Think of the best salesperson you know: if you’re fortunate, perhaps someone in your company or, less happily, in a competitor’s firm. What are the qualities that make this person excel at the job of sales? In a classic Harvard Business Review article “What Makes a Great Salesperson” (July-August 1964) David Mayer and Herbert Greenberg likened a star salesperson to a heat-seeking missile: “Sensing what customers are feeling, they [the sales stars] are able to change pace, double back on the track, and make whatever creative modifications might be necessary to home in on the target and close the sale.” Whereas most of us have intuitive abilities to a greater or lesser extent, excellent salespeople lever this intuition with strong empathy skills (sensing what the customer’s needs are) and the relentless personal drive necessary to cross the finish line. If they could, managers would bottle this elusive elixir of talents and have all their salespeople drink it, every morning of every day.
It’s hard enough for enterprises to locate those rare possessors of this sales magic and retain their services, but harder still to deal with the fact that in today’s choice-rich, multifaceted demand environments even those talents alone are not sufficient to achieve sales excellence. We live in a world, after all, where there are purportedly more SKUs (stock-keeping units) on the planet than there are species of living organisms (see for example Eric Beinhocker’s excellent book “The Origin of Wealth”). A sales representative working for a company with over 100,000 SKUs, which is the norm for large companies in fast-moving goods industries, has to deal with a dimension to the art of the deal that unfortunately has little to do with charm, wits or good grooming: he or she has to figure out on a daily basis which subset of five or six products, out of that universe of tens of thousands, to offer to customers at whatever combination of price points might stand the greatest probability of winning the business. The computational dimensions of that notion are staggering – quite simply, they are beyond the realm of the feasible when contemplated by the unaided human brain.
Enter technology and the computational powers of quantitative methods. That which overwhelms the human mind amounts to a few split microseconds of run time for robust data management platforms. Revenue optimization models can sift through billions of customer-product combinations to recommend pricing configurations with relatively high probabilities of success. Perhaps these quantitative models could replace those hard-to-find sales skills – after all, if these models can really crunch all that data and recommend prices with the highest likelihood of success, then anyone holding a BlackBerry can access the information and make the sale, right? Not so fast. The world may have changed a great deal from 1964, when Mayer and Greenberg produced their article, but intuition is still intuition, and it is no less a necessary ingredient for sales success today than in years past. For all that computers can achieve, intuition and empathy are simply not things they do.
But is it possible to teach intuition? At first blush that would seem to be a stretch. In the minds of many the concept of quantitative methods is intertwined with that of an opaque, algorithm-powered monolith that spits out Delphic recommendations based on historical data crunched through a process unknowable and unviewable by mere mortals – what is commonly (though not always accurately) referred to as a “black box.” The problem is that in dynamic environments like consumer goods demand markets, decision makers have to negotiate offers based on a kaleidoscope of real-time inputs that require intuitive judgment. For example, say that you are a distributor in the food services industry and you see a news item that a national wholesaler has opened a discount distribution center in your sales territory. How would a salesperson process and assign a value to this information? As human beings, we are uniquely able to compose propositions out of discrete units of information and then embed those propositions within other propositions and so on, creating a hierarchical tree of a limitless number of propositions.
For example, upon reading the headline “National Wholesaler Opens Discount Distribution Center” a sales rep might begin to formulate a succession of hierarchical propositions in rapid sequence:
- wholesaler opens discount distribution center
- wholesaler who is our competitor opens discount distribution center
- wholesaler who is our competitor opens discount distribution center right down the street from our biggest client
- wholesaler who is our competitor and offers everyday low prices opens discount distribution center right down the street from our biggest client
- wholesaler who is our competitor and offers everyday low prices opens discount distribution center right down the street from our biggest client who was a tough price negotiator in our last sale
Our empathetic, capable sales rep will immediately assign a value of high importance to this information and use it to gauge the tone, tenor and negotiating position of the upcoming sales call with this client. What if the sales rep could also “inform” the quantitative revenue optimization system about this development and have it factored into the ensuing price recommendations ahead of the sales call?
In fact that is possible in today’s environment. Market awareness models are able to take qualitative human insights, like our sales rep’s awareness of the real-time implications of the competitive threat, and translate them into quantitative factors the models can employ, in conjunction with all the other relevant variables, to produce improved decision support recommendations. Of course this is not a brainlessly simple exercise: we still face the challenge of translating the sales rep’s instinctual thought process into a language the machine will understand and recognize. Nonetheless, market awareness models are one of the leading areas of development in the application of quantitative methods to marketing and sales problems. It all comes back to that basic question posed by Mayer and Greenberg more than 40 years ago: what makes a great salesperson, and how can we best capture and deploy those skills throughout our organization?