The Dirty Truth About Your Sales

Most boards and executive teams follow sales performance through a limited number of metrics: revenue growth, contribution margin, win rate, customer retention and forecast accuracy. These are relevant KPIs. But they do not necessarily tell you what is actually happening in your sales organisation.

Are you selling the products and services you want to sell – to the customers you want to have – at the prices you decided?

A company can deliver growth and at the same time move away from its strategy. That requires a different analysis than a traditional sales dashboard. McKinsey's work on commercial performance points precisely at the value of connecting transaction profitability at customer and product level with CRM data and sales opportunities [1].

You get what you measure – but are you measuring the right thing?

Imagine a company that wants to increase sales of its most profitable solutions, win more customers in two priority segments and reduce discounts. At the end of the year, revenue has grown 12%. The budget has been met. Everyone is satisfied.

But beneath the surface, most of the growth may come from traditional products with lower earnings. The new customers do not match the company's ICP, and part of the revenue has been bought through discounts, special agreements and extra delivery commitments.

The company has created growth. It has not necessarily executed its strategy. Frank V. Cespedes makes the same point: effective selling requires alignment between the strategy's actual sales tasks, employees, control systems and organisational framework [2].

Five necessary KPIs – five possible blind spots

Growth: tells you how much revenue is developing – not whether the growth comes from strategically desired customers and products.

Contribution margin: shows earnings after the costs included in the company's margin definition – but a single total can hide large differences in mix and customer economics.

Win rate: shows the share of won qualified opportunities – not whether the right opportunities are being pursued, or whether the prices are attractive.

Retention: shows whether customers and revenue are preserved – not whether the customers are economically and strategically attractive.

Forecast accuracy: shows how precisely the result is predicted – not whether the result is the right one.

This is not an argument for removing the KPIs. It is an argument for examining the mechanisms that create them.

The dirty truth is found in five places

1. Are we selling the products and services we strategically want?

Analyse revenue, contribution margin and development by product and service group. Compare the actual sales mix with the strategy's priorities. Look at differences between teams, sellers, customer types and periods. Which solutions create the growth, and which actually get the sales organisation's attention?

2. Are we selling to the customers we want to have?

Map new and existing customers by ICP match, segment, potential, growth and economic attractiveness. A large customer is not necessarily a good customer. Harvard Business Review's treatment of unprofitable customers shows that customer economics should be analysed with nuance: a weak current result is not in itself sufficient grounds to give up on a relationship [3].

3. Are we selling at the intended prices?

Look beyond the list price. Compare target price, invoice price and realised net price, and examine discounts, bonuses, free additional services, payment terms and special delivery commitments. McKinsey's classic analysis of the pocket-price waterfall describes how economic value can disappear both on and off the invoice [4].

Examine price variation between comparable customers and connect discounts with win rate, product mix and earnings. The goal is not automatically to raise all prices, but to understand where price discipline and value creation deviate from the strategy.

4. Where does the growth actually come from?

Split the change in revenue into new customers, lost customers, up- and down-sales to existing customers, price, volume and product mix. Handle currency, acquisitions and one-off effects separately when relevant. A company can grow through price increases while its new-business engine is weak. Or win many customers and at the same time lose revenue in the existing portfolio.

5. Are we creating the earnings we think we are?

Compare customer- and product-related contribution margin with relevant customer-specific costs: onboarding, customisations, support, freight, claims and service. Keep the different earnings levels methodically separate; a contribution margin is not the same as full customer profitability.

An analysis of price, volume and customisations is particularly relevant. McKinsey describes in a more recent article on B2B sales performance how over-discounting, price variation and uncritical acceptance of special customisations can erode earnings [5].

From dashboard to commercial X-ray

An in-depth commercial analysis combines three perspectives:

Strategy: are we selling what we decided to sell – the desired products, to the desired segments, with the desired economics?

People: which competences, roles, incentives and management choices affect actual sales behaviour? Differences between sellers are not in themselves documentation of a talent problem.

Execution: do ICP, pipeline, price approvals, account management, forecast and management follow-up support the strategic priorities?

The research and the external articles support the need for more detailed analysis and better strategic alignment. The overall model here is a practical, advisory-based application of Bridge Framework – not an independently scientifically validated diagnostic.

How the analysis is carried out – Bridge Framework

Clarify: define the desired commercial picture: product mix, ICP, target prices, growth and earnings ambitions.

Diagnose: examine, for example, 12–24 months of relevant order, invoice, CRM and financial data. Distribute them by customer, segment, product, seller and price. Validate definitions and data quality; supplement with interviews and selected won and lost deals.

Design: identify the most important deviations and their possible causes. Prioritise changes in segmentation, sales roles, pricing, incentives or management rhythm.

Activate: turn the insights into concrete decisions with ownership, actions and measurement points.

Evolve: follow not only total revenue, but whether growth gradually comes from the desired customers, solutions and realised prices.

The question your board should ask

Many boards ask: have we met the sales budget? That is legitimate. But the question should be followed by a more important one: have we created the business we strategically want to create?

It is possible to meet the budget and move the company in the wrong direction. To have a high win rate and win the wrong customers. To increase revenue and at the same time reduce the quality of earnings. And to have a sales organisation that delivers exactly what management's measurements and incentives ask for – even when it no longer supports the strategy.

The dirty truth about your sales is rarely found in the top line on the dashboard. It is found when you examine what is being sold, to whom, at what price, with what earnings – and why.

Five questions for the next management meeting

• What share of revenue and earnings comes from strategically prioritised solutions?
• What share of our new customers matches our desired ICP?
• What are our actual realised prices, including discounts and special agreements?
• What is really driving growth: new customers, existing customers, price, volume or mix?
• Where is the gap largest between stated strategy and actual sales behaviour?

The Commercial Scaling Diagnostic provides a structured starting point for identifying areas that require closer examination. It does not replace an in-depth analysis of actual customer, product, price and earnings data.