Testing the Sales Hypothesis

There is a question we like to pose to clients in our sales and sales management workshops:

How often in your selling career have you been caught off guard by a loss involving an opportunity that you were convinced was yours?

You gave it your very highest degree of confidence on the forecast only to receive the crushing news that you've lost to a competitor or worse yet, no buying decision was made at all. Besides the obvious embarrassment, there are painful business ramifications to an inaccurate forecast. Senior executives have been known to slash their wrists when, after receiving profuse assurances from everyone, a critical account fails to materialize. Why were opportunity assessments so far off the mark?

The reason may be due in part, to that pervasive selling malaise known as Happy Ears. Nearly every salesperson (and often their managers) contracts the dreaded Happy Ears Syndrome at some point in their careers.

Known to gleefully infect salespeople of all ages, creeds and color, Happy Ears strikes without prejudice. If not treated early and aggressively early in the buy/sell lifecycle, the result can be crippling. There is no known inoculation to prevent it other than common sense. The resultant impact can generate searing consequences. Bad forecasts have caused stocks to tumble, earnings projections to be missed and left promising careers in shambles.

As an undergraduate, we were required by my university to prepare a senior thesis which was, by design, to be rigorously analyzed and challenged using the scientific method as a testing process.  As a graduation requirement, candidates had to form a hypothesis relative to a subject of interest within their area of academic concentration. Then, using meaningful statistical analysis, the student was expected to either prove or disprove the hypothesis, defending the findings before a committee consisting of departmental faculty. There is a concept here that if applied, could have a beneficial impact on a selling organization's ability to better predict closing at the opportunity level. 

As in school, this effort will requires diligence and occasionally, a degree of behavioral modification. Some say that the mantra of a salesperson is, “hope springs eternal”, bringing to mind the false hopes and illusions of Willie Loman in Arthur Miller's Death of a Salesman.  An unsettling concern is that many executives forecast sales revenues based mainly upon the gut reaction, or opinion of a salesperson. Revenue performance forecasting based solely on opinion or false hope, is as much of a tragedy as that portrayed in Miller's story. That the practice continues suggests that there may be some fundamental shortcomings relative to pipeline validation practices.

Salespeople love to present their offerings on management's altar with great panache. In order to add a veneer of credibility, they'll crunch their forecast through the appropriate CRM machinations and present it on PowerPoint or a spreadsheet for all to see. Managers and higher-ups shudder in delight and anticipation, sellers preen in the spotlight and onto the forecast it goes.  Ironically, many of today’s CRM and BI solutions really are effective, provided they capture valid data.

Many sales professionals struggle with the ability to properly qualify a potential lead - even more destructive is the lack of disqualification skills. Sales leadership should define exacting criteria when identifying forecast milestones.  Fine - sure, every organization does that, right? Wrong, they lose their way with their process integrity, by not adhering to their own rules.  Soon, the exception becomes the rule.  If sellers and managers would leverage testing rigors to examine and test their opportunities against their milestone criteria the way they did in school, they would be much more likely to disengage themselves from non-opportunities and spend their time on more productive pursuits.  Testing should occur throughout the life cycle of the opportunity.

Here’s the problem, instead of testing the veracity of the seller's opinion based upon agreed upon events, and/or completed milestones, managers in their rush to judgment often add their own spin, further enhancing the illusion of imminent closure. Sadly, the root information is still suspect at best, because it hasn't been truly validated or tested.  Salespeople, and often 1^st line managers, are seduced into a costly, resource intensive, web of calculated disinformation, designed for a single primary purpose: to create hope in the mind of a desperate salesperson. This seduction facilitates a virulent breeding ground for Happy Ears Syndrome within a sales organization because now (remember our CRM?) it has been reinforced with technology. What happens when this forecasted opportunity continues up the food chain in a sales organization? 

Enamored in the glow of that which is state of-the-art, someone forgot to test the sales hypothesis. The forecast is not worth the powder to blow it up.