How can you account for survivor bias and improve your sales process?

The history of survival bias

The Second World War. American scientists from the Statistical Research Group at Columbia University are wondering how to strengthen the armoury of bomber aircraft to increase their chances of survival. But they want to avoid increasing the weight of these aircraft's armour.

To do this, they are studying incoming aircraft and analysing where the impacts are. Inevitably, they want to reinforce the armour of aircraft where there is the most impact. It makes sense.

Apparently…

Except that it doesn't. It's a bias. A statistician by the name of Abraham Wald points out that if these aircraft come back from combat with many bullet holes in their fuselage, this simply shows that they can withstand the impact of bullets in these areas. On the other hand, it is where there are no bullet holes that the armour needs to be reinforced. The areas circle in green.

Why is this? Because it's the planes that have been hit in these places that haven't returned. So that's where the vulnerabilities to be protected lie...

It used to be better!

This famous statistician, who gave birth to the discipline of what is now called 'operational research' - more details here - did not fall prey to one of the many human biases from which we suffer. Survivor bias. This bias means that we look at what remains after an event in order to draw conclusions. At the same time, we forget to take into account an important population: those who did not survive the event in question. Two classic examples of survivor bias are:

1- A person from a disadvantaged social background who manages to get into a prestigious university. You hear people say things like "with hard work, you can do anything, whatever your social background". It's true that hard work is important and generally leads to results. But this analysis based on an individual who has worked hard and overcome barriers is naturally wrong because it ignores the millions of people from disadvantaged backgrounds who, despite working hard, have not succeeded.

2- People "of a certain age" who talk about products failing nowadays and point to a household appliance in their home, bought 30 years ago and still working. "In our day, products were solid! Forgetting, of course, to take into account the millions of faulty products that passed through their hands over those 30 years and which, because they were poorly made, didn't survive...

How to take account of survivor bias in sales

This bias can also be observed in sales teams. When we try to improve a sales process, we naturally look for possible improvements in the customers we win. And try to replicate the approach you've put in place. It's only natural. But then we fall into the same trap that American scientists almost fell into. We look at the survivors.

So there are two possible approaches. In my opinion, one is more effective.

1- Find out what caused the deal to be lost. Was it a sales person who wasn't interested enough in the prospect and who too soon tried to sell his "product / tool / ML platform thingy", was it the product's missing features, was it the price that was too high, etc... This approach is possible but requires constant study of the deals. It's hard to ask this kind of question to prospects who were lost 6 months ago. So it's pretty heavy. It can be done, but it requires energy.

2- Look into the deals you've won, the survivors, but with a very specific prism. Ask these customers what almost scuppered the deal. Ask them what hesitations they had during the process that almost made them hesitate to sign the contract. And so, to use the parallel with aircraft again, look for the weakness in the armoury that almost meant that the aircraft didn't make it home. By doing this, we can put in place a continuous improvement approach, with periodic iterations.

Bonus: on the same subject, an HBR study interviewed a group of prospects and a group of sales people who had worked together but whose deal had fallen through. Each group was asked to list the reasons why the deal didn't go through.

You know, of course, the number 1 reason given by the sales team (... yes, the price, in the unlikely event that you hesitate). The price, on the other hand, was only in position 5 for the prospects who didn't go through.

The number one reason given by prospects was none other than "they don't understand us". So if you haven't completely given up on the idea that your sales people are more interested in understanding your prospects and less interesting with their presentations and demos, contact us to see if we can help you be it wit sales development programmes, sales leadership or to address issues in your sales recruitment processes.