Early in my sales career I was introduced to the Law of Averages. It's been a key concept of direct sales for many decades. The Law of Averages basically teaches salespeople that if you want to double or triple your sales, you need to double or triple the cold calls and sales presentations you make. I found that if I made ten cold calls to interest people in home water treatment equipment, I generally got one appointment for a sales presentation. Three appointments usually gave me one sale.
So to get one sale, I needed to make about 30 cold calls. As I got better at prospecting, choosing prospects to call on (such as new home buyers), and increased my sales presentation skills, I improved those averages.
A vital and painful lesson I learned was that I would always get more no responses then yes responses. To increase my yes responses, I had to increase my no's. Of course, averages never play out in smooth and even increments. Some days I could get 15 or 20 no's in a row before hitting a yes. The difficult discipline to develop was not quitting at the end of the 14th no. Some of my toughest sales involved convincing myself to get excited about a long string of cold no's because it meant I was getting closer to a clump of warm yes responses.
Later, at The Achieve Group (my first consulting company) we developed a number of marketing approaches that eliminated the need for cold calls. But, thankfully, the Law of Averages was burned deep into my psyche. As I started studying innovation and trying to apply what I was learning to Achieve's product, service, and market development, the Law of Averages came back into play. It became a key part of the reason Achieve eventually discovered a few pathways to a strong leadership position in a few key training and consulting services and markets.
I first saw the Law of Averages applied to innovation in 1983 when Zenger-Miller and Achieve worked with Tom Peters to develop the Toward Excellence process based on the lessons of In Search of Excellence. It made so much sense. To double your innovation success rate, double your failure rate. Clearly, effective managers don't want to fail. The goal is not failure; it's success. But since innovation is so unpredictable, we have to "fail our way to success."
Those initially clumsy tries are the only way to learn what does and doesn't work. Based on his extensive research on innovation, James Brian Quinn found, "No one can predict whether a particular solution will work, how well it will work if successful, whether customers will accept it if it works, or how customers will use it once they have it. The first use of major innovations is often in unexpected markets, and market research is often wildly wrong. . . the unexpected is what always happens. . . (it's) predictable unpredictability."
If I was looking at a street full of 30 homes, I knew there was a sale to be made somewhere on that street. But unless I suddenly developed the psychic power to read minds, the only way I was going to find it was to talk to 29 people who didn't want to see me. I needed to use the Law of Averages to fail my way to success.
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