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The Importance of Accurately Predicting Sales Outcomes

If we're ever going to succeed in predicting next steps with accuracy, we must start paying attention to the behaviours of the people that create the end result.

By Dr David Kirk, SuMo Sales Director

When I think about the concept of “predicting next steps and sales outcomes”, I am always drawn back to my first maths lecturer. He liked to kick off the statistics module by asking the class if they could give an example of where knowing some information from the past could be used to predict that something was about to happen.

On the face of it, this appeared to be a pretty simple question to answer. For example, we know that if we turn the steering wheel on a car a certain amount, the car will turn.

But when you question the inherent assumptions that you have made in reaching your conclusion, then the situation becomes a lot more complex.

For example, what if you are travelling at excess speed? Would you get the expected outcome if the road was icy? In these scenarios, the assumed turning outcome will most likely be very different.

So clearly, the more supporting information we have available to us, the more accurate we are likely to be when attempting to predict the outcome.

To help us think this through, he used to draw a very simple straight-line graph. One showing that as X increases in value, then so does Y. He then asked us to describe how we would reduce Y. Well, the answer to this one again is simple, right? If we reduce the value of X then the graph dictated that Y is reduced by the same amount also and visa-versa.

The problem for us came when he revealed the labels on the axis. The X-axis was labelled as “ice cream sales” and Y-axis was labelled “drowning”.

Predicting sales outcomes

 

Creating our Own Narrative

So, if the data supporting this graph is accurate (and he assured us that it was indeed true) then it proves that as ice cream sales increase, so does the number of people who drown.

He persisted in getting us to check the reasons & evidence that led us to the conclusion. Actively doubting the evidence in front of our eyes is never a bad thing.

After further analysis we realised that we could massage a picture to support the conclusion we had drawn.

Our premise was that if you close the shop at the beach with the dangerous rip tide, people would go to another, safer beach where they could find a shop that sells ice creams. So, reducing the sales of ice creams does in fact reduce drowning on a specific beach.

Clearly we were fitting a narrative to support the outcome the graph was showing us.

In all our businesses we are now awash with vast amounts of data that supposedly proves the way that our business works. Most of this data is focused around the process we are trying to improve (sales, customer service etc.).

By taking point-in-time process oriented data we are in danger of creating our own straight-line chart and creating our own outcome narrative that proves if we change X, so indeed we will see a change in Y.

A great and commonly used example exposed by Thomas Pink is the narrative around “If you pay someone more, then they will work faster”. Taking a behavioural analysis approach, rather than a process oriented approach allowed Thomas to conduct experiments that prove this not to be true at all.

If we do want to see a change in our process outcomes, one that we can predict with some accuracy, then we need to start paying more attention to the data generated from the behaviours of the people that create the end result. We need to start thinking about rewarding for the complete journey, not just the end result.

For example, you know the KPIs that cover your entire sales process and I would bet they are behavioural in their nature (e.g. 60 calls per day, next steps on every opportunity, sales stage advancing in a timely fashion). These KPIs are typically behavioural, because selling is a people focused sport. If you can drive more of the good sales behaviours, you will drive better results.

But do you track and manage to that broader set of behavioural KPIs? I would bet that you do not. Do you reward and track to the outcome of closed sales? I would bet that you do.

Alternatively, we could keep selling the ice creams and just offer safety advice with each sale or place a red flag on the beach to indicate no swimming. The narrative we create should always be challenged and the more supporting data we can generate to do so should be welcomed.

 

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