Sales and Sales Management Blog

September 15, 2012

Numbers Don’t Lie? Oh Yes They Do


How many times have you heard that one that numbers don’t lie?  Probably like me you’ve heard it thousands and thousands of times. 

And we in business, especially sales, love numbers.  We track everything that could possibly be tracked with a number—the number of calls made, the number of times someone answers a call, the number of appointments set, the number of contracts signed, the number of pencils used, the number of no’s we get, the number of contacts made before we get a yes, the average commission earned, the ratio of calls to appointments, and the list goes on and on and on.

We live our life by numbers.  We rival baseball in how fanatical we are about numbers.

We swear by our numbers. 

We live and die by our numbers.

Our numbers tell us when we’re doing something wrong and when we’re doing something right.  They tell us whether to be happy or sad.  They tell us if we can bitch slap Joe in the next cubical this month or whether he is going to be slapping us.  They tell us how much swagger to put in our step, whether we need to pick up the pace or if we can take a weekend off, whether we should answer that call from our boss or ignore it.

We also do some really stupid things because of our numbers.

I’ve had sellers get all giddy because their close ratio is super high or because their average contract has skyrocketed.

I’ve had sellers totally transform their way of doing business because they’ve busted through to a new level.

I’ve had sales leaders beef up personnel because their teams have finally got it and the sales are flowing through the door.

Some of the situations above were perfectly justified.  In fact, in some of the cases the seller or sales leader had waited too long to make the proper adjustments.

But in way too many cases the sellers and sales leaders have overreacted and ended up doing great damage to themselves and their company.

In all of the above cases decisions were made based on hard, cold, concrete numbers.

So how come some make wise decisions based on numbers while others make disastrous ones?

In my experience there are three major reasons why the numbers don’t tell the real story:

  1. Emphasizing the Wrong Numbers.  Most companies and a great many sellers and sales leaders keep track of a large amount of data such various ratios, numbers, averages, and such.  At any given time some of this data is positive and some negative in terms of our performance. With so much data it can be easy to get lost in the forest of “stuff.”  It is even easier to drift toward the positive numbers and downplay or even ignore the negative data.  If perchance the positive numbers are the truly significant ones and you act on them, you stand an excellent chance of growing your business. On the other hand, if the negative numbers are the significant data and you brush them aside to concentrate on the positive numbers, you stand a very great chance of pursuing numbers that will damage your business.I had a client whose data indicated that their average sale for the past two quarters was over twice their pervious average.  But the data also indicated that the profits from those sales had declined substantially due to increased sales and delivery costs.  Which number got them excited?  Bigger contracts.  Which numbers did they assume were aberrations?  Increased costs and decreased profits.  What did they do?  They concentrated on going after larger contracts and consequently suffered a major hit to their bottom line.Using a very critical eye when analyzing what is happening in your business—whether the analysis is of a large business with tens or hundreds of millions at stake or your own sales business where your personal income is on the line—is critical.  We all like to see those positive results from our hard work and hate to confront the negative.  But the only way to grow our business is to look at the business as it really is which often means correcting or eliminating the negative is of more immediate importance than expanding the positive.
  2. Taking Too Short a Time Span as the “New Normal.”  Each of our businesses changes over time.  We all reach new plateaus or crater to new depths.  We all have winning streaks as well as slumps.  Our numbers ebb back and forth while over time remaining consistent or possibly increasing or declining. That constant near term change creates a long-term pattern. Although the near term ups and downs are important, it is the long term pattern that is most vital to telling us what is really going on in our business.  Unfortunately too often we get caught up in the short term change and convince ourselves that it marks a sea change in our business when in fact we’re simply on a short term roll or in a short term slump.  This isn’t to say to ignore short term trends, but rather that they must analyzed in the context of our long term history.If you’re a sports fan you’re more than a little familiar with short term rolls and slumps.  You live and die each season based on the streaks your team or a particular player is on.  Those streaks are one of the reasons they play a complete season and why players are paid based on a history of production and not based on short term bursts.   Hot and cold streaks come and go but over the long term their real win/loss or batting or passing record emerges and reveals their strengths and weaknesses.It is easy to get suckered into believing that what has happened over the past few weeks or months is the new reality.  It may be.  More than likely it isn’t.  Numbers have a way of being consistent and working themselves out over a long period of time.  Those short bursts and potholes get washed out over the long term.New plateau or momentary spike?  Only time will tell—but far too many businesses and sellers turn on a dime when they should be holding steady based on what’s happening today in relation to what their long term history has been.
  3. Ignoring Reality and Making the Numbers Conform to Their Pie in the Sky Hope:  In a sense, you can make numbers say anything you want them to say.  Good can be bad and bad good if you know how to spin them.  And many a manager and seller are good at spinning to make their numbers conform to their own fantasiesA few years ago I was speaking to a group of Realtors about building their businesses through referrals and how to become a referral based seller.  One lady raised her hand and proudly proclaimed that her business was already referral based because over the past year almost 90% of her business came from referrals from clients.  I and the rest of the group were duly impressed—until I asked her how many new clients she had acquired during that time.  Nine was her answer.  Hell, with nine new clients over the course a year she wasn’t a referral based seller, she wasn’t even in business.  But she had convinced herself that she was going great guns in the referral area.Too many find it all too easy to take a number they like and force it into a story that makes them feel good.  The sad part is they so often believe their own BS and must then suffer the consequences.

The truth is numbers don’t lie, we do.  We lie to ourselves; we cherry pick the number we like and ignore the one we don’t; we react to the immediate without regard to history. 

So I apologize to numbers that I so callously accused of lying.  They’re innocently just doing their job; we’re the guilty party taking them out of context and forcing them to represent something they don’t.

The moral of the story is simple—let numbers do their job.  Let them marinate for a period before trying to declare them to be shining a light on a completely new path; let them say what they’re trying to say instead of what you want to hear; and by all means, don’t force them at gun point to be an accomplice to a personal crime of self deception.

Now, go in peace and sin no more and your numbers will faithfully lead you in the right direction.

Connect with me on Twitter: @paul_mccord

On Facebook:  http://www.facebook.com/McCordTraining

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1 Comment »

  1. I think the fact also of what perspective people see numbers from like background, area of expertise, area of responsibility can create situations where the wrong things get measured! Looking at how different parts of the numbers impact the busines processes is also a good way to align numbers to results!

    Comment by Raul Colon (@rj_c) — September 16, 2012 @ 7:13 am | Reply


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