Accurate ratios, statistics, and other numbers are essential to a well run, profitable business or sales career. Salespeople and entrepreneurs are really good at skewing our own numbers and even hiding them from our busines partners and salespeople. We tend to be impatient, put all our eggs in one basket, get our emotions involved, or simply measure the wrong things. And if you don’t measure correctly, you can’t manage correctly.
I read the following on LinkedIn:
“During World War II, the Navy tried to determine where they needed to armor their aircraft to ensure they came back home. They ran an analysis of where planes had been shot up and came up with this. Obviously, the places that needed to be up-armored are the wingtips, the central body, and the elevators. That’s where the planes were all getting shot up. Abraham Wald, a statistician, disagreed. He thought they should better armor the nose area, engines, and mid-body.
“Which was crazy, of course. That’s not where the planes were getting shot. Except Mr. Wald realized what the others didn’t. The planes were getting shot there too, but they weren’t making it home. What the Navy thought it had done was analyze where aircraft were suffering the most damage.
“What they had actually done was analyze where aircraft could suffer the most damage without catastrophic failure. All of the places that weren’t hit? Those planes had been shot there and crashed. They weren’t looking at the whole sample set, only the survivors.”
Jim Rohn said that we should measure our success by what we have sowed instead of what we have reaped, which is partly true; I am apt to suppose that fishing in a drum of sardines is a less efficient form of sowing that dropping your line into one containing salmon. Demographics, past experience, a changing world, our competition, and our sales teams’ training, the tools they have, and the way we manage them all come into play.
During a feedback session with my salespeople, I read their reports and then picked up the phone and randomly started calling those who were reported as having been called upon in full view of all the salespeople. That was the end of false reporting and hence skewed statistics. When I cut my beard off, my sales doubled. This has been my experience with every one of my salespeople and Distributors who removed their facial hair. Little things can mean a lot.
Making the sales, only to have the ball dropped along the way by the administration, production, delivery, or some other department will also skew future sales and referrals ratios. Monitoring calls and using cameras to review customer service, delivery, upselling, and other physical and verbal aspects of one’s business will reveal a lot and allow one to measure more.
Outside sales training and consulting help a lot because they tend to remove the fear or disrespect of known personalities, cast a new perspective, uncover previously hidden or ignored aspects, and measure more accurately. Many business owners and salespeople fear and avoid customer feedback, and yet it is very useful when the source is anonymous. We know that referrals enjoy a far higher closing ration than cold calling and are much more profitable sources of business than expensive advertising and random pitches. So customer feedback, testimonials, and referral numbers and rewards should be built into your systems.
The cleanliness of your store, shop, uniforms, and vehicles, your personal grooming – everything about you and your business, especially your signage, as well as the use of coupons, vouchers, gifts, commissions and rewards for referred business, profit sharing, altered business hours, specials – many things can make a huge difference to your bottom line, but it must be measured to know if it works or not. And many small increases can add up to a big difference.