We have all heard of the “Hot Hand Fallacy” which states that a person who has experienced success in a random event believes that he or she will have a greater degree of success in additional attempts at that event. There is no department in business in which the hot hand fallacy has a greater detrimental impact than in sales. Salespeople are naturally very proud creatures and in their line of work, they are more easily susceptible to the hot hand fallacy. You close one sale and immediately all the subsequent sales seem like they are a giant bullseye waiting for you to swoop in and close them.
Now I don’t mean any offense to salespeople, there are many extremely talented salespeople who I’m sure are capable of going out and closing the majority of their leads. But even then I would be willing bet that the hot hand fallacy leads to them incorrectly chasing several bad sales leads due to the success of other leads. The reason we, no matter how aware, of the hot hand fallacy are still susceptible to it because humans are emotional creatures and when a positive event happens to us, we tend to believe that the good times will just keep on coming.
To pile on top of that the fact that sales as we discussed in the previous blog, Sales Purgatory, sales people are very often isolated in their line of work. The best defense against the hot hand fallacy is a check and balance system and when you are isolated from the rest of your sales team, that is hard to find. What salespeople need is a check and balance to counter the hot hand fallacy, even if it’s been days or weeks since the salesperson has been in the office, or been able to file a report to get feedback from a manager or executive.
How do you check the hot hand fallacy? Data and information, the biggest reason humans are susceptible to the hot hand fallacy is that as we stated earlier in this post we are emotional beings. The great check for emotion? Facts. By focusing on facts, data, analytics we can talk the emotion out of it, we can stop assuming that just because the deal with Company A close that Company B will too.
Statistics cut through all the emotion and tell us based on trends, history, and current buyer-seller climate factors, how likely it is a deal will close, not based on the fact that Company B is similar to Company A. Sales, especially enterprise sales, are large, expensive and very complex relationships that have many factors that go into deciding if a deal will go through or not. By no fault of our own, they are so complex that the human mind is unable to process all of the information that goes into the evolution of the sale and therefore we need some analytical help.
I recently read an article on the CB Insights Blog titled, This is Why Companies Need An AI Strategy Today. And in the article, they discuss how Artificial Intelligence is crucial to the growth strategies of each and every company in today’s hyper-competitive market. As margins get tighter, and projections and forecasts become more important to businesses, AI is poised to become the stars of the business world.
If you and your company don’t have an AI strategy in place for your sales team yet then you need to check out www.proximate.io and sign up for exclusive access to our new platform today. Get your sales team and your company on the front foot and have your AI strategy in place in no time at all.
“Companies will succeed and fail based on their ability to translate data…into insights and actions and products and services.” – Michael Dell