How One Company Uses Benchmarking Data to Drive Sales Planning
When it comes to sales planning, there are a lot of moving parts to consider. Identifying the resources you need and implementing them effectively can quickly turn into a guessing game. Sales leaders often rely on tribal knowledge or gut instinct to make big planning decisions—and their sales teams and quota attainment often suffer for it. In a recent webinar, Xactly VP Strategic Marketing, Erik Charles, sat down with the Big Switch Networks Sales Operations Manager, Gavin McChesney, to discuss how benchmarking data can turn sales planning from a game of darts into a data-driven, credible, and scientific process.
In the webinar, McChesney discusses three key tips that have improved his company’s sales performance, including:
- Start sales planning well in advance of your new fiscal year
- Use benchmarking to stay competitive in your industry
- Keep a close eye on sales rep behaviors to ensure on-track development
In this abridged transcript, we’ve highlighted several questions that were discussed in the webinar. To listen to the full audio, including extended details and specific Benchmarking data, click the link below.
Watch the webinar, "Put the Darts Away: The Importance of Benchmarking Data in Sales Planning," to discover the importance of current benchmarking data for effective compensation plan design.
Erik: Let’s talk about off the comp plan design here. Your fiscal year started, you’re in the New Year now?
Gavin: Yes, so planning it out started a long time ago.
Erik: How early you start designing the new year’s plans?
Gavin: Probably a year beforehand.
Erik: Okay, so you’re way ahead of most companies, that’s great. What are the biggest challenges and problems for kicking off that comp plan design process?
Gavin: I think it’s keeping the plan simple. There is often a propensity to over-engineer certain things. People come with different goals and we want to make sure everyone’s on the same page and we’re all really focused
Erik: And how long have you been using the Xactly benchmarking product?
Gavin: About three years.
Erik: Okay. And what did you use before that?
Gavin: A lot of word of mouth—and whatever limited industry websites I could find.
Erik: Now how many other industries do you like to look at and compare?
Gavin: Almost all of them, so having a data set that is consistently updated, that we can track and monitor, is really important.
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Erik: Switching gears a bit, there’s a popular concept that encourages moving back from an enterprise to a startup mentality—it’s almost this idea of wanting to be more nimble. So talk to me about your “startup enterprise” mentality.
Gavin: For us, it means we have a very lean operating model. Everyone is extremely ready to welcome new people to the company. We want to keep it that way.
Erik: Are you hiring from a startup or mature company perspective?
Gavin: Both. Yeah, they both have different values. We see from a startup perspective, we see reps that are very closely aligned with what is new and next in the market. They know the new players, they understand the challenges. We also hire from large industries because they have that depth of experience with channel partners beyond the product set.
Erik: Right. So how do you bridge the gap between experience and novice? I mean, you’re hiring some very experienced reps—and also hiring greener reps who need development plans.
Gavin: Yeah we are still walking through that. We start by a nurturing some understanding, and then as reps continue to get into the weeds and mature, then they move into different roles responsibilities.
Erik: Let’s talk a little bit about tenure—the experience a sales rep has at the company and how that’s impacting the team. Where do you see the value of tenure?
Gavin: Yeah, well if you have tenure at our company, you’re there because you perform. We create high alignment—so if you’re there for a long time you’re making more than someone who’s a little bit younger, you’ve earned it. When you look at other companies, tenure isn’t always indicative of good performance and that’s a shame. Again, we’re looking for people who are very tenacious and very resilient—they’re the ones who stick around.
Erik: What’s sort of development program do you have?
Gavin: Because we’re such a small, tightened group, if you want to ask a question and you need guidance, it’s always there for you. So new reps can lean in on that maturity and be able to pick things up by asking the right questions.
Erik: Do you run analytics then to see how long it takes for new reps to be a full quota-bearing rep—and then how many years does that actually take?
Gavin: Absolutely. We take special care because as we are expanding into new markets we need to ask: How is that market going to perform compared to other markets? So, if a rep comes and is 100 percent new in that new market, that’s very different from someone who’s coming into a warm market.
Erik: And that moves us into the idea of growth and an expanding headcount. I mean, how do you actually benchmark company and sales team maturity? Are you comparing yourself to companies with similar years in the marketplace or do you also compare yourself to startups?
Gavin: We really do look at everything and use that in determining where we should be at developmentally and how our team should be performing.
Erik: And how does that data impact who you put into management?
Gavin: That’s kind of an interesting conversation because you need to ask why the reps who are successful are being successful. Is it because they have a channel partner they have a great relationship with? Are they successful because they’re very focused and very aggressive? These things don’t always translate into management success—but they do give us a good indication of effective selling behaviors and how we can improve our performance management.
Erik: Interesting note on promoting reps to managers. From Xactly’s analysis, we found that reps who know how to sell a company’s entire portfolio of products make better managers than those that bring in the exact same amount of revenue off of fewer products.
Gavin: Yeah absolutely.
Erik: Earlier, you mentioned “checkpoints” you use to evaluate your own rep tenure. You’re looking at these when? At the end of the first year?
Gavin: I’d say from day one reps are under a microscope.
Erik: Okay, and do you do a cohort analysis?
Gavin: Yes, and we look at that every single quarter.
Download "The Impact of Tenure on the Retention of Top Performers," to see data pulled straight from the Xactly Insights application and discover how tenure affects performance and rep retention.
Erik: Often times we hear from people who just want to get off of a spreadsheet and fix incentive compensation management. What’s your advice for somebody who’s looking to go from manual to automation? And what else should they be adding to their compensation package and at what point?
Gavin: That’s kind of the psychological advantage that Xactly offers. Xactly will give you a night to sleep that you didn’t you have before. When you run commissions in spreadsheets, you’re asking for anxiety. You buy things because you want a better quality of life—and doing commissions with Xactly is going to give you that—a better quality of life, and a better night’s sleep.
To listen to full the webinar, including specific lessons learned regarding employee retention and competitor benchmarking, click here.
[View Recording] Put the Darts Away: The Importance of Benchmarking Data in Sales Planning
Join us September 20th for, Put the Darts Away: The Importance of Current Benchmarking Data in Sales Planning. The webinar will feature with Erik Charles, VP Strategic Marketing at Xactly, and Gavin McChesney, Sales Operations Manager at Big Switch Networks, as they discuss the importance of current benchmarking data for effective compensation plan design, as […]