Monday, April 14, 2014

Sales, Data and Horse Manure

Sales to the Symes family is like murder to the mafia: A birthright.

For generations, if you didn’t sell you didn’t eat and my grandfather made sure no one went hungry. Every day at six am he was out on the ‘knocker,’ going door to door in some of the richest areas in London. His product: Horse Manure.

It makes me laugh when sales reps tell me their product is crap. They should try selling real shit for a living.

I grew up on stories about my grandfather: How he dressed (tidy), how he listened (well) and how he always had an answer. Most people think of salespeople as chancers. The Symes family don’t. They think of sales as an art. Two generations later, my father sent me to school with the kids of the parents my grandfather had sold horse manure. Money talked and shit-selling walked us into the halls of high society.

I thought sales would be easy. It wasn’t. In my first job I was given a phone and a computer and told to ‘make money.’ After my first day, I wanted to quit. After a week of rejection I decided I was an embarrassment to myself and my family. However, after six months I cracked it. I could sell. I was a Symes. But I couldn’t tell you why I was good at it or what had changed. And as I looked around the office, I saw the same problem. Everyone knew who the top billers were. Everyone knew who the bottom billers were. But no-one knew why.

Business relies on salespeople but doesn’t understand them. That’s not to say there is a lack of opinions, just a lack of objective opinions. The business world mostly shares the Symes family bias that sales is an art and, like magic, can never be fully understood.

The problem is that if we can’t understand elite performance, how can we replicate it?

This problem bothered me. So I set out to solve it. Over twelve months I read every book and academic article on decision-making and data science. I travelled all over the world meeting the smartest people of several generations and asked lots of questions. I could write for hours about what I found, but here are the three things that matter.

  • Humans are biased.

  • Data beats intuition.

  • If you hire smart data scientists, you can understand and replicate elite performance.

The more I travelled, the more I realised sales wasn’t an isolated example. Most industries remain clueless on how to understand and improve elite performance until an outlier among them embraces data-driven decision making.

Perhaps, the greatest story of data science re-defining elite performance is the Baseball team the Oakland Athletics as written about in Michael Lewis’s bestselling book Moneyball. For years, baseball executives, like sales managers, had measured what they could see: Speed, Height, Home runs. But because they were relying on their eyes rather than data they had missed important activities that were far more predictive of success. The Oakland Athletics exploited their competitors bias by hiring data scientists to find undervalued players and were able to outperform far richer teams as a result.

Data in the 21 Century is like Oil in the 18 Century: an untapped, immensely valuable asset. And like Oil, for those who see Data’s fundamental value and learn to extract and use it there will be huge rewards.

Yet, businesses have generally received poor returns for their investment in data collection tools, mainly because they’ve only used it measure the quantity of their salespeople’s interactions. How many calls or visits are often not indicative of a salespersons success. In fact, it’s the ‘more activity’ rhetoric that dumbs down our profession, scares customers and treats salespeople like monkeys. Salespeople don’t need to work harder. They need machines to work harder so they can work smarter.

Data Science is able to go beyond measuring the quantity of interactions and instead measure the quality. We know some salespeople are better at selling on the phone than others. Until now, we’ve never known why. Voice analytics can now transcribe phone recordings in real time, analyse the buyer ‘s sentiment and tell a salesperson how to improve their phone call for next time. Imagine, scaling that learning across a whole division, a team, a company. Imagine if you could not only improve your top billers but improve your worst.

The same innovations can be applied to email. When is the best time to email a client? What is the best thing to say? Sentiment analysis again can give you real time feedback. We recently showed a multi-national media company that each division had more success emailing prospects on different days. Simple advice. A simple uptick in sales should follow.

Targeting customers hasn’t changed a whole lot since my Grandfather’s day. He looked for the richest streets and knocked on their doors. Businesses often look for their biggest customers and do the same. However, give this problem to a data scientist and he doesn’t give you a list of who to sell to. He gives you a list of who isready to buy.

Smart PHDs can use years of historical data from a company’s database as well as a myriad of web and social media feeds to see what is happening at potential customers in real time. This means salespeople can spend less time prospecting and more time selling.

More efficiency, more sales, more customers, more money and all for the price of a PHD. Marginal gains are everywhere.

The Oil rush is on. The slower salespeople move to embrace it, the faster they’ll die. Business must learn the lessons of Moneyball. Embrace data-driven decision making and improve performance or get trampled on like horse manure.

My Grandfather understood the value of a hidden asset. One man’s shit, really is another one’s gold.

Source: B2C_Business

Sales, Data and Horse Manure

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