The Key to Improving Predictability is Curving the Sales Hockey Stick

​It’s no secret that the end of a sales quarter is a stressful time. The pressure is on to close deals and bring in revenue. But that tension is exponentially higher today than it was at the end of last year because of our current global and economic circumstances.

If you dive into annual sales attainment, data shows an interesting trend around end-of-quarter and end-of-year. Companies often experience sales performance spikes at this time; something called the Hockey Stick. 

The Hockey Stick occurs when performance drastically increases and a flurry of deals close at the end of the quarter or year. It is quite common. Experts at DXC Technologies and Salesforce, as well as 73% of Xactly webinar attendees, have all experienced it. The problem with this sales phenomenon is that it creates challenges for organizations to forecast and predict revenue accurately. And without the right solutions and strategies in place, those issues can be amplified in today’s fast-changing world.

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Aug 26, 2020

The Sales Hockey Stick: Why Sales Performance Spikes at the End of a Period

3 Solutions for the Hockey Stick

While challenging, there are solutions and actions you can take to reduce the effects of the Hockey Stick—starting with your sales incentive and go-to-market plans. Here are three solutions that experts at DXC Technology, Salesforce, and our team at Xactly have had success with.

1. Identify top-priority targets and prospects: Understanding your ideal customer is critical to go after the right accounts. This allows you to create a balance between big deals and run-rate business to help ensure you have a healthy sales pipeline.
2. Focus on go-to-market strategies before incentives: Diffuse and reduce risk by having roles on your team that focus on big enterprise deals and others that go after run-rate business. This keeps you from relying too heavily on your largest deals—those that if they pushed to the next quarter, could make or break the period.
3. Use targeted SPIFs: Introduce timely accelerators for the sales team to seal deals quicker or even push them to close earlier in the quarter, if possible. Having an intelligent sales forecasting solution can help with this by examining your internal data and modeling scenarios to have a more accurate assumption of what that could cost you in incentives.

Making Sales Predictability a Reality

You can reduce the impact of the Hockey Stick by adjusting your sales planning and go-to-market strategies. It’s also important to remember that these performance spikes affect more than just your sales team. The stress that comes as a result of these last-minute fire drills is felt across the organization and affects your legal, finance, compensation, and reporting teams. 

The key is maintaining a balanced sales ecosystem. This means your processes and strategies are aligned across every team in your company. Sales Performance Management (SPM) helps you do that by providing critical insights to ensure you consistently have the most strategic plan in place.

Manual sales planning and management only make addressing the Hockey Stick more difficult because your spreadsheets keep you in reaction mode. You need to be able to proactively adapt sales plans before performance is impacted. Disruption has become a constant in our global markets, and according to Forrester Research, enterprises most primed to succeed are those that can adjust their plans with agility.

As you move forward in a very dynamic environment, which I think will continue to be dynamic over time, the organizations that are going to succeed and thrive are going to be the ones that can pivot on a dime.

To learn more about why Sales Performance Management (SPM) and continuous planning are imperative for the survival of today’s sales organizations. Gain more insights and learn about the latest research in our recent webinar with Xactly Chief Sales Officer, Jamie Anderson, and Forrester Principal Analyst, Mary Shea.