A short YouTube talk by Matt Ryder arguing that many sales organizations fail when they scale because they optimize the wrong metrics—most commonly close rate. Ryder explains how incentivizing close rate distorts qualification and pass-through from marketing to sales, and why that metric breaks as growth accelerates.
The reason most sales organizations collapse when they scale is that they usually optimize for the wrong metric. I've worked with tons of teams from like billion dollar companies down to like 50k a month and all different sizes. And when you optimize for things like close rate, which is pretty common, if you've promoted say your best sales guy to sales manager and then you know that they've gone up in the Peter principle, which is like promoting someone to a state of incompetence happens, you start optimizing for things like close rate. What that does is it means that you're going to always you're increasing in demand in the marketing will not translate into sales because instead of optimizing for the pass through and higher sales, they're optimizing for a friction based metric. I can come into any team and double the close rate immediately. I just make it really difficult to get on a sales call or I can half their close rate by letting everybody through. So the fact that I can do that so easily means that optimizing for that metric in particular is a terrible idea. And most people haven't scaled a business fast enough or in sales to where they know which ones to optimize for and which ones to not. And the most common thing that I see is optimizing for things like close rate. And that breaks the moment you start to grow quickly.
