There is an expression people use when they miss something obvious that likens their folly to "not being able to see the forest through the trees." In sales, this happens all the time. Salespeople get focused on trying to reel in "the big one" – a huge lead that will compensate them extremely well for all their hard work. At the same time, however, they may miss smaller sales that, while not being worth as much money, are willing and ready to be converted.
An over-reliance on a sales culture that thrives on big deals can have a negative impact on a variety of business functions. On a company level, it creates inconsistencies – when salespeople are incented only to pursue the largest, biggest deals, this can lead to inconsistent financial performance. Some months, sales could be booming and in others, numbers could be down. For public companies, this can be particularly damaging when it comes to quarterly reports.
"Having a small number of large deals makes it very hard for management to accurately predict revenue numbers more than a few quarters out, and it also hamstrings efforts by sales managers to establish more systematic sales forecasting, as their numbers will be often thrown off the large variance due to those outsized opportunities," explains Business 2 Community.
At the sales level, the focus on making only the biggest deals can also damage morale. If salespeople are struggling to convert leads, they may become less motivated and more complacent – this is never a good attitude for a sales department, particularly one that is staffed by younger or inexperienced representatives.
Putting things in perspective
While there are a number of ways sales managers can prevent their teams from becoming too focused on striving exclusively for the big sales, perhaps one of the best strategies is to create a better sales compensation plan.
The sales compensation plan has a big impact on how representatives pursue leads. If the big deal is highly incentivized, it's a no-brainer for salespeople to go after these leads. This may be good in some situations, but not all.
A plan should be created with the company's goals in mind, so if a business is striving for more even growth, a compensation strategy should incentivize small sales that are easier to convert in addition to the larger deals. It's all about hitting a balance between the two.