Wednesday, August 27, 2008

Moneyball and a Feel for the Deal

I’m not a baseball fan. My wife accurately describes a typical game as 10 minutes of action jam packed into three hours.

Yet, I have always been intrigued by the non-traditional approach of Oakland Athletics manager Billy Beane. Documented in the book “Moneyball” by Michael Lewis, Beane evaluates players based on their on base percentage, rather than batting average or runs batted in. The result: the Athletics have been a consistent playoff team even though their payroll ranks near the bottom of all Major League Baseball teams.

Does this atypical methodology for evaluating performance translate to the world of corporate sales? The folks at business software vendor NetSuite sure think so. In fact, last year they added Bill Beane to their board of directors.

GigaOm writer Carleen Hawn recently penned an excellent interview with NetSuite CEO Zach Nelson exploring how the company has changed its sales methodology and measurement criteria based on Beane’s “Moneyball” philosophy.

What Start-Ups Can Learn from Billy “Moneyball” Beane

I’m right in step with NetSuite on the importance of consistently measuring the effectiveness of tactical sales activities. The same holds true for public relations and social media programs, which can now be evaluated using benchmarks like search engine optimization (SEO) and impact on pay-per-click advertising.

However, I also believe statistics can only take you so far. One of the recommendations in Hawn’s article is to “trust your data even when your intuition suggests otherwise.” That is a good guideline, yet successful selling requires what I refer to as a feel for the deal.

Whether evaluating a product or professional service, a deciding factor for a prospect is the trust they have in the vendor and its representatives. An effective sales executive knows how to build relationships…when to push for more information…and (equally important) when to give a potential buyer some space.

Yes, it’s important to measure the tactics that support the sales process. Just never underestimate the power of intuition.

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