Sales Leaders, Did You Make the Right Decision?

By Michael Perla on Dec 7, 2016

It was a routine business day. I was in a corner office of a VP of Sales (a client), talking about the sales pipeline. During this conversation, he lamented to me about all the paperwork and reports he is asked to complete. “Sometimes I feel like I’m just re-arranging deck chairs,” he said. “We can stare at the numbers for days, but at some point we need to take action. I’m buried in data … and it’s not helping.”

So how does a sales leader find the right balance between data and decision?

In sales, there are a number of perspectives that seem at odds on the surface. For example,

  • Art vs. Science
  • Analysis vs. Action
  • Standards vs. Creativity
  • Relationship-Selling vs. Provocation/Insight-Selling

Data Dilemma

In the conversation above, I think most people would agree that the numbers or trends should inform your decisions, but at some point, you can get into an unproductive ‘analysis-paralysis’ loop. Like many things, the different approaches in sales are not dichotomous, but rather along a continuum of more vs. less. It’s often an “and” vs. an “or.”

Some clients I’ve worked with are more on the art side of sales, while others utilize a much more scientific and evidence-based approach. In a lot of cases, when it comes to decision making, more information or pejoratively, data, is not necessarily better. And make no mistake, sales and selling are all about making the right go / no-go decisions.

For example, do you continue to pursue a large, resource-intensive sales opportunity or to invest time, money and resources into a key account or strategic partner or a promising relationship? One classic adage in sales is to ‘lose early’ – in other words, from a time and focus standpoint, it’s better to determine if a sales opportunity is worth pursuing early-on in the sales process vs. in the later stages when your opportunity cost has skyrocketed. You can’t wait until you have perfect information – you will always be ‘bounded’ in some way. [i]

A Lesson from Horserace Handicappers

In a fascinating study [ii] of eight experienced horserace handicappers, more information was not necessarily better, and in many cases, was worse. The only thing more information did was make the handicappers over-confident, not more accurate. The researchers first asked the handicappers to make race predictions with five pieces of information. They then asked the handicappers to make the same predictions with ten, twenty, and forty pieces of information for each horse in the race. As other similar experiments have shown, the handicappers did not achieve greater accuracy with more information, but rather, more confidence that they were right.

So what does this mean for sales?

The VP of Sales was right; staring at more-and-more data is not the path to enlightenment or better decisions. As the handicappers study suggests, it’s often better to have a few pieces of the right information vs. the detritus of a CRM system gone bad.

Decision-Making with Imperfect Data

The one recurring theme I continue to hear from first-line sales managers is that they’re over-loaded with methodologies, process and information. In a world of big data and Google, it seems that the master skill today – for almost any job – is the ability to sift, sort and synthesize the critical few pieces of information that best predicts an outcome [iii]. In sales, this skill is only amplified and intensified given the readily available and visible outcomes that sales produces – pipeline created, wins and losses, revenue produced.

In a late afternoon discussion on that same cold December day with the VP of Sales, we talked a bit more about the information dilemma … “I think senior leadership thinks we should be able to perfectly forecast our sales given all the tools and technologies we have … but it’s just not the case. I spend more time figuring out which reports [and I get too many] are really accurate than I do in figuring out what they really mean.”

“I think quality vs. quantity wins-out in a lot of areas in sales,” I said, “… pursuing the right leads and opportunities and focusing on the right accounts is often more important than the right activities on the wrong accounts. It’s all about making the best decisions we can with imperfect and incomplete information and then adapting and adjusting as more information comes in.”

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[i] Bounded rationality [i]is the idea that in decision-making the rationality of people is limited by the information they have, their cognitive limitations, and the limited amount of time they have to make a decision.

[ii] Paul Slovic, "Behavioral Problems of Adhering to a Decision Policy," unpublished manuscript, 1973.

[iii] See the book by Barry Schwartz, The Paradox of Choice, which describes why and how we respond negatively when confronted with too many options. In general, buyers don’t want to determine which options matter and which don’t. They want the seller to make the effort of determining which solution options best match their needs, desires and objectives.

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Michael Perla

Written by Michael Perla

Michael Perla is a contributing writer to Symmetrics Group's blog and co-author of the book "7 Steps to Sales Force Transformation." Michael specializes in providing actionable insights to marketing and sales organizations to help them increase pipelines, win ratios and productivity. In addition to working as a sales performance consultant, Michael has worked as a sales overlay, head of sales operations, and head of strategic marketing planning. Michael currently serves as a Director of Business Value Services at Salesforce.

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