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How to Use Data for Strategic Sales Planning

Nov 24, 2020
5 min read
Organizations need data-driven insights to optimize their internal processes and maximize efficiency. Learn how to use data for strategic sales planning.

Well, it’s about that time of year again. That’s right, it’s planning season. And for sales organizations across the world, this is the time where they take the good, the bad, and the results of the  previous year’s sales plans and use that to inform their new plans and strategy for the upcoming year. 

That’s where having a strategic roadmap comes into play. Maybe you’re new to the concept, or maybe you’re a seasoned veteran, but let us break it down for you. 

Strategic sales planning is the act of using historical sales performance and third-party data to build sales capacity, quota, territory, and incentive plans. Using data as the key decision-making tool, sales planning teams can base decisions on facts and which can then help you forecast performance more accurately. As a result, companies using strategic sales planning often see higher performance, efficiency, and bottom-line growth.

The Need for Strategic Sales Planning

Today’s business world is constantly growing more competitive and digital. As a result, sales organizations need access to real-time data in order to implement strategic sales planning and stay competitive. The key is for organizations to use their sales performance data, along with third-party insights, top optimize processes, and build more strategic sales plans.

Unfortunately, many companies use data as a secondary planning tool and rely heavily on gut instincts to design plans. In fact, according to a recent Forrester report, only 34% of sales leaders believe that they are making decisions based on trusted data vs. gut-level instincts.

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. 

Intelligent and strategic sales planning helps companies use their sales performance data more effectively. Because the technology is automated, it helps organizations model plans and ultimately, choose the best strategy to reach goals. The foundation of successful sales organizations lies in a data-driven approach to planning. Once plans are in effect, continuous analysis allows leadership to course-correct in real-time and stay on track to reach organizational goals. 

Here’s how data helps you implement strategic sales planning from start to finish—including territory design, quota allocation, resource capacity planning, and forecasting.

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 more than 14 percent higher sales objective achievement.

Optimized territory design as a part of strategic sales planning enables companies to ensure they have the right 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

Want to learn more ways you can improve territory design with data? Download the "Guide to Fair and Productive Territories." 

Using Data to Allocate Quotas Correctly

Missing sales numbers is commonly the 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. And 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.

In 2018, the average quota attainment was 58%, 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 as a part of strategic sales planning, organizations can set quotas against both potential opportunities and historic performance.

Finding a Balance Between Sales Resources and Potential

Both territory design and quota allocation impact your sales resource planning. So 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 greenfield potential. You can also more effectively plan resources in the event of unexpected turnover and attrition. Having well-aligned territories as a part of your strategic sales plan increases your ability to determine the sales resources you need, as well as where those resources should be allocated.

Intelligent Pipeline Analytics and Sales Forecasting

Sales forecasting is the map of estimated sales performance, revenue, and expenses that guide a sales organization in their planning processes. Having an accurate sales forecast is crucial to driving revenue, growth, and profitability.

When implementing an AI-powered solution for your organization’s forecasting needs, you are able to leverage machine learning to forecast deals more accurately, identify and move resources to target new areas of opportunity, and make strategic changes to accelerate business performance. 

An accurate sales forecast allows you to spot potential issues early on while there's still time to avoid or mitigate them. With more confidence in data accuracy, companies can use their sales data to forecast accurately and strategically. When you can trust your numbers, you can trust your plan.

Using Strategic Sales Planning as a Competitive Advantage

Recent studies from Gartner 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%.

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 strategic 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.

If you’re looking for a fresh approach to 2021 sales planning, register for our upcoming webinar, “Mastering Xactly, Episode 2: Building Next Year’s Sales and Incentive Plans” to create efficient and relevant plans that will help you stay competitive, drive growth, and increase revenue.

  • Sales Planning
  • Territory Management