I don’t know about you, but I’ve been more than guilty of falling in love with the tallies on the sales report. I’ll read the report and assume that those whose names line up with the strongest numbers are the best salespeople. There’s only one small problem: a sale is a result, not a behavior.
We’ve all heard the famous saying, “Hindsight is 20/20.”
In fact, we’ve heard it so many times we simply accept that it is true.
One problem. The saying is largely inaccurate.
According to Nobel Prize-winning psychologist Daniel Kahneman, we commit an egregious error when we mark our victories and defeats based solely upon the outcome.
Instead, Kahneman asserts we would be better-served to look at the behaviors rather than the results.
In the world of sales, we find a consistently nasty culprit: the Almighty Sales Report.
I don’t know about you, but I’ve been more than guilty of falling in love with the tallies on the sales report. I’ll read the report and assume that those whose names line up with the strongest numbers are the best salespeople.
There’s only one small problem. A sale is a result, not a behavior.
The sales report shows me the outcomes, but it does not reveal the actions taken to reach those outcomes.
And as a golf coach of mine used to say, “Just because the ball went straight doesn’t mean you hit it properly.”
At this point you might be thinking to yourself, “What’s the point? As long as there are sales in the bag, we win. Right?”
Maybe. But what if you could have won bigger? The sales report only shows us how many sales each sales representative made. The report does not show us how many sales we missed.
Let’s suppose your sales reps have a goal of selling ten widgets.
At the end of the day (week, month – whatever) they talked to forty potential clients and sold not ten but twelve widgets. Twelve! 120% of the goal. Boo-Yah!
[And lo – there was much rejoicing!!!]
But what about the important information we fail to deduce from the sales report?
What happened to the other twenty-eight people?
I mean, the salesperson talked to forty prospects and sold twelve units. But twenty-eight prospects remain unaccounted for.
Look at it this way.
When is 120% of the goal considered a bad week? Answer: when 150% could have been possible.
The sales report carries the danger of being a mismanaged tool that furtively promotes an unhealthy measurement of success.
Let’s change our perspective a bit.
Suppose a sales representative consistently displays all the right behaviors – phone calls, appointments, closing questions – yet only comes up to 80% of the sales goal. Should he/she be considered less competent? Even reprimanded?
The danger here is that we are rewarding (or punishing) based upon outcomes, not behaviors.