How to Strengthen Sales Planning with Data Intelligence
Today’s world is constantly growing more digital. As a result, organizations need data-driven insights to optimize their internal processes and maximize efficiency. Company’s sales planning is extremely essential because it essential acts as the blueprint for achieving corporate goals. The foundation of sales performance management (SPM) and key to business success rely heavily of efficient and effective sales planning.
However, without the use of data insights, companies are blindly planning, unable to spot performance gaps or potential roadblocks that may pop up down the road. Traditionally, manual processes, such as spreadsheets, have been the go-to planning tool, but they aren’t built for logic and can’t deliver valuable real-time insights.
Download our executive guide, "Optimizing Sales Territories for Strategic Advantage," to see how optimized territory planning can help companies maximize return on sales resources, shorten the planning process, and reduce travel inefficiencies.
These inabilities hold companies back with a reactive, rather than a proactive, approach in their decision-making and planning, ultimately causing achievement missteps. Companies can avoid these issues and gain a competitive advantage with a data-driven approach to sales planning. By leveraging intelligent insights and data, including artificial intelligence and machine learning technology (AI/ML), organizations can optimize planning processes across their entire SPM value chain, including:
- Sales territory design
- Quota allocation
- Capacity management
Optimizing Territory Design with Data Intelligence
If your sales territories are poorly designed, how can you set fair or achievable quotas for sales reps? You can’t expect to hit revenue targets with quotas reps are unable to achieve. Thus, poor, ineffective territory planning creates a domino effect, hindering the success of your sales organization.
In fact, research supports the impact of ineffective territory planning. In a recent study, the Sales Management Association reported that companies that suffered from ineffective territory design had 15 percent lower sales objective achievement than the average. Whereas organizations that were effective at territory design had over 14 percent higher sales objective achievement.
Optimized territory design enables companies to ensure they have the right sales coverage to adequately serve existing and prospective customers and balance workload with rep capacity. According to the Alexander Group, optimizing territory size and deployment can drive up to 20 percent revenue lift by:
- Ensuring coverage of high opportunity targets
- Increasing ‘hunting’ versus ‘farming’ time
- Improving focus on new products
Using Data to Allocate Quotas
Missing sales numbers is the obvious result of poor quota allocation. However, there are other negative impacts that can result from poor allocation. Even if it isn’t the case, when reps think that a quota is unfair or unachievable, it decreases their engagement, motivation, and overall company morale. As their compensation continues to drop, morale plummets as well.
In turn, this can cause higher levels of rep attrition. Higher attrition means higher costs. Replacing a sales rep can prove to be a costly endeavor (on average it costs $115k to replace a single sales rep). In addition to added hiring costs, companies lose valuable selling time and potential sales before they’re able to get a new rep on-boarded and performing at full potential.
Unhappy, unmotivated reps can be avoided with achievable and fair quotas. Using data in the development of sales quotas allows organizations to increase transparency and build trust with reps through quota allocation. In turn, this also helps improve customer experience–happier reps help create happier customers.
According to the Aberdeen Group, the average level of annual quota attainment is just 55% which is clearly indicative of a quota allotment issue. Companies should view quotas in conjunction with territory penetration and opportunity. This helps them increase the achievability of their quota allocation. Using data and analytics, organizations can set quotas against both potential opportunity and historic performance.
Download our executive guide "Optimizing Sales Territory Design: Sales Management Association 2018 Research Update" to discover the benefits of using data and automation to optimize your sales territory planning.
Finding a Balance Between Sales Resources and Potential
Both territory design and quota allocation impact your sales resource planning. It’s no surprise then, that if you can accurately assess territory potential based on data-driven intelligence, you can determine the size of the sales force needed to capture opportunities at full potential in each territory.
In addition, you can more easily assess if a territory is too large for a single rep to successfully handle. In that case, you may consider adding additional reps to better harvest the territory’s whitespace and green field potential. Having well-aligned territories increases your ability to determine the sales resources you need, as well as where those resources should be allocated.
How an Integrated Suite Provides a Holistic View
Because your planning functions are interdependent, each has an effect on the overall sales plan. With a cohesive view into your sales planning processes helps increase alignment and identify areas needing to be adjusted or improved.
With integrated sales planning functions, companies can improve decision-making with greater data visibility. Finance leaders can see quota allocation progress earlier, allowing them to refine forecasting as needed. Recent studies show that organizations using an integrated sales performance management suite are able to increase sales productivity by 12.5% and accelerate financial close times by up to 50%.
Gaining a Business Advantage with Digital Disruption
“By failing to prepare, you are preparing to fail” – Benjamin Franklin
Disruption is a buzzword that has gained traction in the past few years. However, business disruptions are considered positive when they result in innovative growth across industries. Digital disruption has arrived in the world of sales performance management. Without modernized, automated sales planning processes, companies are ill-prepared to harness the potential of data, and – worse – risk falling behind the pack in their industry.
If you aren’t using advanced tools for your sales planning and performance management processes, now is the time to start. With integrated data intelligence, companies’ sales plans are allowing them to drive higher productivity, ultimately increasing organizational alignment and focusing their efforts where they matter most.
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.