Beware of This Vanity Metric

Is your team chasing arbitrary pipeline goals just because it “sounds good”? If your numbers aren’t backed by real sales math, you’re creating frustration and failure for your reps. In this video, we’ll show you how to calculate meaningful metrics that drive results, without filling your pipeline with garbage deals.

Don't forget to check out last week's top tip: Having Deeper Client Conversations!

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If you prefer to read - here is the transcript:

Vanity metrics. This is a term that I love because it really means paying attention to metrics that have no meaning to your business. And there are so many of them.

Recently I've bumped into a few sales leaders who have a vanity metric that drives me insane, and that is a vanity metric that says you need to manage a very specific number of opportunities in your pipeline at all times. You have to have in your pipeline. And I always say, well, where did that number come from?

Now why is it a vanity metric? Well, because somebody thought about it and it sounded good, right? Eight is great, right? It doesn't make any sense to your business. It just makes sense because you decided on the number 30. And so as a sales leader, you're going to lead and coach at all costs, regardless of whether that number makes sense. It's a silly way to run your business.

Instead, you should be working with your sales reps, senior or junior, to help them understand the true sales math. What if 40 is the right number given their market? By telling them they have 30 you are creating an environment where they're going to fail. What if ten is the right number? If you make them have 30, they're either going to put gunk in sludge to make up the 20, or they're not going to pay attention to the ten that need the most attention.

Run through the sales math based on your average sale size and your average closing ratio, and the amount of business that you need to close in the year: what is the actual number of opportunities that need to be in the pipeline? That's the only number that matters. And yes, it's going to be different for everybody. Never said it would be easy to coach or easy to manage. Nothing is when it's the right thing to do. But tailor your pipeline metrics for each rep based on their territory, their ability, and the targets that you've set for them.