SALES AND “SANDBAGGING”

What is Sandbagging?

• Hiding future orders from management

• Understating potential sales

Why do Salespeople “Sandbag”?

They don’t trust their management:

• They want to avoid unwanted attention

• They want to avoid target creep

Avoid Unwanted Attention

• Believe it or not - sales people with big deals on the table get more attention than those with no deals on the table!

• Attention tends to be audit and compliance based – checking up not assisting

• Mad isn’t it. Surely management should help those without deals!

To Avoid Target Creep

• Once a deal is known, particularly if it affects a future year (with a target yet to be set), it can get incorporated into a salesperson’s next year target

• Increased target means decreased earnings for the salesperson

• Salesperson feels undervalued ( and is) as his hard work (in year) is not rewarded, it gets sucked into next years “normal”.

Why is Sandbagging bad?

More deals come in than are forecast

– Not enough equipment in inventory• Long lead times = unhappy customers

– Not enough people to make and support the equipment or service that has been sold• Quality and responsiveness drops = unhappy customers

– Stock Market thinks you are not in control of your business• Share price drops = ability to invest drops = unhappy

shareholders!

Management behaviour that causes mistrust

• Target creep

– Deal is in the pipeline, so increase salesperson’s goal to drive extra effort

• Deep deal analysis

– Distrust of salesperson

• Might be sandbagging

• Might cock-up the deal

• Might not bring the deal in quickly enough

– Focus on forecast accuracy vs pipeline creation

Negative Trust Circleself fulfilling prophecy!

Mgt doesn’t trust salesperson to

forecast accurately

Why?

Oversight to find “truth”

AM sandbags to avoid pressure = overachievement

Set high targets as AM must be

sandbagging

AM expects to be OVER goaled so

sets a low expectation of future business

How does Oversight go bad

• Weighing the pig mode

• Over and early commit

• Need to cover lost deals

Management enter “weighing the pig” mode.

• Mgt commits deals to higher management to get the needed forecast. Promise the pig for Christmas dinner

• Belief (possibly true) that Salespeople need “motivating” to honour the commit. - They apply pressure.

• But stressed individuals work less effectively than motivated ones!

• Mgt becomes worried that the pig isn’t big enough to feed everyone so they keep weighing it – or keep reviewing the situation.

• Reviewing – doesn’t make the deal stronger, it steals time from selling– Weighing the pig, stops the pig being fed!

Over Commit

• Desire to make Executives and Shareholders happy

• Leads to committing more than one should

• At crunch time, there is a gap

• Management exert pressure to close the gap

Need to Cover Lost Deals

• Binary – singular and large deals, when lost cause a big hole in a committed forecast

• Management want to “hit” the forecast

• Answer:

– Pressurize other existing deals to come in earlier!

– Sales people hate pressure

• bad motivation technique – so they sandbag to give themselves cover.

• They under-forecast binary deals

HOW SHOULD IT BE DONE?

Foster trust

• Reward truthfulness

• Punish dishonesty

• Be authentic and consistent

• Enough said – good leadership principles apply

Lead and Coach

• Help Salespeople get more deals in the pipeline – team based selling

• Help sales people land more deals quicker- by coaching and then rewarding great behaviours, not policing behaviour!

Realistic Forecasting

– Allow slipped deals,

– Reward accuracy instead of punishing inaccuracy

– Coach improved selling technique including forecasting

– Protect Binary deals with cover and adequately resource them

Protect the Salesforce

• Lots of internal pressures to get accuracy -from operations and finance

• Ensure balance hence enabling the Sale person to do his job and accurately forecast deals.– Eg CRM tool malaise:

• often favour forecasting based requirements > which is information-IN,

• vs

• helping the salesperson which is information-OUT

For help on this

• Contact

• info@thesalescentre.co.uk

• Or

• Moore.simon@yahoo.com