Accuracy. Precision. Very often the two words are used in an interchangeable way, but actually they have very different, and specific, meanings. Why is this important for your sales team and the way they target customers?
It is safe to say that all sales plans are built starting with a key assumption: let’s find the best prospects for our products/services. Best prospects are usually defined as “those clients that have a need, a compelling reason, a mean ($$) and an intention to buy now”. Even better if your company does business with them already.
Typically, as you go and develop the sales plan itself, you look at funnel data, installed base population of clients, and at a lot of market data to identify an addressable market. In a nutshell, you hope to predict the future by looking at the past – not a particularly easy thing to do.
What most people do not often do, however, is to make a fundamental operational decision: are we going in for accuracy or for precision?
I recently rummaged through some hard disk backups of mine, and I found a bunch of interesting materials that I would like to share with you.
Let’s look at the definitions first (source Wikipedia):
- Accuracy: it’s the degree of closeness to the actual value
- Precision: it’s the repeatability or reproducibility (often used as an indication of reliability)
Let’s use some visuals to better understand what those definitions really mean:
In other words, if your sales teams are ACCURATE, they will shoot for the best fitting prospects: the bullseye. They will quickly qualify out those clients not matching the established criteria, and possibly quite rapidly run out of potential buyers. This is not necessarily a bad thing to do, especially if you are selling to a niche market.
If your sales teams are PRECISE, on the other hand, they will probably identify a cluster of prospects that, although not 100% fitting the criteria, will buy your products again and again. Once that specific cluster is exhausted, the sales teams will move on and identify another, probably adjacent to the previous one. This apparent “slack” in the application of the criteria, sort of a proxy approach, might require a longer sales cycle, or even a lower amount of per-client revenues, but those effects will likely be compensated by the consistency and repeatability of the sale.
Now here’s the big question: as a sales manager, which of the two teams would you like to lead?
The obvious answer is that a mix of the two behaviors – accuracy and precision – would be the optimal solution.
I would argue, however, that it would not be the best choice. Personally, I would rather trade accuracy for precision. My point is that no matter how hard and diligent you are when building your sales campaign or plan, there is always the risk of being too restrictive with the definition of your attractiveness criteria. You try to be so specific that you might unwillingly shut out whole portions of your client base or addressable market even before you start selling. After all, how many bullseye are there in a target?
If you allow, instead, for less accuracy but encourage precision, you might discover new criteria you never thought of in the first place. Clients might actually scrape the money together to buy from you, for example, or they might like your services so much to be willing to revise their project’s priorities. In some cases, clients would WANT something and be waiting for somebody – you and your team – to actually sell them what they NEED, instead. The periphery of the target is also, in absolute terms, way much larger then the bullseye area, so a bigger chance to score points if you keep throwing your darts.
Ultimately, precision provides an opportunity for repeatability: not even the best dart players can consistently hit the bullseye, so if you are looking for solid revenue streams and regular deals flow, I believe this is where you have the better chances to get them.
There you go, think about accuracy and precision next time you build your sales plan or campaign. And don’t forget to make sure you have the right darts and players for playing the game (but that’s for another post…)!
