A False Positive is a term used in medicine. Imagine some sort of test that comes back with results saying you have a life threatening condition, but in reality you don’t. The results of the test were mistaken, giving a False Positive.
If your doctor doesn’t know the results are mistaken, that a False Positive has occurred, the doctor could prescribe treatments for a condition you don’t have. They can be quite painful and may create a whole series of problems that can be devastating.
In medicine, researchers and doctors are particularly concerned about False Positives. Often, the reason multiple tests are run is to minimize the potential for false positives.
In sales, we have a lot of False Positives as well. We interpret things in one way, but in reality they may be quite the opposite. False Positives cause us to take courses of action that may be completely wrong. False Positives cause us to “diagnose” the customer situation completely incorrectly, we do the wrong things. But instead of harming the patient, usually the result is they kill our deals–we lose.
False positives happen in all sorts of ways. We make assumptions, rather than asking the customer. We accept initial responses t. o our questions, failing to probe and really understand. We hear what we want to hear, or are consumed with wishful thinking. We work with the wrong people. Each creates a false positive, but cause us to do the wrong thing in developing and executing our sales strategies.
One of the areas I see the most False Positives in is the Funnel/Pipeline. We want to keep our pipelines full. Our managers insist on 3, 4 or more times coverage. A full funnel with the right coverage is an indicator that we have enough business to achieve our goals. But too often, our funnels are misleading, they are filled with False Positives, making us think we have enough to achieve our goals but, in reality, we are far short.
Deals improperly placed in the funnel are dangerous false positives. Several years ago, I was asked by an executive to help with his sales team. As we discussed the situation, I asked about the pipeline. His response was, “Our funnel looks very good. We have more than enough opportunities to meet our goals, but our sales people just can’t move them through the pipeline to closure. We need help in closing deals.”
Initially, the funnel looked very robust, but as I looked more deeply, I discovered all sorts of problems. There was virtually no flow through the funnel. Deals had been in the pipeline for years with little or no movement. Looking at the activities in the deals, customers hadn’t been contacted for months, there were no planned activities or next steps. We started cleaning the funnel–we removed 75% of the deals.
They were False Positives, they were leading management and sales people to do the wrong things. The remaining 25% of the deals in the funnel were good deals. Sales people had good strategies and were moving them through the pipeline effectively. The sales people didn’t have a closing problem, they had a prospecting problem. They didn’t have nearly the deals needed to make their quotas. There weren’t enough demand creation programs, leads, or new deals being qualified. The real problem–and solution was completely different from what everyone originally thought.
False Positives are dangerous in medicine and in sales. They set the wrong expectations, sometimes dangerous expectations. They cause us to take the wrong actions, often making things much worse, always causing us to waste time and resource. False Positives can cause us to miss problems. We may think things are going well, when there is an underlying disaster.
If we have not rigorously eliminated false positives, we are always doing the wrong thing and will always fail! Are you looking at everything you are doing to make sure you are not basing your strategies and actions on False Positives?
just “dead air.” It all depends on interpretation. Mostly, the adjective “false” can be attached to “positive” when we have the benefit of hindsight. “Their VP told us that we were ‘in the hunt’ just last week. I’m not sure why we didn’t make the final cut!”
Was that a ‘positive’ that proved false? I’d wager that the sales team didn’t interpret it that way at the time the VP made that comment. I intentionally didn’t label his statement ‘encouraging.’ Maybe a post-action review would uncover the truth that the sales team was never really in contention. Or, maybe the sales team really was ‘in the hunt’, but got blindsided by a cataclysmic event that nobody could anticipate.
Are salespeople prone to self-deception? Oh yeah! Guilty! Self-deception is so rampant, we’ve even coined a term for it, The Sunshine Pump. No surprise there, because as you point out, management often reinforces the practice by insisting on maintaining rigorous pipeline multipliers for quota. “Bob agreed to seeing a demo, so I’m forecasting the revenue.”
The best ways I know to reduce the confusion are to a) carefully analyze past sales engagements, and identify which conditions are common to those defined as ‘wins,’ and which conditions are common to those defined as ‘losses,’ b) when it comes to forecasting, provide financial rewards for realism, and not just for optimism, and c) above all, recognize that depending on past patterns to predict future behavior carries its own risks . . .