How can Sales Operations prevent sandbagging?
Have you ever bet a small amount at Poker even though you knew you had the best hand, just to keep other players in the game? That’s sandbagging. In the business world, sandbagging means hiding opportunities. This behavior appears at all levels. In this post, I’ll share a few tips to prevent sales representatives from sandbagging deals.
Why do sales representatives sandbag deals?
Sales representatives work for money, and they obviously sandbag deals to make even more money. Let’s take an example. Your sales team has a monthly quota, and they get a bonus on a monthly basis. The sales compensation plan looks like this:
- < 100% quota: 10% of the Annual Contract Value – ACV
- > 100% quota: 14% ACV
- > 120% quota: 20% ACV
It’s the end of the month, and a sales rep reached 90% of his quota. He has a deal that could close this month or next month. If he closes it now, he’ll reach 98% of quota and will have 10% of it. To earn more money, he can bet on closing it next month and try to get 14% of it if he reaches between 100 and 120% of his quota.
Let’s suppose that the Sales Director reached 80% of his quota and is getting bullied by the CEO as he is far from his target at the end of the month. The Sales Director checks the CRM and looks for deals that he could close right now. If he sees deals like this one here above, he’ll do what he can to close it. It’s going to create frustration among the sales team as the Sales Director wants to close many deals whereas sales reps are not willing to close them. The Sales Director might even try to pull forward other deals by offering some discounts.
If the Sales Director wins the fight, guess what will happen the next month? The sales team will create opportunities with far-off close dates, or even worse, and they will hide some deals by not creating them in the system. In this way, they’ll be able to hide some opportunities from the Sales Director.
Why is sandbagging a problem?
When sales reps start sandbagging, your CRM data quality drops. Thus, the sales managers will lack pipeline visibility. In fact, if you face sandbagging issues, you can trash right away your pipeline and forecasting analysis. Sandbagging makes it harder for the sales director to provide an accurate forecast, and forecasting accuracy will have an impact on your company’s ability to raise money.
Eventually, sandbagging is bad for business. I believe that it’s the sales director’s job to prevent it, but the Sales Operations team can help him/her in this task.
How can you prevent sandbagging?
Sales Operations can build the following reports to check whether the sales team is sandbagging or not:
- Check for opportunities created then “closed won” in a concise period
- Check if some sales reps modified close dates from far-off dates to the actual close date
- Check for opportunities that didn’t go through the whole sales process
- Check the coherence of sales activities and opportunities
Once you’ve identified the issue, try to drive sales representatives behavior. In the example above, maybe the monthly sales compensation plan is the real issue, and changing it to a quarterly sales compensation plan can solve the sandbagging issue.