Think numbers don’t lie? Here are three ways you can be led astray

by on January 4, 2013 · 0 Comment POSTED IN: Top Sales Dog
numbers

Nearly everyone in sales tracks their numbers. Everything from calls made to contracts signed gets followed closely. You name it and someone tracks it.

There are a lot of good reasons for this, of course. Following the numbers can reveal when we are doing something wrong, or something right – whether we need to pick up the pace or try something different.

However, there are situations in which following the numbers can do more harm than good.

Here are three common ways you can get messed up:

1. Paying too much attention to the positive numbers. Many sales professionals track various ratios, averages, and other metrics. In terms of performance, some numbers will be positive and others negative.

It’s human nature to focus on the good signs and downplay or rationalize negative data. Problem: If the negative data is significant and you give it the brush-off, you risk damaging your business.

Example: Sales volume is up on large contracts over the past three or four months. How exciting! It is tempting to focus on large contracts going forward. But other numbers may tell a different story: What if the margins have shrunk as a result of discounting or higher delivery costs or more service handholding?

We tend to avoid confronting the negative side of any issue. But you need to look at your business as it really is. Taking steps to correct or eliminate the negatives may be more important than emphasizing the positive.

2. Adopting “the new normal” too quickly. Like pro athletes, we all have streaks and slumps. Your numbers will move up and down over the short term, but short-term trends are often misleading. It is the pattern that emerges over the long-term that matters.

However, too many sales pros and their managers become obsessed with short-term numbers. The problem, of course, is confusing a short term ebb and flow with a complete sea change in the business.

Don’t think that what happened to your numbers over the last two or three months has somehow morphed into a new reality. That’s highly unlikely. Take the long view of any up or down trend, without over-reacting.

3. Making the numbers match your version of reality. There’s an old saying in financial circles: “You can make numbers say anything you want.”

It’s true that you can spin things however you want – we’ve all known sellers and managers who are adept at finding ways to make numbers match their version of the truth.

Example: At a seminar recently one Realtor bragged about having built a 90% referral-based business. Pretty impressive, right?

But when asked how many actual clients came from referrals last year, she said “nine.” It wasn’t that her referrals were good; the rest of her business was bad. Yet she focused on percentages because it reinforced her conviction that she was great at getting referrals.

To avoid falling into traps like these, don’t cherry pick the numbers you like and downplay the ones you don’t.

Let them speak to you honestly and listen to what they are saying – rather than what you want them to say.

Source: A posting by Paul McCord. For more, visit http://salesandmanagementblog.com

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