Cost of Bad Statistics

Mark Twain wrote, "There are three kinds of lies: lies, damned lies, and statistics."

This phrase is often taken to mean that statistics are another form of?lying. Not so. Aaron Fisher, a statistician with his doctorate from the Johns Hopkins Bloomberg School of Public Health Biostatistics department presented a rather thoughtful view into this quote. He suggested Twain is?warning?that statistics that aren’t sufficiently complex can be misleading. Many years later Jerry Muller outlined in, "The Tyranny of Metrics" the risks of measuring what appears easily measurable as it's rarely what's most important.?

There continues to be stated 'truths' that go unquestioned and/or untested but thrown around as if they're driving strategy. If it weren't costing organizations $ Millions, it might be funny.

Examples:

• 44% of salespeople give up after one follow-up (Hubspot).
• The average sales rep only makes 2 attempts to reach a prospect (Hubspot)
• The decision maker is ready for sales to engagement approximately 6 days after consuming the right level of content (IDG)
• If you follow-up with a web lead within 5 minutes, you're 9x more likely to convert them (Insidesales.com)
• Optimal number of call attempts is six; 95% of all converted leads are reached by the sixth call attempt (Inc.).

These represent five often repeated statistics, but there are hundreds of these being repeated in "strategy" meetings as fundamental truths. There are countless articles written each and every year without an underlying understanding of how the data was gathered, its relevance to each industry, ICP, skill level, dependencies, experience, etc. These are all statistical illusions that are driving organizational designs or a misunderstanding of what "good" looks like.

These statistics are garbage. They lack context. They're meant to get you to read the articles but lack statical relevance in your business operations. Hint: Find your baseline and improve daily. Pay attention to your own biases about what's true, and what's convenient, expeditious, and/or otherwise unfounded in your own data.

Let's dial up Mark Twain and his own statistics about his writings to make the point. Twain says that when he first looked back on his daily word output over the years, it seemed as if he was gradually losing his edge and slowing down. When he looked closer though, he realized that he hadn't adjusted for the amount of time he spent writing?per day. He had the wrong denominator.

Consider Twains findings, and statistics that are potentially being used to drive agendas, investments (spend), and even those that your own team might be leveraging internally to drive agendas. It would be one thing if these were no name publications, but these statistics are tragic and misleading at best.

But has it really cost us Millions of Dollars?

Unfortunately, "Yes". I'll present you with one example albeit there are dozens of initiatives in organizations today. Here's where those dollars are being spent/lost:

1.Creation of an entire role (era) of SDRs because based on a false assumption (AEs don't call leads) stacking costs without increasing revenue. Note: We're not talking about BDRs (outbound developing targets) but rather inbound leads driven organically or through paid programs.

2. Higher paid AEs are asked to conduct lower converting activities (outbound). A trial, demo request or even quote request comes in and a SDR handles this while the AE is calling cold contacts? Why would we place our highest paid resources on the lowest producing conversions?

3. Less experienced sellers are now handling leads unnecessarily when unit economics (historical conversion rates for specific leads), cost of the lead, and cost of time all suggest the AE should just handle the lead.

4. Unintended consequences of customer experience. Common sense would suggest that if I want to speak to someone in sales, get a quote, demo, etc.; introducing an intermediate step only serves to raise frustration levels. Asking the same questions (happens all the time) is a recipe for poor conversion rates.

5. Sales automation has been introduced which lacks personalization, typically misaligned with the tone and style of the brand. Lead routing is another practice that's typically instituted far too early before proper process/metrics have been established for conversion rates. This presents a problem when "experience" speaks and not data. The lead routing rules become a self-fulfilling prophecy as to what will/won't convert at optimum levels.

Graveyard of Silent Failures

These statistics that get thrown around are biasing the thinking of many GTM professionals. The unintended but predictable negative consequences are vast. It's important that we slow down to speed up and not allow these long-held statements/statistics go unchallenged. Stacked side by side they couldn't possibly create a more incoherent organization. Take these two:

• The decision maker is ready for sales to engagement approximately 6 days after consuming the right level of content (IDG)
• If you follow-up with a web lead within 5 minutes, you're 9x more likely to convert them (Insidesales.com)

I'm urging organizations to proceed with caution when these statistics are thrown around. There's no noise coming from the graveyard of silent failures because we only see what happened, not what didn't happen or was possible. If these statistics are shaping your organization or influencing decisions, I'd proceed with extreme caution.

About Me

Over the last 30 years, I've been a?#Revenue?Leader/Operator in pre/post IPO companies ranging $0 to $250M including 5 successful exits. I'm a firm believer that success comes to those stubborn few organizations that choose to ignore the temporary discomfort of setback for the long-term strategy of delivering value. I pride myself on the inglorious factors that have driven my career: an aching desire to overachieve in the face of adversity; the peculiar blessing of a tendency to downplay prior accomplishments; simple hard work; those proverbial 100,000 hours of practice. If you're seeking help in accelerating capital efficient growth - I'd love to hear from you.?www.moneyball365.com

?? Follow me if you find value in my articles valuable.

Email: [email protected] if you'd like to chat.

?? Make sure you check out other valuable resources here:?Resources