A Cambridge professor once used an example in a course I recently attended. “You want to know how your hiring process is performing? The easy way would be to look at who you hired and ask how well they are doing? The better way would be to ask how those you rejected are doing.’
The challenge is that it is more difficult to get that information, so you go for the easily available data instead. This is what is called ‘availability bias’. You use the data that is easily available to you to assess your performance rather than use the data that would be the best to assess your performance.
In sales we often do the same. We focus on the data that is available to us, our revenue performance against our target and/or against last year. Of course, revenue numbers are essential to see if you’re on course to achieve your top-line financial goals. However they don’t tell the full story.
Revenue numbers alone don’t answer questions like:
- Is your sales process optimal?
- Is your customer acquisition approach effective?
- Are you focusing on the right customers?
- Do you have too much customer churn?
- Are all your sales people executing activities that truly make a difference?
- How effective are your coaching methods?
- Is your Unique Selling Proposition (USP) consistently communicated?
- Are your customers satisfied?
- Are you leveraging your competitive advantage, if you have one?
- Are your sales tools being fully leveraged with maximum adoption?
- Is your sales organization the most effective it can be?
- Do your salespeople spend too much time on non-value-added tasks?
This is not an exhaustive list, there are many opportunities to be more effective, deliver higher value, accelerate growth and improve performance. However, focusing on all these aspects simultaneously is impractical, and most sales leaders are too busy “flying the plane” to address any of them.
This is where getting an external perspective comes into play. Often, we wait until revenue or profit numbers decline before seeking external help but this approach is not a recipe for sustainable growth. Creating a constant improvement process allows you to stay ahead of potential downturns by fostering continual improvement.
As an anonymous quote aptly puts it, “Collecting data is one thing, but knowing which data to collect and how to interpret it is what sets apart the successful.”