More likely than not, you’ve heard the following buzzwords: artificial intelligence and machine learning (AI/ML) and predictive analytics. While talk of AI/ML has yet to move into the sales performance management (SPM) space, there are tremendous opportunities for sales leaders to leverage data to improve sales performance.
In our recent webinar “How Big Data and AI/ML are Transforming the Enterprise Sales Organization,” Xactly Senior Director of Product Marketing discussed how the SPM space is shifting to become more data-driven, and the critical role data plays in optimizing enterprise sales organizations. These are ten key insights we learned from the webinar.
1. There is a paradigm shift occurring in the SPM space
Traditionally, SPM has been synonymous with incentive compensation management (ICM). Using manual forms of incentive compensation management, companies were left with static data that is more of a problem than a solution. Today’s sales organizations have integrated with automated, home-grown, and legacy systems to provide basic reporting; however, the data is more reactive than predictive.
The future of SPM is leaning towards data-driven intelligence with end-to-end SPM solutions. With predictive analytics, companies can use data as an asset and solution to drive the next level of sales behavior and goal achievement.
2. Companies using SPM solutions see 49 percent greater quota attainment than those not using an SPM (Aberdeen Group, 2017)
SPM solutions have been shown to help companies better manage their sales performance and incentive compensation. In fact, with optimized SPM solutions, companies have access to data that give organizations:
- useful analytics and insights into sales performance
- knowledge about employee and organizational performance
- the ability to drive the next level of sales behaviors
- increased credibility and trust with employees
3. There are three main opportunities driving the push for data-driven SPM
Data from AI/ML solutions gives companies valuable insight into their company and provides opportunities for the company to optimize processes and drive growth. In fact, when considering an SPM solution, companies should look for solutions that address:
- Complexity: There’s growing complexity with additional product lines, varying compensation structures, and growing sales teams; therefore, SPM solutions should be able to handle complexities and scale with growth.
- Collaboration: Collaboration is vital across multiple departments to ensure the right plans and performance metrics are in place. SPM tools should provide insights that allow for companies to focus on agility and using data analytics to quickly address problems and make changes to plans.
- Real-Time Data: Use of real-time data should do more than reflect current business conditions. Rather, real-time data should help provide valuable insights that help companies better predict sales achievement outcomes and performance. As organizations are looking to invest in the next generation of SPM solutions, they have to future-proof with solutions that can leverage AI/ML to drive outcomes.
4. Poor sales planning can cause companies to miss the equivalent of up to 10% annual sales as lost opportunities (Gartner)
To truly transform your sales planning, it’s important to think about the entire SPM value chain. Ultimately, the success of your sales plan starts with your territory planning. If a company suffers from poor territory planning, it can create a domino effect of poor performance.
Poor territory planning leads to incorrect quota setting and management of workforce. This leads to missed quotas, which means companies are not earning revenue and sales reps receive unfair, lower compensation payouts. Ultimately, this creates unhappy sales teams and increases rep attrition.
5. AI/ML technology is good to have, but it’s the data that really matters
AI/ML technology is a great tool, but it’s not new technology. Any company can have AI/ML technology, but the tools are essentially useless without the data. For AI/ML to truly be valuable, you need:
- The right data
- The right amount of data
- The rights to use the data
It’s important to remember that you shouldn’t be building a sales plan and watching it work. Ideally, you should be looking at data throughout the year and learning how you can implement new strategies to drive next-level behavior and sales objective achievement. Most importantly, when looking for the right SPM solution, your focus should be on understanding the data source. Ultimately, data is the key, while any technology is just the enabler.
6. Data can be utilized in three main ways
Data is an important tool for companies to optimize their sales planning, execution, and optimization. With the right data, AI/ML technology can help companies perform:
- Benchmarking with peers to drive desired behaviors: Companies typically design performance plans based on what they know. With data-driven SPM, you can benchmark plan designs against past plan performance and see how peers in your industry are designing plans and paying reps.
- Real-time data analysis to fix plans: It’s important to understand how plans are performing once they’re implemented. Real-time analysis assists with earlier detection of plan issues, allowing companies to increase agility by swiftly testing and implementing plan changes. Over time, companies are able to identify and fix problems faster, ultimately improving the company’s bottom line.
- Headcount, turnover, and tenure data: There are many factors that can affect the success of the different teams across your organization, and with the right data, it can be easier to uncover and resolve issues that are unique to individual teams.
7. Data-driven SPM solutions help maximize mergers and acquisitions
Mergers and acquisitions have many inherent challenges, especially when it comes to blending two disparate sales teams. It’s important to consider how reps from both teams will be managed when it comes to overlapping territories, differing compensation plans, similar or same target accounts, etc.
The goal is to blend quick and smoothly without disrupting too much of the sales process. With data from both sales teams, SPM solutions that use data as an asset can help blend teams more smoothly by assisting with territory and compensation planning, so that territories and compensation are fair and attainable.
8. Data-driven SPM solutions enable profitable growth
By optimizing compensation plans, reducing operations inefficiencies, and improving reporting capabilities with data-driven SPM, companies can maximize their profitable growth. More efficient processes help companies improve sales performance and profitability and meet revenue targets more easily. Organizations paying reps in at least the 75th percentile also see reduced employee churn.
9. Data-driven SPM solutions help mitigate financial risk
Accurate data is key for successful forecasting and accruals. AI/ML helps eliminate errors and reduce the time it takes to gather data needed for accurate forecasting. Increased efficiency and accuracy provides finance leaders with timely visibility into commission expenses and helps them manage costs more effectively to increase cash flow.
10. Using AI/ML to Predict Sales Rep Attrition with Xactly
The Xactly platform was built on automation, but in recent years we’ve worked on expanding our capabilities into true machine learning. With 13 years of anonymous, aggregated data from our customers, we’ve designed an end-to-end sales performance management solution to help companies use best practices in their sales planning, execution, and optimization.
Using data from 1,500+ customers, we’ve developed Insights for Sales, which can help organizations predict the likelihood of rep attrition. Looking at a variety of factors, Insights for Sales flags reps that are at-risk for leaving the company. This gives sales leaders and managers leading indicators to take preventive steps and make well-informed decisions for at-risk reps and retaining top performers.
This is just one of the many possible use cases and examples of using data with AI/ML to drive sales performance. When companies have access to the right data, they can drive additional insights for sales leaders to optimize overall sales performance on a continual basis.
Take the Next Step with AI/ML and Data
When it comes to AI/ML technology, the most important thing is the data and what you can learn from it. In part two of our webinar series, we’ll dive into the unique ways data-driven SPM can overcome the complexity, help build agile models, and use data to optimize plans and performance to produce impressive business outcomes, including:
- Increasing sales revenue and performance by up to 15%
- Lowering risk of turnover up to 50%
- Retaining top sales reps and boosting greater quota attainment by up to 5%
Click here to view both parts of How Big Data and AI/ML are Transforming Enterprise Sales Organizations.