New Mandate for Sales Analytics
Today’s guest blog post is written by Mark Smith, CEO & Chief Research Officer, Ventana Research.
I have been involved with sales analytics for over 20 years and they can deliver significant value. It can help sales organizations reach quotas, forecast more accurately, and make better decisions about activities and strategy but also provide insight on what are earned or potential commissions and incentives for sales operations, management, and account managers themselves. They can also help provide insight into the compensation practices across your salesforce.
In the past, and often still today, many sales organizations did not invest directly in analytics, instead using desktop spreadsheets, cutting data and charts from applications and reports and pasting it into presentations. In addition organizations have tried to stretch applications designed for other purposes, such as sales force automation (SFA) and customer relationship management (CRM), to provide reports on accounts and opportunities, but these systems address only some sales activities and lack complete information about customers.
Many sales initiatives have failed to live up to their potential because companies did not use the right analytics tools and approaches to plan and operate them. For example, measuring the wrong things, measuring the right things the wrong way, or using only partial data to measure will have negative (and often unintended) consequences. That’s because sales decisions almost always must be made in a constrained environment, in which virtually every important decision requires trade-offs (such as price against volume). Sales analytics also can support new approaches such as sales contests and gamification that motivate employees to perform better.
Analytics is also a key tool for devising, tracking, and revising measures and metrics for sales processes that enable managers to make better-informed decisions faster and more consistently. Sales operations managers and executives need advice on selecting the analytics most useful for them and choosing sales metrics and performance indicators. This applies to the various kinds of analytics that sales organizations need. For example, our research finds that analytics is a priority for sales compensation management, where it is the top technology trend in 84 percent of organizations, and for sales forecasting (in 79% of organizations).
At this level of complexity sales organizations cannot continue to make do with outmoded tools. While spreadsheets are comfortable and familiar, when used for collaborative enterprise tasks they fall short in many areas such as lacking control of calculations and introducing inconsistent or erroneous data. Our research in sales compensation management finds that those that use them universally for this purpose are not satisfied with their analytics tools more often (in more than two-thirds of organizations) than those that use more capable tools.
A new generation of technologies offers more powerful and flexible sales analytics. We are analyzing these advances and their impacts on sales organizations going forward, and are performing new benchmark research on the next generation of sales analytics. Our mission in this new research is to uncover the best practices that companies use in measuring the performance of sales-related activities, the challenges you face, and how you intend to improve them in the coming years.
Sales analytics is a key resource for sales organizations facing today’s unprecedented challenges. If you are responsible for sales activities or systems, and want to see where the present and the future lie, please consult our research on the next generation of sales analytics.
Participate, Learn, and Get Best Practices here.
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