5 Things CFOs Should Know About Data and The Future of Sales
Every day we see more and more headlines about the future of work and the impact of digital technologies: from artificial intelligence, to the internet of things. While the world of sales remains very much about personal relationships, new technology is also set to shape roles in the years to come. CFOs should be looking ahead to the new era of sales – and specifically, the role that data can play.
When used correctly, data can be the lifeblood of the business – and the sales team. Gathering data allows you to glean key insights about your sales ecosystem, your competition and the people you’re selling to; then, most importantly, you can act on that insight accordingly. But while CFOs know that they should be using data, sometimes it’s hard to know where to start.
So how can data support the finance function and what should CFOs be doing right now?
- Data eliminates nasty surprises from sales commission budgets
Many CFOs assign a firm budget to their sales commission plan at the start of the year, and yet, the final number can still come as a surprise. This is because using a manual administrative tracking system is often inaccurate, and can’t provide a real-time view of what the total cost will be. In the worst cases, this can lead to a significant overspend – the difference between a healthy profit and scraping by.
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Using an automated sales commission platform like Xactly Incent™, you can get fully accurate, up-to-date forecasts on the total commission spend, based on what sales reps have earned to date. Bonus: CFOs can take action in time throughout the year, to adjust the plan as needed. Data adds much needed clarity to a process that is currently all-too mysterious.
- Data shows whether your sales commission is doing its job…
Sales commission is one of the most powerful tools that can not only engage the sales team, but ensure that they’re prioritizing the actions that will enable you to hit targets. Multiple man hours go into planning schemes, not to mention the large monetary investment from the company to fund them. However, most CFOs can only review commission schemes after the fact – to see if they’ve worked as intended. By that time, it’s too late to do anything to change them, other than plan for the next year…
With real time data, you can see how sales teams are responding to a scheme throughout the year and crucially make adjustments to help it work as intended. Rather than depending on the predictions of twelve months ago, real-time data empowers CFOs to ensure the investment that goes into incentive schemes is as effective as possible.
- Data highlights new prospects to target – but you have to act fast
Industries and regions around the world are changing faster than ever before; fast-growing disruptors dominate markets, and economic developments change business landscapes. Data insights are crucial in promptly identifying new regions, markets and prospects to target. Feeding those insights to the sales team quickly can be the difference between success, and missing the boat.
With an automated sales commission platform, you can make tweaks to a commission plan as needed. This can incentivize team members to target a particular region, industry or even prospect, in a way that will quickly impact their behavior. That way you can not only feed in the insights you’re gaining, but be sure your business is acting on them, fast.
- Data is a vital piece of the retention puzzle
Churn is one of the biggest issues that sales teams face. Losing your top talent to a rival can seriously diminish a business’ performance, as well as creating significant costs in recruitment. It’s crucial that businesses are offering competitive pay – and commission – to their sales teams, to keep them motivated. Obtaining data on other businesses in your industry and local area is crucial.
With Xactly Insights™, it’s possible to benchmark your commission scheme against others in your region and sector, to check that what you’re offering to your team positively differentiates your business from the competition, and attracts top talent. Data can help businesses protect their most valuable asset: their people.
- You’re only as good as the data you act on
A final insight to bear in mind is that you really are only as good as the data you use. Businesses that rely on vague impressions of how a commission scheme is working or how the sales team is performing are setting themselves up for failure. Having real-time, accurate data on your sales commission scheme and the performance of your team really does enable you to plan and act more effectively.
In conclusion, data is a critically important tool for the CFO to be using today. It provides insights not only on your own organization, but others in your field. Using an automated sales commission platform like Xactly enables you to gather truly accurate and meaningful data – and act on it in good time. By building it into your finance operations now, you can set yourself up for success in the future.
Managing Commissions Under the New Revenue Recognition Standard
The vast majority of businesses are unprepared for commission expense accounting, more commonly known as the costs of obtaining a contract.