How Understanding Second Order Effects Can Skyrocket Your Sales Success

Discover the overlooked factors that could be the key to doubling your sales wins.

One of my clients looked at their win rates through a lens that most salespeople never consider and, in the process, garnered more wins. This lens identified two factors in deals. The first was whether they went to see the client in person. The second factor was whether the client came to visit them. When both of these factors were present, their win rate was 100 percent. If you knew something would increase your win rates and revenue, would you change your sales process to include it?

Winning Sales Strategies: Key Insights

Another client told me they win every deal when they have the right people in the room. They needed a senior leader and the technical subject matter expert to win the deal, regardless of any other stakeholder being in the room. Most sales organizations don’t do the work to capture this type of insight in their CRM, but now that artificial intelligence can mine the data, you can uncover these insights.

Analyzing Client Data for Profit Maximization

Yesterday, I used years of client data to determine what industries generated the most revenue and profit. This was not easy because of AI token limits. (Tokens represent the amount of text in your prompt and in AI’s response.) To do this work, you may have to break things into small batches. The more you use AI, the more you will notice that you need way more memory and tokens to use it effectively.

Meeting Frequency and Sales Outcomes

In one of my companies, we noticed that the number of meetings was a signal that determined whether we would win the deal. We believed more meetings would improve win rates, but the opposite was true—a lower number was better. The data was only from one sales team, so it is difficult to determine if it is correlation or causation. Either way, it is helpful. If I were to guess, the buyers have bought enough times that they are able to make a decision in very few meetings.

Understanding Second-Order Effects in Sales

One large technology company told me that after the pandemic, they were using their travel budget to acquire more BDRs. This company sells server farms. On the low end, you are looking at millions of dollars. When I asked about their competition, the leader said they were competing for a large deal in New York City. I asked the leader what he thought his chances of winning this deal would be if he didn’t send a salesperson to New York, and his competitors walked through the prospective client’s new facility. Nothing I said was enough to change his mind.

You can do what you want, but once you take a certain action, the second-order effects may appear. You can call these consequences. It is important that you consider the implications of how you sell. Not sending a salesperson for an in-person meeting sends a message. The technology leader may love not having to fly people across the country, but when his competitor shows up and spends time with the people making the decision, what do you think the decision-makers will think?

The second-order effects of not investing in improving sales effectiveness are that you may lose to a competitor that has been developing their sales team to win at higher rates over time. You are free to believe that your team is good enough and still find yourself losing competitive deals.

The second-order effects of your current sales methodology are that a competitor using a sales approach that creates greater value and a much better experience will outperform you. Many companies cling to outdated methodologies, even though they were designed for another time.

The second-order effects of the ridiculous idea of not believing that your relationships are a variable in whether you win or lose deals are significant. You may think this isn’t important, but if your competitor dominates the client’s time, causing you to lose deals you need, you will feel the impact.

No matter how you sell, your contacts measure your sales status, which we call being One-Up or One-Down. You can find more on this critical factor in Elite Sales Strategies: A Guide to Being One-Up, Creating Value, and Becoming Truly Consultative. If you don’t prove you know the client’s problem better than they do, your status will fall, making you One-Down. The same is true if you cannot lead the client and give them the certainty and confidence to make a decision to change. The second-order effect will punish you.

Here, we first consider the idea that you may be able to improve your understanding of your sales process, including factors most don’t consider. Then, look deeper at your own data to see what you can discover about how to change the way you sell.

Second, you should look at your current and past decisions and seek out the second-order effects that may cause you to fail to reach sales targets and goals. These are two sides of the same idea.

If you are a salesperson, look at your own data to find improvements. If you are a sales leader, you might sit down with a number of sales managers to explore your data to see what you can learn. When you are done with that, you can move on to address the second-order effects you may need to avoid by making a new decision.

Do good work, and I will see you back here tomorrow.