I sat on a call where the head of sales, who was also a founder, said he was going to strongly suggest the team stop selling one of the company's offers, because the company couldn't fulfill it.
Suggest. His own company. His own sales org.
I've thought about that a lot since, because the easy read is that he was weak, and I don't think that's what was happening. He was a competent operator sitting inside a structure where the authority to stop selling something exists on the org chart and nowhere else.
Everyone in the revenue org is compensated on closing. Nobody, at any level, is compensated on refusing. So the decision to shut off a segment technically belongs to someone and functionally belongs to no one, and the default is that it keeps getting sold.
Unfulfillable Revenue Isn't Neutral
Which would be tolerable if it were. It isn't, and the arithmetic is worse than most people have bothered to work out.
You paid to acquire it. You paid to attempt delivery and fail. You'll pay again in refunds, and in the disputes from the ones who don't ask nicely. You'll spend delivery hours on rescue that could have gone to accounts that were going to expand. You'll burn the reference, the review, and the word of mouth in a category where buyers talk to each other.
At the end of that you have a logo that cost you more than it paid and will now tell other people what happened.
It also isn't a churn problem, which is where it usually gets filed. Delivery-failure churn precludes expansion outright, so every one of those accounts is subtracted from the base you were counting on to grow.
It's a Governance Problem, Not a Qualification Problem
So the question isn't whether your reps are honest. They probably are. The question is structural.
Who in your organization can shut off a segment, and how are they compensated?
If the only person with that authority is measured on bookings, no amount of written qualification criteria will fix it. That document is a suggestion too.
This is the same wiring that makes missing expansion revenue costless. An organization moves on what it measures somebody against, which is the same wiring behind every revenue decision made by someone who is not measured on what comes after. Refusing revenue is measured against nobody, so it doesn't happen, and everyone involved is behaving rationally.
Go Look
Name the individual who could decide tomorrow that you'll stop selling to a segment.
Then look at their comp plan. Then look at how many times in the last two years that decision has actually been made.
If the answer is zero, it isn't because it was never warranted.
Lincoln Murphy formally named and popularized Customer Success starting in 2010 and has spent 15 years connecting it to expansion revenue and commercial outcomes. Read The Premise.