“Sandbagging” term originates from the late 1880s and relates to somebody who sneaks up on another person from behind and beats them with a sandbag. It was a dishonest move back in the days. Today, the term also implies some kind of trickery but not that dangerous.
Basically, it’s the idea of “under-promise and over-deliver.” And unlike in the 1880s, sandbagging can be a beneficial thing today. You’re packing your sandbags with deals and may suddenly surprise your management or investors with better results than they are anticipating at the end of the month.
What is sandbagging?
Sandbagging is a tactic of diminishing the expectations of a business’ or a person’s strengths and core expertise to generate comparatively greater-than-expected results.
In a business sense, sandbagging is most often observed when the company’s management deliberately lowers the expectations of its investors about predicted profits and other productivity indicators. As a result, when the organization delivers higher-than-anticipated results, shareholders are much more impressed and agreeable.
How sandbagging works
Sandbagging has become common in business when it comes to the presentation of foreseen revenues and incomes. As a consequence, the reaction of shareholders is frequently more careful than it once was because they are becoming aware of this practice.
In some instances, sandbagging can boomerang because stockholders know they are being deceived and expect the maximum efficiency and overperformance from sandbaggers. For this reason, stock prices occasionally drop because earnings did not surpass investors’ expectations.
Let’s imagine, business gets a good reputation for being a fair player and not for being a sandbagger when delivering quarterly outcomes. Throughout the last quarter, it announced that it was likely to declare average growth in sales and profits. Analysts are convinced that forthcoming quarterly figures will be ordinary. But when returns are presented, they appear higher than the estimation, which enhances the market analytics and improves press coverage.
But when the situation is reversed, and business has gained a reputation for sandbagging, the stock price would possibly be unchanged by better-than-expected quarterly returns. This leads to the conclusion that sandbagging has a restricted impact when it’s overused because shareholders are quick to catch on to this method.
Why people sandbag
You may assume that the main purpose of sandbagging is to establish weaker expectations for yourself and, thus, undoubtedly surprise your supervisor. But be cautious about when and why you decide to use it.
Here are several reasons you may want to think of working on this technique:
Big deals draw the attention of top executives. If you have a lead that may bring a huge sale, but the burden of extra eyes on it makes you feel stressed and pressurized, then you may choose to understate the importance of the deal until you feel more confident about it.
Shielding next quarter
Sometimes, it’s best to save a lead or two in your pocket and work on them next quarter. But if your current reporting period takes a descending curve, then you can use those leads you can presumably close fast to surprise your supervisor or investors at the end.
Getting your feet wet
As you close sale after sale, there will be this feeling that you already know which deal is going to close and which is not. But when you are only a beginner, you may not get these intuitive signs so clearly and easily to predict your outcomes. You may not want to promise too much, so sandbagging may be a good protector while you get experience in sales.
How to sandbag
When sandbagging, you will want to take into account the following features of your prospective contracts:
- How likely the deals are to close
- What the profit size of the contracts is
- When the sales are planned to close
For instance, let’s say you have an agreement that could vary from $15,000 to $30,000 in revenue and that may be signed this month if things move forward quickly. You would predict the worst-case situation of making $15,000 and closing the deal the next month.
Sales managers are naturally optimistic, but in sandbagging, you want to be conventional and err on the side of underrating your deals.
Never skip entering prospective leads into your CRM. Just add them but reduce the probability of closing deals in the best-case scenario.
By sandbagging, you are open to the thought that we can’t control all the things. Emails can get to the spam folder, clients can get tied up with other businesses, and customers can choose to go with a cheaper alternative. Fortunately, things often do go to your advantage, but you’re in a more favorable position to expect the worst and be delightfully surprised.
Wrapping it up
- The word “sandbag” implies a method of diminishing the anticipations of a team’s or a person’s abilities and core skills so that even moderately positive results take on a bigger weight.
- In business, sandbagging is most often observed when top management presents to investors much lower estimated results than what they can actually achieve in reality.