4-Cs Series: Connecting to your Demand Signals in Real Time

In introductory college microeconomics classes students are exposed to the concept of price elasticity – that is, the predicted response of a buyer in terms of quantity demanded when a seller raises or lowers the price of a certain good or service.  In the real world, companies in competitive industries are continually trying to extend insights about elasticity and other behavior-response metrics across thousands of customers and products.  The problem with this is that real-world business problems bear very little resemblance to the theoretical examples contained in Microeconomics 101 textbooks.  First of all, customer behavior is very hard to pin down.  Numerous variables affect every translation.  How can we say with a high degree of confidence that a price change was the main cause of a change in demand?  Why not something else – perhaps an especially strong and persuasive effort by the salesperson to make the sale? Or something completely outside our control, like the weather that day?

a unique processing system

Modern business intelligence systems are rising to meet this challenge by encompassing more explanatory variables into their algorithms.  But even so there is still a problem.  These models are still confined to looking backwards, to past events, to formulate guidance about what to do in the present and future.  Sales & marketing decision makers need to complement their insights from historical data with an approach that can work in the constantly changing environment of their markets in real time.  That approach has to draw on the processing capabilities of a system uniquely suited to the ambiguities and constant flux of dynamic markets: the human brain. Read the rest of this entry »

Subscribe   |  

Quantitative Intuition: It’s Not Counterintuitive (Nor an Oxymoron)

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. Read the rest of this entry »

Subscribe   |