What is sandbagging?
Sandbagging is holding deals out of the forecast, or under-forecasting the number, so that results beat it later. Corporate Finance Institute describes it as intentionally lowering expectations so results look better, and notes it is common among salespeople working to targets. A related move is holding signed business for next period once this period's target is met.
Why it matters to a revenue leader
Sandbagging looks safe and is costly. The company plans hiring, purchasing and cash around a number that is too low. It also hides risk: if the team always beats commit, a real shortfall looks like normal caution until it is too late. Timing games can cost margin too. Ian Larkin's research on enterprise software sales found deals timed to the salesperson's commission calendar carried larger discounts. Pay plans with accelerators and quarterly resets raise the incentive to sandbag, so the plan design and the forecast culture need to be read together.
Example
Fictitious numbersAn environmental services company's actual bookings have beaten commit by 15% to 20% for six straight quarters. The pattern traces to three sellers who keep late-stage deals in best case until they are signed. Meanwhile, finance has held back two field hires because the commit looked flat.
"Whose results beat their commit every quarter, and what does that tell us about how they forecast?"