Commitment and consistency: Why do sales organizations forecast?

Let's kick things off with an unassuming quote:

“A foolish consistency is the hobgoblin of little minds.” - Ralph Waldo Emerson

We all strive for consistency and predictability, but at what cost? And when does it lead us into a wrong direction?

Say you approach a sales manager working in a large company and question him on why sales teams are required to forecast exact amounts of revenue for up to three months in advance? It’s a valid question to ask as salespeople are often required to internally commit getting a signature from a customer by a certain date, no matter the complexity of the deal.

Throw in the difficulty of “committing” to an exact deal size to be brought in, particularly when asked to be written down “on paper” at an early stage, and it can all sometimes feel borderline absurd. Why?

The answer you’ll most probably get from the manager will be somewhere along the lines of: “Our revenue forecasts are passed up to the leadership team so we can give appropriate guidance to our investors. As a a publicly traded company we have a lot of requirements we need to adhere to in terms of reporting, planning and decision-making…”

Does this mean that all reliable and consistent salespeople sought by companies are nowadays not just expected to bring in a ton of revenue, but need to rapidly start forecasting this revenue for up to three months in advance? Yes, and pigs can fly!

Nobody asks the weatherman to realistically forecast exact temperatures beyond the near future of 10-days, so why are salespeople committing their forecasts for over a quarter ahead?

Let’s say we accept this practice in larger and more established companies with a strong product portfolio and a track record, but today you’ll find the exact same practice followed by organizations of all sizes, including even the smallest and least established businesses or startups. Why all the craziness?

The psychological factor of consistency

As Cialdini writes in his book Influence, horse-race bettors are not alone in their willingness to believe in the correctness of a difficult choice once it is made. Indeed, we all fool ourselves from time to time to keep our thoughts and beliefs consistent with what we have already done or decided.

Once we realize the power of consistency is formidable in directing our own action and the actions of others, an important and practical question arises: How is that force engaged? What produces the click that activates the powerful consistency tape in our minds? Social psychologists think they know the answer, and it is commitment.

As Cialdini writes: “If I can get you to make a commitment (that is, to take a stand, to go on record), I will have set the stage for your automatic and ill-considered consistency with that earlier commitment.”

So once a stand is taken, there is a natural tendency to behave in ways that are stubbornly consistent with that stand.

Commitment strategies are often aimed at us by “compliance professionals” of nearly every sort. Each of the strategies is intended to get us to take some action or make some statement that will trap us into later compliance through consistency pressures, and this is what Cialdini talks about extensively in his book.

Additional background

According to research findings mentioned in the book, it is then that we need to be very careful about agreeing to trivial requests (Freedman and Fraser). What can feel like a tiny agreement can not only increase our compliance with very similar, much larger requests, but it can also make us more willing to perform a variety of larger favors that are only remotely connected to the little one we did earlier.

It’s this second, general kind of influence concealed within small commitments that should scare you. Signing up to something you are not sure about, say for example a petition, can be so powerful that it alters your self-image. For example, “I’m now an environmentalist…” And once person’s self-image is altered, all sorts of subtle advantages become available to someone who wants to exploit that new image.

So, according to Cialdini, people can use small commitments to manipulate your self-image, and this has wide-spanning applications in all aspects of your life. Citizens can be turned into “public servants”, prospects into “customers”, prisoners into “collaborators”, and so on. And once they’ve got your self-image where they want it, you should comply naturally with a whole range of requests that are consistent with this view of yourself.

According to a study mentioned in the book, people were asked to read and re-write a piece of text written by a person who, slightly sarcastically, admired a dictator. An interesting result of the study was that even if it may have been sarcastic, without any strong evidence to the contrary, people who read the text assumed that the writer really meant what he said. Without going deeper into results, when the readers were then asked to re-write the text themselves, the outcome, no matter how ridiculous it seems, had an effect in altering that person’s own perception on the topic.  

Spurring sales personnel to greater and greater accomplishments

Cialdini states that back in the day, Amway Corporation hit upon a way to spur their sales personnel to greater and greater accomplishments. Members of the staff were asked to set individual sales goals and commit themselves to them by personally recording them on paper.

Ever since, many companies have learned a beautifully simple trick that makes salespeople perform much better than what they possibly otherwise would. They merely have the salesperson explicitly provide some effort and commit to their sales target instead of just plain and simply giving them out and waiting for results.  

In simpler settings, this psychological principle holds true also in the form of asking customers to fill out order forms instead of a salesperson doing it for them. When a person has gone to commit something on paper, the heavy sub-conscious pressure of consistency is engaged.

As Cialdini states: “According to the sales-training program of a prominent encyclopedia company, that personal commitment alone has proved to be a very important psychological aid in preventing customers from backing out of their contracts”, continuing “like the Amway Corporation, then, these organizations have found that something special happens when people personally put their commitments on paper: They live up to what they have written down.”

Getting your customers to engage with you

A thing to keep in mind is that the effort the counterparty needs to show and provide is critical. To be effective, one should not make the commitment too easy and hands-off for the counterparty. If they don't show with actions that they are doing things, you can directly consider it as a bad signal.

For example, you can give small pieces of "good" and interesting types of work to prospective customers for this effect to be in full play. To gauge the commitment level of a prospect, salespeople can therefore ask before a sales meeting for some agenda points to focus on, or when conducting an extensive sales case, involve stakeholders in some clever and subtle ways early in the process.

What are the implications on internal communication?

As the saying goes: “Underpromise and overdeliver?”, right?

Cialdini writes: “It appears that commitments are most effective in changing a person’s self-image and future behavior when they are active, public, and effortful.”

For leaders, as well as salespeople then, there is a key aspect to meditate upon for making sure that this psychological principle is effective, a fact that is often executed less than desirably in practice:  

“As social scientists have determined, we accept inner responsibility for a behavior when we think we have chosen to perform it in the absence of strong outside pressures. If we are forced by outside pressure, or encouraged by a large reward, it may get us to perform a certain action, but it won’t get us to accept inner responsibility for the act.”

This means that if the manager is forcing his salesperson to forecast a certain amount while the salesperson is reluctant, the effect will be lost.

“Consequently, we won’t feel committed to it. Strong threats or huge rewards might motivate immediate compliance, but they are unlikely to produce long-term commitment.”

This is something we must keep in our minds.

Foolish consistency

Consistency is considered a hallmark of logic and intellectual strength by people among us, while lack of consistency, on the other hand, is what is often tied to intellectually scattered and weak people. Coming back to the quote Cialdini mentions in his book as said by Emerson:

“A foolish consistency is the hobgoblin of little minds.”

The keyword here is "foolish". Remembering this quote can be an effective defense against psychological weapons of influence, but perhaps also help us, as the Stoics would say, live a "smoother flowing life”.

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