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How to reinforce your quotes

1638530817404During World War II the allied forces wanted to reduce casualties of the air squadrons. The planes got bullet holes in three main areas as you can see in the picture above. To decrease casualties these areas were reinforced. This seemed logical enough.

The problem is, of course, that there’s a flaw in this reasoning.

This analysis suffers for what’s called Survivorship bais. If you analyze the planes that made it back to base you missed the ones that didn’t. So instead of reinforcing where you see the bullet holes you should do the opposite. Reinforce where there are no bullet holes.

So why am I writing this?

It’s because much of sales analysis nowadays suffers from the same flaw of reasoning. If you only analyze sales based what you actually sell it’s very likely, you’ll suffer from the Survivorship bais.

When we analyze sales, our customers use quotes instead of sales orders. We just use whatever was ordered as an important dimension of that analysis. That’s how we “reinforce” and improve future quotes. This is how we increase the hit-rate for our customers.

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