For those of you whose Sales Kick Off (SKO) is done, I pray the analysis was done carefully.
For those of you with an upcoming SKO, remember the average monster😈 in your analysis.
Let's deep dive!🤿
Suppose you told your CRO and the GTM leadership that your Average Selling Price (ASP) in EMEA is $28K based on all 121 deals closed in 2022.
Your leader will build 2023 plans on this metric for the EMEA biz.
🟠 Territory Mapping
🟠 Capacity Planning
🟠 Quota Planning
🟠 Funnel conversions
🟠 MQL volume
🟠 Budgets
Your CRO will use this number for all her revenue planning and presentation to the board.
However, a twist in the tale!
You realize a week after the SKO - one deal amongst your EMEA wins was an outlier deal worth $212K.
Taking out this outlier, your average deal size falls from $26K incorrectly published to the board earlier😟 to $24K, which is factual ✅
This changes everything!💥
Wondering what could a $2K difference in ASP do?
Well, well, well. You are in for a shock😅
🔴 At 26K ASP, your CRO has promised the board $3.1M revenue in EMEA based on Marketing's promise of 1920 MQLs.
🔴 At 24K ASP, your CRO WOULD HAVE promised the board $2.9M revenue in EMEA based on Marketing's promise of 1920 MQLs
This affects every count of SAL, and SQL all the way back to MQL goals. It affects even the SDR quotas.
And this is one region.
At scale, your average monster cost your CRO millions 💰💰💰 in extra revenue committed to the board across the sales territories.
⚠️ Now, nobody wants to go back to the board with revised numbers, do they?
⚠️ Nobody wants to go back to marketing on upping the MQL count to meet the incorrect promise made to the board
⚠️ Or get ambitious and up the funnel conversion goals without scientific evidence.
Moral of the story:
If a billionaire walks into a bar🍺 , it makes everyone in the bar a millionaire "by average!"😅
Always account for the outliers in your analysis.
Happy Reporting! 📊
gif by tenor