Predicting Future Sales Performance

 

MacIver’s Algorithm

 

The most accurate predictor
of Future Sales Performance,
and it is FREE, my gift to you.

 

It can be used to Recruit and Select, to Promote

or to Identify your Future Top Sales Performers.

I am prepared to state that this is more accurate
and has higher validity than any Psychometric ‘test’
or any Recruitment Agency.

 

 

This simple three-factor algorithm will substantially out perform any and all ‘Tests’,
and will do at least as well, but usually far better,
at predicting Future Sales Performance than any Expert.

a.) Average (%) of Annual (actual) Performance against target (last five years.)
                (Reduce the total by twenty per cent for each year less than five years)

b.) BEST Quarter’s (%) MINUS WORST Quarter’s (%) Sales Performance (last five years)

c.) Current Sales Velocity (%)   (Last quarter´s Performance against target)

EXAMPLE:

Average last 5 year Annual performance = 87% 

Best quarter 137% minus worst quarter 48% = 89% 

Current Sales Velocity = 115%

 

(A times B times C) 87% times 89% times 115% = 89%

   

Then, 89% is the PROBABILITY of this Candidate achieving Target in their first 12 months; redo figures to predict year two when year one actual figure is achieved.

 

Thanks to Jeff Michaels of Intended Results (@IntendedResults) for encouraging me to Blog this.

 

Update 04/2013:  I have received a number of direct comments, and I am always happy to receive them here as well.  Based on this feedback and in particular some of the questions I have to caveat the USE of the Algorithm, not the Algorithm, but its use!

Possible fundamental limitations of predictive model based on data fitting

1) History cannot always predict future: using relations derived from historical data to predict the future implicitly assumes there are certain steady-state conditions or constants in the complex system. This is almost always wrong when the system involves people.

2) The issue of unknown unknowns: in all data collection, the collector first defines the set of variables for which data is collected. However, no matter how extensive the collector considers his selection of the variables, there is always the possibility of new variables that have not been considered or even defined, yet critical to the outcome.

3) Self-defeat of the algorithm: after an algorithm becomes an accepted standard of measurement, it can be taken advantage of by people who understand the algorithm and have the incentive to fool or manipulate the outcome.

Wikipedia

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Using Psychometrics and Personality Tests to recruit Salespeople.

 

Consider the opposite what if you are wrong?

 

You are caught on the horns of a dilemma!

If Sales Psychometric Tests and Sales Personality Tests DO NOT work, what are the consequences?

At the first level; if random results are being given, and then some potential Top Performers are being rejected some potential Poor Performers are being accepted.
The personal consequences of rejection for one and acceptance of the other could be dire!

The consequences for the firm are the second cost of hiring, the costs of firing and the lost business.

In IT, Telecom and Finance sectors these figures based on a six month cycle total more than $500,000.

The cost of a Sales Personality Tests may be between $60 -$120, if a full process recruitment assessment was used it would cost over one thousand Dollars.

 

 

BUT, the $1,000 saving may cost you $500,000.

 

Further, it is only a matter of time before Legal Tribunals will make huge and punitive pay-outs to “Failed” or even “Passed” Candidates. The Test “users” would do well to ensure that the Legal Liability rest solely with the Test “provider”, the legal costs may well exceed the “value” of the test. This may well be why Test providers are using an “as is” clause to protect themselves and leave the user holding the liability.

 

What is in doubt?

 

First: let me introduce myself.

 

“My name is Brian and I have used Psychometric Instruments.”

“Welcome, Brian!”

Over the last 30 years at various times my Company BMAC Consultants have used MBTI, 16PF, DiSC, OPQ, and a variant called SPQ and lastly, but not least, KAI The Kirton Adaptor –Innovator Inventory.

My Partner is a certified user of KAI, which is used widely in Creative Thinking-Problem Solving workshops and University Courses.  To become “Certified” in KAI’s use she had to prequalify with an MSc in Psychology then undergo a “Pass-Fail” five day intensive training course led personally by the originator Dr Michael Kirton. Which enables the Certified Psychologist, a Member of the British Psychological Society, to both “administer and interpret” the results. 

This result is a single score on a single continuum from Adaptor to Innovator, it is non-judgemental and based on valuing difference. The output is a confidential counselling session to understand “your personal preferences” for Creative Thinking and Problem Solving.

 

WE Do NOT use any Psychometric or
Personality Traits in Sales Recruitment

Why then don’t Sales Psychometric Tests or
Sales Personality Tests predict future sales performance?

The use of the word “TEST” is inappropriate as they are, at their best, MEASURES.
In fact that is why they are professionally referred to as “Instruments or Indicators” because they only MEASURE.

The interpretation of these measures is considered a professional and highly skilled task, not “automated” or layperson.

The “test” part is in the “judgement” (often subjective) of the user NOT the candidate.

The answer lies in answering three Questions with a resounding YES.

A. Are there Sales Behaviours “associated” with, or predictive of, future Sales performance?

B. Can these Sales Behaviours be “Linked” to a Personality Trait or Characteristic CLEARLY?

C. DO Sales Personality Instruments actually “measure” the trait which is
believed to be an indication of the likely Sales Behaviour taking place in the future?

Starting with question

A.) Certain Behaviours have been identified as “associated” with sales success and Sales Failure.
e.g. Both Positive: Asking more questions and Negative: talking less features.

Neither is an actual predictor of Sales success or failure,
what we see is that some salespeople who ask more questions
and talk less about the Product features are MORE LIKELY to succeed.

What WE can do, and indeed have done, is further research to identify which SPECIFIC Question types succeed more than others or which Product “Talk” is more successful than Features. Indeed Rackham did this with SPIN(r) describing the Successful SPINFAB Behaviourally and deriving as evidence based Sales methodology. This gives us an evidence basis to the claim that certain “Sales Behaviours” have an element of predicting likely future Sales Success. Using those behaviours MAY lead to a performance improvement of 20-30%

This brings us to

B.) The Linking of a Personality “Trait” to a given successful Sales Behaviour. Will any “Trait” predict that a salesperson will ask more questions?  Perhaps, but will this trait predict that the Salesperson will ask the SPECIFIC type of question associated with Sales Success?  Not, likely!

Here is the SPI insurmountable difficulty…….
the linking of any “Trait” to evidence based sales specific behaviours.

Finally

C.)  For as long as Psychometric Instruments (and Indicators) have existed, the Question “Do they actually Measure, what they claim to measure anyway?” is asked. Perhaps they do, perhaps they don’t. It is very difficult for them to do so, there are many limitations preventing it. The ideal instrument would be extraordinary.

Current Practitioners and Marketers of Instruments, Tests and Questionnaires argue endlessly, they debate “Normative or Ipsative” methodologies or specific applications. I am reminded of “Alchemists” arguing over which stone will turn lead to gold, when all that is in the room are a variety of “stones and a lot of lead!”

In layperson’s terms a Ten Factor (traits) “test”, with a 10 point scale range (0-9) would appear to be an Instrument trying to measure on a 10x10 matrix, giving a neat “Score” out of 100.
A Percentage, easy to read, easy to understand if only that were true!!!!

A 10 Factor Instrument using a 10 Point Scale Instrument actual could measure 10¹⁰ (the tenth power of 10) or the instrument could measure 10 BILLION distinct individuals. It is sufficiently sensitive to measure every human being alive DIFFERNTLY. And, that is precisely what makes them so DIFFICULT to interpret!  If you had specified a single profile; you would be looking for one individual currently alive on the planet. This may be more expensive, and take more time than you thought. As those who search for the reincarnated Dali Lama would testify!

 

The likelihood of error
is highly probable.

 

In conclusion:  I ask you to consider the opposite, Personality “Testing” For Future Sales Performance may not work. The consequences are not just the loss of a little time and a little money. It is the loss of a great deal of time, a great deal of Money and is potentially damaging to both to the Candidate and the Company.

 

 

Consider the opposite, consider the consequences.

further reading on:

http://brianmaciver.blogspot.com/2010/10/personality-testing-in-recruitment.html