. I mean, the folks at closed, the platform, win loss analysis platform, did the study and it showed that, or found that that when sellers enter into the CRO system, the reason why they lost a deal, that they're right, you know, because they went and validated them with the buyers.
Speaker 3:But the sellers only put the right reason in 15% of the time. 15, 15% of the time. So 85% of the time, the seller doesn't understand why they lost the deal.
Speaker 2:Yeah. Or doesn't wanna be honest about it.
Speaker 3:Either way. Right?
Speaker 2:Somebody else should be validating that.
Speaker 3:Yeah. I mean, it speaks to why you need to be really be doing significant win loss analysis, as a sales organization and and not too often they leave that to start product marketing. But this is something sales really needs to dig into because, yeah, what the buyer is saying is, well, what was my experience like with your sellers? And this has, you know, this idea of the buying experience should be impacting how you hire and how you enable your sellers. It's a and you think about all the pieces start coming together on this is that you'll ask sales managers all the time.
Speaker 3:It's it's hiring, you know, senior execs and so on. So you're gonna hire sales. Yeah. Great. So what what are you trying to hire?
Speaker 3:Right? Who? And they have a list of, like, yeah, usual suspects, the things they want. Right? And I said, oh, interesting.
Speaker 3:I said, so have you ever asked your buyers what they need from your sellers? Because your buyers are basically you know, if you believe as I do in the jobs to be done theory of work Yeah. Is your buyers are basically hiring you to help them make a decision. So what qualifications do they need in your sellers to be able to help them navigate through the buying process to make a decision? And shouldn't you be hiring people with those qualities and those experience set of experiences.
Speaker 3:And then also then shaping your enablement and training programs to give people the skills to be able to help the buyers in the way they need.
Speaker 2:Yeah.
Speaker 3:Because buyers will tell you. They'll tell you what they need.
Speaker 2:Thanks for tuning in to today's episode. We hope you enjoyed it and that you didn't forget to subscribe and share so that we can help more people transform the way they sell.