The United States was founded on the Declaration of Independence and the inalienable pursuit of happiness. Yet, for many salespeople, crippled in the throes of a cutthroat competitive landscape and fronted with seemingly impossible quota targets, the affirmed right to pursue happiness becomes an insatiable hunt.
Nominated for a Best Actor Oscar in 2007, the Pursuit of Happyness, garnered rave reviews and impressible box office revenue stats. The implications of the movie, however, extend far beyond the cinematic arts. Like the Declaration of Independence, the movie underscores several core tenants that can serve as fundamental guiding principles for salespeople in their daily pursuits:
1. When selling proprietary technologies, aim for 10x
The Pursuit of Happyness recounts the story of protagonist Christopher Gardner (played by Will Smith). Gardner is a homeless salesperson and sells bone density scanners to medical facilities. Alas, conversion rates are second-rate. There’s no hiding the fact that the scanners offer only marginal improvements over current technologies, yet are significantly more expensive.
In selling bone density scanners, Gardner faces a reality all too common in the sales world. He is tasked to sell a new product that does not offer meaningful advantages over the status quo. In his book, Zero to One, Peter Thiel explains that proprietary technology must be at least 10x superior to substitutes in some meaningful dimension in order to motivate widespread adoption. If a company is selling a proprietary technology, leadership should ensure it adheres to the 10x rule before a sales team is hired and scaled. Had Gardner been tasked to sell a truly innovative product, he would have likely been privy to higher conversion rates, which would have resulted in a higher level of satisfaction and motivation for his job.
Companies shouldn’t despair when considering the “10x rule”. Producing a “10x” product may not be as onerous as one might think. According to Larry Page, achievement of a 10x product improvement can be easier than a 10% one.
2. Ensure your compensation aligns with market uncertainty
As the scenes of the movie unfold, audience members appreciate that Gardner has his work cut out for him. To meet even his most basic financial needs (including food and daycare for his son), Gardner must sell two density scanners per month. This is no small deed given the lowly conversion rates and, as a result, Gardner struggles to make ends meet.
Like many salespeople, Gardner’s career has been structured as a numbers game (rather than a performance game). Despite being an impressive salesperson (as evidenced by his future success as a pension fund manager), Gardner faces an inevitable fate in selling a second-string product. He is not rewarded for his performance. This reality is all too common in the sales realm. Less than half of business leaders are satisfied with their sales compensation plans (41% believe their compensation plans fail to motivate desirable selling behavior).
According to Harvard’s Rajiv Lal, the degree of uncertainty in a company’s sales cycle should inform its compensation system. More specifically, as sales cycle uncertainty increases, so too should the percentage of compensation based on fixed salary. The fact that the bone density scanner market is a niche one, coupled with the high price point of the devices, warrants a compensation plan largely driven by a fixed salary. Had his compensation been based both on commission and a fixed salary, Gardner would have been rewarded for performance, and it would have been less of a struggle to make ends meet.
3. Find ways to increase efficiency
Through a series of opportune circumstances, Gardner finds himself landing a new sales gig working as a pension fund manager. Due to his limited time (he is also a single father), Gardner adopts an array of strategies to improve efficiency. He, for example, refrains from hanging up the phone between calls and defies protocol by reaching out to high value customers in hopes of larger deal closes.
In the sales world, efficiency is paramount. Increasing the efficiency of sales processes will lead to greater return on investment and more time to devote to nurturing customers. However, keep in mind that nearly a decade has elapsed since the release of The Pursuit of Happyness. It has become more critical to leverage technology and sales tools to heighten efficiency. According to Salesforce, high-performing sales teams use nearly 3 times more sales technology than underperforming teams. The exact number of tools will differ by organization but TOPO has found that high-growth sales development teams have, on average, five applications in their technology stack.
4. Always build relationships
Gardner is a relationship builder. He always prioritizes his relationships over sales numbers. This is blatantly evident through his devotion to his son – his first customer. It also becomes increasingly apparent as the scenes of the movie unfold. In one scene, while riding in a taxi, he meets the manager for a pension fund company, Jay Twistle. After impressing Twistle by solving a Rubik’s cube, Gardner nurtures the relationship. In due course, when he later applies for an internship at the firm, he lands the job.
Gardner’s bias towards relationship building is a coveted skill among salespeople. A study spearheaded by CEB found that most B2B sales leaders who are involved in complex sales seek out individuals who are adept at building relationships. After all, only 2% of sales occur at the first meeting. And, as evidenced by Gardner’s career path, relationships are not only valuable in the short term, but can also reap rewards in terms of surfacing future career opportunities.
5. Practice relentless optimism
Despite his seemingly lowly predicament, Gardner practices unwavering optimism. With no physical place of residence and as the primary guardian for his son, Gardner never complains. Despite his financial turmoil, he is persistent and uses small moments of happiness as springboards of inspiration. In one scene, he explains, “You got a dream… You gotta protect it. People can’t do somethin’ themselves, they wanna tell you you can’t do it. If you want somethin’, go get it. Period.”
Peterson and Barrett (1987) found that, in the academic realm, optimism is predictive of performance, as measured by grades and drop out rates. Optimism can also lead to performance gains in the sales world, a world not all too different from academia – grades are replaced by quota numbers, final examinations are renamed “Stage 4” deals, and cold-calling is perspired not from professors but from reps. With an average turnover rate of 34% among SaaS sales reps, the sales profession is not for the faint of heart. The optimism that Gardner exudes is a highly revered sales trait, especially as the sales world becomes increasingly complex and competitive. In 2007, an average of 3.68 cold call attempts were necessary to reach a prospect, whereas today 8 attempts are required. Perpetual optimism can be a force multiplier in sales, offering reps the “umph” to keep closing deals.
At the end of the movie, Gardner reminisces on his journey as a sales man from rags to riches, “The future was uncertain, absolutely, and there were many hurdles, twists, and turns to come.” This describes the life of many salespeople. The life lessons scattered throughout the movie can serve as a guiding light. Indeed, the Pursuit of Happyness is not a work of fiction. It’s based on a true story. Today, the real Chris Gardner is a multi-millionaire who has achieved tremendous success as a stockbroker, author, and motivational speaker.