For the record, there is nothing normal about your averages.
If that sounds contradictory to you, let’s explore one of the most watched performances in the world: the stock market.
Even with all of the crazy ups and downs in the stock market over the past 80 years, do you know what the returns have overall panned out as? Almost a perfect 10% return.
Now while some of you out there may have known that, I want to ask you all a more specific question: how many years over the past 80 has the market returned anywhere from 10% below to 10% above that average of 10% (or to be technical, let’s say 9% - 11%)?
The answer: 4. Yes, you heard right – F.O.U.R. – in 1921, 1948, 1993, and most recently in 2004.
Four times in 80 years. Meaning it was not 50% of the time that the "average" was seen. Nor was it 25% of the time that saw the "average." Nope, it was only 5% of the time that the average actually happened over a four score period. Therefore it can be said that the stock market "average," although solid, is FAR from "normal."
In fact, the most “normal” return of the stock market was a 20% - 29% return, which occurred 23 times over the 80 years. That takes into account of course the converse years such as 1931 at -42%, 1937 at -32%, and the one we'll never forget in 2008 at -37.2%. Still, the most “normal” return of the stock market appeared almost 30% of the complete duration whereas the most “average” return of the stock market appeared only 5% of that period.
So what the heck does this have to do with growing your business? As a reminder, eQ is not a bunch of stock advisors – if we were, we would have told you to buy Maryland’s own Medifast 11 years ago (it’s now up about 10,000%!). What we do is help companies grow in their own markets.
Over the past two years, eQ has been fortunate enough to work with a great client in the veterinary space which itself has thousands of clients all across the country. This company retained us to help them not only lead their sales effort but also redefine their sales process and help develop and deploy a scalable sales structure all for the purpose of creating their unique “sales experience.”
It was in analyzing this company’s top one thousand clients that we quickly learned their “average” was FAR from their “normal.”
Since our client provides a service that veterinary clinics use on an as-needed basis, we learned that the “average” clinic in the top thousand used their service about 15 times per month. But upon further digging, we soon realized that this “average” was not what we were seeing in actuality. What we found in this scenario was that clinics were either using our client 5 times a day, 2 times a day, or 1 time per week. Basically they had clinics ranging from soliciting their service 250+ times per month to those that only entered transactions a few times per month.
When you really drilled into the data, we actually had very few “average” clinics. Once we were privy to this information, it only made sense that instead of designing a process for the “average” clinics, we would design a process for the “normal” clinics – specifically one for each of the three types of normal clinics being the 5 times a day user, the 2 times a day user, and 1 time per week user. The result? Not only did this allow our client to focus the right resources in the right areas, it helped them to make their “average” much more “normal.”
It goes to say that no company out there, including yours, should ever settle for average by any means. It’s too far from normal.
Jeremy Steinberg is an Outsourced VP of Sales at entreQuest who has led companies across the country to increases in revenue by driving the performance of their sales teams to unprecedented levels of achievement.
(Information Sources:
“Online Data Robert Shiller.” www.yale.edu. Accessed on Monday 16 May 2011. http://www.econ.yale.edu/~shiller/data.htm.
“Compound Annual Growth Rate (Annualized Return).” www.moneychimp.com. Accessed on Monday 16 May 2011. http://www.moneychimp.com/features/market_cagr.htm.
“What Is the Average Return on US Stock Markets?” by Randolph Saint-Leger. www.eHow.com. Published on Friday 21 January 2011. http://www.ehow.com/info_7830454_average-return-stock-investments.html.)
