I think this is more a new thread than it is a ‘spanner in the works’!

Can you provide a concrete example of the method you reference it and how you’ve applied it?

Justin

What a great debate between the two people who I consider leaders in their respective frameworks. Michael coming from the Six-Sigma camp and Justin from the TOC camp.

Can I throw a spanner in the works (and geographically take an entirely different position!)?

If we map the decision making process correctly, (based on interviews with clients, coaches, technical people and the sales and marketing team) then we can move away from the terrible CRM software fix which is the bain of all our lives and into a sales stage and gate process which can be controlled by utilising either or both frameworks.

I have recently been using parts of the TRIZ framework and have been getting good results using function analysis and Trimming both with external clients and internally with sales of research projects. The great thing about using function analysis is that sales teams take to it like a proverbial duck to water and are quite happy to share the concept with their clients as they feel in control and are offering extra value.

best regards

Andrew

As a colleague pointed-out to me offline, any statistic must be quoted in two parts, the central tendency and the range. In major-account environments you are likely to find that the range is so large as to render the central-tendancy measurement meaningless — particulary if the time-horizon is ‘years’ as you suggest.

Justin

It is true that sales forecasting is more difficult in the kinds of environments you describe. However, it is not impossible.

First, you are absolutely right that applying statistical techniques to opinions destroys information rather than creating it! The way most sales organizations and CRM software approach the issue is foolhardy.

Yet, if you know how, you can definitely help salespeople produce a more statistically valid forecast. The key is to rely not on their independent opinions or feelings, but to help them develop a list of relevant observable facts about their deals. Such general things as “extent of the prospect’s pain,” and “our relationship with the decision maker” can be resolved into specific, observable, concrete characteristics or customer behaviors.

If you:

1) help salespeople develop a list of assessment questions scoring those characteristics on a likert scale,
2) ask them to score and track the outcomes of a statistically significant number of deals over time, and
3) statistically analyze the data,

you learn some amazing things. One of the things you learn is which of the questions are statistically relevant (often not what salespeople think it would be). Another is that there is a “tipping-point” … a narrow range of scores below which there is almost no chance of closing, and above which there is almost a 100% chance. This is what everyone is looking for around sales forecast accuracy. After re-designing the questions based on the results of the statistical analysis, you end up with a forecast indicator that is usually better than 90% accurate. You need a savvy statistician at your side to pull this off, but it has worked every time we’ve done it.

Of course, in the kind of environment you describe (large complex deals with a slow cycle) it might take years to get enough data to follow the steps above. However, it is still possible to make an improvement. After having done these across a range of industries, there are patterns in the data which point to the kinds of customer characteristics and behaviors that are likely to be root causes for wins and losses. Designing a qualification/forecast assessment around root causes that have been valid in the past is likely to provide a better forecast assessment than relying on the company’s salespeople’s gut feelings, and will most likely provide something closer to the statistical reliability your clients want.

If you or your clients would like to try out this approach, I’ll be happy to provide assistance. I’ll be releasing a book about this kind of project as part of the Sales Process Improvement Series, probably in February.

Michael Webb
http://www.salesperformance.com