Breaking The Knowledge Illusion Of Salespeople

Do you know how a zipper work? And what’s about a cylinder lock? You are thinking to know the answer, aren’t you?

I suspect that you experienced the same illusion we all have experienced, that is we think to understand how things work even when we don’t.

It’s the same when you feel to be able to fix a leaky faucet and end up flooding the bathroom, or when you try to help your daughter with her math homework and end up stamped by quadratic equations. Too often our confidence that we know what’s going on is greater at the begininning of an episode than it is at the end.

Are such cases just random examples or there is something more systematic going on? Do people have a habit to overstimating their understanding of how things work? Is knowledge more superficial than it seems? If so, what is the impact for companies and their leaders?

This knowledge illusion has been studied since many years by many cognitivists. F. Keil and L. Rozenblit — cognitivists at Yale, developed a method for studying ignorance by simply asking people to give an explanation and showing how that explanation affected their rating of their own understanding. If you were one of the people that Keil and Rozenblit tested, you would be asked a series of questions like the following:

  1. On a scale from 1 to 7, how well do you understand how zippers work?

2. How does a zipper work? Describe in as much detail as you can all the steps involved in zipper’s operation

If you are like most of the participants to the study — that is you do not work in a zipper factory, you don’t really know how zippers work. So, when asked the third question

3. Now, again on a scale from 1 to 7, rate again your knowledge of how a zipper works

you show more humility by lowering your rating.

Actually, from the first question to the third, average self-rating dropped from roughly 3.9 to less than 3.0 (for a group of participants — undergraduate students, it dropped to 2.5).

I have applied the same kind of approach to find whether salespeople suffer the same kind of illusion. For instance, I have checked recently whether sales associates working in financial services that have just described a product (like an investment fund for a bank or a home policy for an insurance) to a potential customer have the illusion to know that the potential customer has understood what they said to him or her.

I tested such hypothesis with 3 simple questions, similar to the above ones. First, the sales associate was asked something like the following:

1. On a scale from 1 to 7, how well do you think the potential customer understood what you said to him/her to describe…?

Then, the potential customer was asked:

2. Can you write what the sales associate told you? Explain in as much detail as you can what the sales associate said to you to describe…

The sales associate was then showed what the potential customer wrote and finally was asked something like the following:

3. Again on a scale from 1 to 7, rate again how well the potential customer understood what you said to him/her to describe…

Are you curious about the result?

Average self-rating dropped from 5.2 to 2.4. In other industries, like retail and automotive, I found very similar results. Unbelievable, right?

This sort of experiment shows that sales associates live in an illusion: they think potential customers understand what they tell them. Actually potential customers do not understand.
So, how effective is presenting a product to a potential customer who is not understanding? Up to you the response.

Such “Knowledge Illusion” is both profound and overlooked by companies: frontline salespeople so rarely think about it and frontline sales managers — that is, branch managers, store managers, district or area managers and the like, do not act to break such illusion.

On the contrary, frontline sales managers act like such illusion doesn’t exist. To justify such strong statement let’s go through some data concerning how frontline sales managers distribute their time. In my experience I measured several times across different industries how frontline sales managers are distributing their time.

For instance, district or area managers across different industries normally spend 30 to 65 percent of their time on administrative work and meetings, and 15 to 40 percent on nonmanagerial tasks (traveling, conducting special projects, dealing directly with a complaining customer or doing sales by themselves). They actually spend only 15 to 40 percent of their time staying in the stores, close to frontline salespeople to “manage” them.

And even when sales managers say they are “managing” frontline salespeople, what they are doing is not to help them to…break the knowledge illusion, but actually they are auditing for compliance with standards or they are firefighting, that is solving immediate problems. In many companies district managers devote just 2 to 8 percent of their time to really develop frontline sales teams (see chart below).

In other words, a banking district manager for instance, may spend as little as 6–7 hours a month developing sales associates, and if you divide that time by all sales associates (or teams) under his responsibility you get almost nothing, zero. In retail such time is higher but still too low.

Even worse is that sales managers do not typically expect more, and very often they have no clue at all.

One district manager at a large bank said to me recently, “Developing a branch manager? A good branch manager already knows what to do — What should I develop him for?”.

Another store manager working for a large retailer told me, “There are just good stores and bad stores — it depends on the location, on the promotions…there’s very little we can do to change that”.

Last but not least, a store manager said to me — with low eyes: “My district manager told me, ‘We don’t pay you to think; we pay you to sell more”’.

Amen.

Changing how frontline sales managers usually work is not easy but it has to be done. Such managers are particularly important in B2C industries, with distributed networks of stores. Store managers, district or area managers and the like, usually direct as much as two-thirds of the workforce and what they do or do not do, directly affects the customer experience and thus the financial results. Yet most of the time these managers operate as cogs in a system, with limited flexibility in decision making and little or no room for creativity. In most cases such managers keep an eye on what’s happening in the stores, enforce new procedures, report sales results and quickly escalate issues or problems. In other words, frontline sales managers are meant to communicate decisions — not to make them, to ensure compliance with procedures — not to use judgment or discretion, and certainly not to develop new policies and to oversee the implementation of improvements, not to contribute ideas or even implement improvements — frontline people do that.

In a recent customer centric transformation program I run for a large retail bank we drastically changed how branch and district managers distribute their time and how they are evaluated, with a strong focus on fostering learning and intrinsic motivation of branch managers and sales associates.

For instance, district managers no longer had to complete long weekly sales reports, respond to corporate directives that arrived via email at unexpected times (even after 10.00 pm or on Saturday) and accommodate too-frequent visits by regional directors.

Reports produced by district managers capture fewer and different leading metrics of sales results, showing persistence and effort to learn new behaviors of different branch teams. In addition, all visits from regional directors were scheduled 4 weeks in advance and followed a predetermined agenda.

As a result, the time district managers spent on administration and meetings fell by more than 50 percent, so they could devote almost 35 percent of their time (against an initial 2 to 6 percent) to activities such as practicing role play sessions with branch managers on how to provide feedback to sales associates, practicing role play sessions with sales associates together with branch managers and discussing with them how to improve the new performance metrics providing practical challenges, even uncomfortable ones (for instance, focusing on new ways that should be applied by branch managers and sales associates to improve their ability to create higher level of attention and exploration in a prospect using closed questions or immediate follow-up questions with customers to gauge by themselves which emotions customers have felt).

Branch managers were also made aware of their negative mind-sets, focused only on performance outcomes (such as, “My job is to make sure that every sales associate does a certain number of calls per day to sell insurance products”). They learned how to counter these mind-sets and to adopt more positive ones showing enthusiasm in learning for learning’s sake, giving daily feedback to sales associates to have learned something new instead of praising to have won a new customer or having achieved the monthly quota of insurance products!

The results have been impressive: in the first region where the bank started to roll out the program, revenue per customer grew more than 15 percent, customer acquisition rate more than 20 percent and churn dropped almost to zero.

****

Leaders can break the knowledge illusion of their salespeople creating learning-obsessed organizations. In most companies mistakes are the worst thing you can make. In learning-obsessed organizations worry of failure doesn’t exist, people are constantly looking for failure as a way to learn something new. In these organizations the question leaders prefer to ask their people is: “When is the last time you did something for the first time?”.

What’s about yours?