Sales is unforgiving.
Finishing second in the Olympics, the NFL, or the Masters earns you automatic and enduring fame. And fortune. Heck, the commitment required just to earn a spot 1n any of those events is a worthy accomplishment.
Finishing second is sales is different. Finishing second in sales is finishing last. Finishing second earns recognition, but not appreciation.
Just as games and competitors are unequal, so too are sales opportunities. Winning a coveted customer from your toughest competitor often requires an error-free performance. In other circumstances, a ‘good enough’ effort can result in victory. What are the causes of such variance?
When you’re driven to improve business results, it’s critical to understand why you win — and lose. Only then can you make the deliberate and correctly selected adjustments that improve your performance. Startups refer to such adjustments as pivots.
A win-loss analysis (WLA) is one tool that can help you identify the correct adjustments to make. Sadly, few businesses ever perform such an analysis. Even a casual WLA has value over no review at all. Purposeful improvement requires the use of tools like WLA to learn your ‘blind spots’, those performance barriers that aren’t obvious, but exist nonetheless. Uncovering barriers and blind spots requires more effort than a hand wave. It requires deep learning.
‘Moneyball’ popularized the use of statistics in sports to explain individual and team performance. In professional sports, the payoff from learning and acting upon small advantages can be measured in millions of dollars. One doesn’t need to understand the Massey-Thaler research to know that better decisions win games. And money.
The Moneyball metaphor is finding its way into new arenas, including sales. What is true for professional sports is also true for sales. Small advantages can result in millions of dollars.
I recommend that leaders use a Moneyball strategy for sales and marketing.
Most functions in an organization are deterministic. Think ‘if-then.’ When you do certain things in a certain way, you get the desired result.
Sales, however, is not deterministic. Sales is probabilistic. You can do all the right things, and get an undesired result. Business statistics nationally suggest that only 40% of forecasted sales deals are won. Some report that figure at less than 10%. The probabilistic nature of selling is a key reason that selling is so challenging. But those dismal statistics can be improved.
Using a fact-based approach can significantly improve your sales success.
Rather than considering deal losses as negative events, there are ways that you can extract value. That happens when you learn from losses. This approach can help you uncover what I call your Optimal Sales Pathway (OSP). This pathway begins with the earliest stages of your buyer’s journey (look for a future post).
In this post, I’ll offer thoughts on strategy, then suggest concrete steps for you to consider.
I recommend beginning with 4 questions. My questions are inspired by Peter Drucker’s 5 Essential Questions. You will find these questions easy to ask, but not easy to answer:
- What is our mission: why does our company exist, and what are we trying to accomplish?
- Who is our customer? Which types of customer (business? Consumer? Sizes, locations, etc) do we want to capture and serve?
- What does our customer value? This question may be the most important. It’s also the one question which many businesses do not have a thorough understanding.
- What are our results: what have we accomplished to date, and what would we like to accomplish. This question is where WLA can help.
- Then, what is our plan: given our responses to questions 1–4, what do we plan to do, and to not do. (Look for another upcoming post on the 5 choices in change). This is your change plan, or pivot plan.
All of Drucker’s questions are important. Questions 4 and 5 are among the most vexing.
The discovery effort you invest will help you gather crucial insights. Those insights help you convert beliefs and gut instincts into facts. That occurs from converting unknown feelings into known, actionable steps. Ask yourself:
- What is worth measuring?
- What is the ideal value?
- What prevents the ideal from occurring on a consistent basis (>95%)?
- When the metric is not ideal, how bad/far from ideal must it be before you fix it?
Let’s expand on these 4 questions before you being picking what to measure. There are hundreds of metrics from which you can choose. Yes, hundreds.
“What’s worth measuring” is clear, right? No ambiguity, huh? Try asking everyone on your team who should know that answer. Chances are you’ll find that your key people don’t have 100% clarity. When clarity is a problem, you’ll want to develop tools to educate those who should know it to know it. And by ‘know,’ I mean more than the mere recognition of a metric. They must be able to explain it. And explain why it’s relevant. That point may not sound significant. It is significant. Invest the time to educate your team. If you won’t take the time to educate, develop, and enrich your team, they won’t enrich you.
Ideal value. Think of ideal value as the product of exceptional performance. Not just good. Not just great. Exceptional. A thing worth doing, and worth measuring, is a thing worth doing exceptionally well. Exceptional performance gets exceptional recognition. And exceptional compensation. ‘Nuf said.
What is the cause (often causes) of why your team and/or your process isn’t producing the ideal value? Digging deep to find the sources and root causes may (will) uncover unpleasant realities. Deal with it. That’s what leaders do. (For inspiration, read “The Stockdale Paradox” passage from Jim Collin’s classic Good to Great).
When you do uncover gaps, what distance from ideal will cause you to act? Small performance deviations may not justify the cost to improve them. Don’t guess or suppose. Do the math. Understand the “cost of now” so you can make informed choices. Achieving the mastery required to guide your team to exceptional performance earns exceptional results. (One caveat: Don’t bother measuring things if you don’t plan on improving them. You’ll only frustrate yourself, and prove your commitment to excellence to colleagues and clients...)
With a stronger strategic foundation, its time to look at what to measure. Here are 5 metrics worth knowing that you may not be measuring. These are items that you can — and should know, and measure. For you to succeed faster and more often, consider these go-to-market elements:
- Story and storyteller performance rankings. There are members your company’s sales effort who are superior storytellers. And they tell better stories. These stats should be known, measured and celebrated. Your best storytellers may have had theatrical or presentation training. Do the analysis to find the story paths and storytellers that are superior to others. The differences may be small, or may be significant. Moreover, you may discover that one story does not fit all situations. There may be stories that are a better fit for certain scenarios.
- Product/service performance rank. Your offerings (products, services, solution, etc) are built for a certain client type. The Who and Why realities of your product demand may differ from the Who and Why intentions for which your solution was designed. If you don’t know that answer, it's critical that you discover it. Don’t guess. The key drivers may be employee count, problem complexity, or industry segment. It could include IT environment, or business scenario (growth, cost savings, streamlining, etc). Test, analyze and then communicate those insights to your sales and marketing teams so they can adjust to the facts.
- Optimal client profiles. As with other factors, you’ll find that there are optimal client types. I mention types, as it is now rare to have a single individual make ‘the decision’. Your profiles can include role, or age, or time with the organization. Perhaps education or field of study is critical. Test and understand the unique or combination of factors that determine your optimal values. Your findings should then drive your persona based marketing, your content strategy, and sales campaigns.
- Client scenario profile. Every client has a scenario from which they are operating. The scenario always involves switching from another solution (traditional or internal). Always. How do they view their motivation for action? Are they solving a problem, optimizing a process, or capitalizing on an opportunity? Their goal could be to automate a process. Or to reduce cost. Or increase speed. Or enhance reporting. Know what those factors are, as they should be a component of your early-stage qualification process.
- Weakest competitor. This may sound easy. In most cases, the effort to get factual answers will be hard. Who and what are your competitors? Again, get facts. Guessing doesn’t work. This work may require extensive analysis to reveal which competitor is most vulnerable to your solution. Is the competitor a product? A process? A key person who developed an internal tool? You must dig down to understand what and why. Uncovering these answers helps you sharpen your message, prospect selection, and your tactics.
I remarked that there are hundreds of metrics that you could gather and measure. NPS. CLTV. Channel specific acquisition costs. Segmentation-based activation times. Scenario-based referral efficiency. Size based disqualification rates. You could purchase shiny new analytics tools. They can help you feel more informed by measuring more. Unless you measure your relevant factors, you’ll drown in data, yet starve to find the right actions.
What is true in healthcare is also true in business improvement: the right treatment begins with the right diagnosis.
Richard Janezic leads Ascenceo, and brings 30 years of award-winning business experience to help founders, executives, investors, and boards of growth stage companies enjoy greater results, financial strength, market share and valuation. Rick also comments on Medium, Google, Twitter, and Instagram.