KPIs are meant to give focus and drive performance. In sales, they're essential: conversion rates, pipeline targets, average deal value. They make success measurable and make sure that everyone's working toward the same goal.
But anyone who has worked in sales for more than a few months knows that KPIs are also a game. Smart players always find ways to win, sometimes within the bounds of the KPIs, sometimes just outside them. Not because salespeople are lazy or dishonest, but because they are results-oriented. When your success is measured in numbers, you quickly learn how to make those numbers work to your advantage. In other words: beat the system.
How that looks in practice
Every sales organization recognizes them: the creative ways in which KPIs are โmanaged.โ
- Register pipeline late: Only entering leads into the CRM when the deal is almost closed. Great conversion rates, but months without any market insights.
- Massage deal probabilities: Deliberately set quotations slightly lower or higher to protect the forecast.
- Playing with timing: Postpone deals to the next quarter or close them early to meet targets.
- Selective prospecting: Only pursuing warm leads for quick profits, new markets are left untouched.
- Cosmetic CRM updates: Logging activities after the fact or not entering lost deals.
Interesting read: Swipe right on the right leads
The carrot & stick principle
Behind this behavior often lies a classic dynamic: the carrot and the stick.
- The carrot: The rewards. Think of bonuses for achieving targets, recognition at the monthly meeting, or a place in the โPresident's Club.โ Salespeople naturally strive for these rewards.
- The stick: The consequences. If targets are not met, there will be pressure from management, loss of status, or a negative effect on bonuses. Nobody wants that, so KPIs are managed to avoid the stick.
The problem: if the carrot and stick are only linked to hard figures, then behavior will also be adjusted accordingly. The dashboard wins, the business strategy loses.
Why this happens
- Survival instinct: Salespeople optimize to get the reward or avoid the punishment.
- A limited scope: KPIs mainly measure tangible factors such as turnover, numbers, and ratios, while long-term value often remains out of sight.
- Short term: Bonuses and evaluations are usually quarterly or annual. This encourages behavior that maximizes short-term gains but harms the long term.
What the risks are
- You lose sight of the real market.
- Forecasts become unreliable due to manipulated figures.
- New salespeople start out with a distorted view of reality.
- Innovation and market development slow down.
- Trust between management and sales is under pressure.
Interesting read: The matrix of marketing insight and commercial blind spots
How can you prevent this?
The answer is not more carrots or more sticks. It's about smarter rewards and fairer measurement.
- Redefine the carrot: Reward not only revenue, but also data quality, new market activities, and customer retention.
- Ease up on the stick: Ensure that a realistic forecast or an early registered lead does not have negative consequences. Transparency must be safe.
- Measure both short-term and long-term results: Combine hard revenue targets with metrics for market coverage, early-stage pipeline, and customer satisfaction.
- Make KPIs multidimensional: Include ICP leads, data integrity, and activities in new markets in the score.
- Have shared goals: Have sales, marketing, and customer success work together toward the same KPIs to break down siloed optimalization.
- Look beyond the dashboard: Use deal reviews, win/loss analyses, and conversations to understand the story behind the numbers.
What this brings
- A fairer and more complete picture of the pipeline.
- Salespeople who put their energy into valuable activities, not into โplayingโ with numbers.
- A culture of coaching instead of control.
- KPIs that are no longer seen as a stick or a carrot, but as a means to learn and grow together.
In summary
KPIs drive behavior. If you only link carrots and sticks to revenue, you will get revenue, but often at the expense of insight and long-term value. Make sure that the rewards and consequences match the behavior you really want to see.
