Could Lost Deals Correlate with Sales Success?

The New England Patriots’ new head coach Jerod Mayo picked up his first win and loss in the first two weeks of the NFL season.  I read in the Boston Herald that he is only 177 losses away from tying the NFL coaching record for most losses by a head coach, currently held by both Bill Belichick and Tom Landry.  Since the Herald article was focused on losses, my first reaction was, do they expect him to be that bad? Then I thought, do they expect him to be that good?

Being a baseball-first guy, I remembered that Babe Ruth, the Home Run king until Hank Aaron eclipsed his record, struck out more than any other batter.  Not wanting to publish anything untrue, I visited baseballreference.com and learned that the Babe Ruth record isn’t close to being true. Reggie Jackson has struck out more than any other hitter with 2,975 strikeouts accounting for 26% of his at-bats.

Then I looked inward.  Over the past nearly forty years at the helm of Kurlan & Associates, I’ve struck out on some opportunities too but never gave those losses any further attention, energy or life.  Taking a closer look, it seems there were a LOT more strike outs than I remember.  I looked at the data going back to when we began using Membrain nearly ten years ago, to see that my running win rate is 86% of the closable opportunities.  But that’s like the baseball statistic batting average on balls in play, which doesn’t account for strikeouts!  So when I measured my win rate by all opportunities (at-bats), including prospects with whom there was no real opportunity, and those we could not qualify, my win rate is only 44%.  So if we tie win-rate directly to baseball and define a sales loss the same as we define a strike-0ut, I struck out in 56% of my at-bats.  I should go back to playing baseball!

Do lost deals – or strikeouts – correlate to sales success?

Unlike most of my other 2,000 articles, I don’t have enough data to back-up my conclusion, but I’ll try without a complete data set.

In baseball, most, but not all home run leaders strike out more than 25% of the time.  I found two exceptions and there are probably others. Derek Jeter hit 260 HR’s in his career which, spread over 20 seasons doesn’t make him a slugger, but he is an outlier with a 16% strikeout rate.  Tony Perez was more of a HR hitter than Jeter, as he clubbed 379 of them over 24 seasons.  His strikeout rate was only 21%.

I don’t believe one can always swinging for the fences, be a prolific home run hitter, and not strikeout a lot.  It’s a clear example of risk vs. reward.  Similarly, I don’t believe one can be a consistently great sales producer and not strike out a lot.  But are there reverse correlations?  Will a batter who strikes out a lot hit a lot of home runs?  It turns out the answer is yes.  According to the data, the batters who strike out the most do indeed hit the most home runs. Those who try for contact have lower strike out rates and higher batting averages.  Those who swing for the next city whiff more than they succeed.

Pivoting again, is there a reverse correlation in sales?

Unfortunately, there is no evidence to suggest that a salesperson who strikes out a lot will consistently produce a lot of business.  That said, not all salespeople who produce a lot of business strike out a lot.  Pipeline building is the single deciding factor that determines the long-term success of a salesperson.

Good salespeople that consistently fill their pipelines with new opportunities will close a lot and strike out a lot. Good salespeople who don’t keep their pipeline full will close most of the opportunities they do have, but won’t strike out a lot because they lack other opportunities. Salespeople who fill their pipeline but don’t disqualify are bad salespeople!

Weak salespeople, who consistently fill their pipeline, will strike out a lot, but since they are successful at the most difficult part of selling – scheduling meetings – effective sales training and coaching should have a positive impact on their win rates.  Weak salespeople who struggle to fill their pipeline should probably not be in a sales role.  Weak salespeople who fill their pipelines but don’t disqualify (referenced in the previous paragraph) should also benefit from sales training and coaching.

This article has focused on 3 of the 21 Sales Core Competencies and 3 of the 20 Sales Management Core Competencies:

The other 18 sales competencies carry additional influence as to whether a salesperson will succeed and where they might struggle.  See the data on all 21 Sales Core Competencies here, where you can do an industry comparison and see how your own sales team compares.

To this point we’ve taken a macro view of win rates and pipelines and we should discuss the micro view as well.  Some of the metrics that are meaningful to me, which help to explain wins and losses, include:

• Time in Stage
• Stage to Stage Conversion Rates
• Average days stalled, days stalled before a win, days stalled before a loss or archive

I love to identify correlations and when I can, causation, which we also use to build predictive sales scorecards. Since nobody closes 100% of their fully qualified and closable opportunities,  a properly constructed scorecard helps salespeople identify the truly winnable opportunities on which to devote their resources, as well as the opportunities that would be best to lose as quickly as possible.  Clients that use our predictive scorecards increase their win rates by as much as 8x!

Use a sales scorecard, fill the pipelines, lose fast, swing for the fences, coach and train, and greater, more consistent sales success will follow.