Are You Being Cut by Occam's Razor?

Sellers were not achieving their goals. Industry guidelines and peer group comparison indicated that 60% of the sales team should be attaining quota, yet in this case the inverse was true. Overall sales were trending down 6% a year while the market was growing.  Sales leadership had been transitioned, turned over that is; yet the trend continued.  Was it time for another shave of the sales leadership? That was the simplest answer, the CEO cited Occam’s Razor 1.

Digging into the data, some disturbing trends emerged, top performers were leaving the company. The same people who appeared in the top 60th percentile of quota attainment were leaving, year over year.  When exit interviews had been conducted, the common reason for leaving was “better opportunity.”  We put more research into the top performers who jettisoned over the past year. Forty-one percent had moved to competitive upstarts and related how they were continuing their success.  Unanimously, all the exited top performers pointed to the enhanced or improved product they were now selling. 

At the same time we were digging into win-loss details, this was a new concept for the organization.  During the thirty plus interviews, we discovered buyers had a higher perception of competitive offers, service and value. 

The findings were met with disbelief, denial by the executive team; this was a market leading firm, with superior products and services.

Our assessment continued to shave away at the executive hypothesis that sales needed a refresh. Marketing leads converted to 9% revenue, well below industry standards of 19-25%.  Fewer prospects were evaluating products on this organisation's website versus others, and the numbers showed gradual erosion.    Price compression, measured by average selling price, was 8% per annum.  While the number of support calls remained flat, the number of escalations was rising monthly. We continued to accumulate evidence until we had shaved the executive hypothesis clean, exposing which product strategies needed refreshed.

Organisations often misdiagnose growth challenges as shortfalls of strategy or execution in marketing and sales.  Sometimes it is hard to see the forest through the trees, when you’re standing in the forest.  People often forget, William of Ockham’s original inductive razor referred to distinguishing between two hypotheses either by "shaving away" unnecessary assumptions or cutting apart two similar conclusions; it is not “the simplest explanation is usually correct.”

Want to know if your product strategy is keeping up with market conditions?  Before your top talent jettisons?  Ascendiosa can help.

1. Occam’s Razor, https://en.wikipedia.org/wiki/Occam's_razor
   
   

Author:  Mark Miller is Ascendiosa’s Chief Commercial Officer

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