Identifying the right customers for the team to invest time with, and the ability to close deals efficiently, are both critical for any company's success.
These factors depend on a timely, two-way flow of information. Accurate and speedy exchanges of information can help improve sales results and reduce selling costs.
Business analytics can be one of the most valuable "members" of the sales team by providing timely intelligence in areas such as tactical effectiveness and customer profiles. With analytics, sales can scorecard, plan, and understand more about the client and anticipate opportunities for smarter decisions and improved business outcomes.
A sales force with the right information, at the right time, driven by the right incentives, is formidable. Unfortunately, many sales departments do not optimize time and speed of execution due to three barriers:
• Not setting sales targets and allocating effort based on maximizing overall contribution. Many companies only focus on short-term revenue, meaning sales does not gain a perspective on long-term customer contributions. As a result, it doesn't measure cross-sell and upsell revenue paths or the estimated lifetime value of a customer.
• No two-way clearinghouse for the right information at the right time. Companies need customer insight into what works, what doesn't, and what is most important. Without this information, sales reps are at a disadvantage in trying to build reliable customer relationships and loyalty.
• Not measuring the underlying drivers of sales effectiveness. Your goal is to increase sales productivity and adjust tactics when something doesn't work. If you don't set expectations and monitor the underlying drivers of sales effectiveness, you will likely suffer both higher selling costs and missed sales targets.
Companies can address these barriers using business analytics across five sales information "sweet spots"—all of which will help sales target the right customers as well as react, adjust, reduce costs, and close deals:
1. Sales results. What is driving sales performance?
2. Customer/product profitability. What is driving
3. Sales tactics. What is driving sales effectiveness?
4. Sales pipeline. What is driving the sales pipeline?
5. Sales plan variance. What is driving the sales plan?
A deep understanding of these sweet spots using business analytics helps the organization, sales managers, and sales team members better understand where sales is achieving its results, both in terms of overall performance and net contribution. It also helps reduce the need for "guess and check" creation of multiple reports.
Sales results can be effectively analyzed to determine how sales is using its time and to what effect. The insights gained can then be applied to revising the planning and forecasting process. Here's how it could work in a typical business:
First, the IT department and the sales business users collaborate on requirements. Next, IT creates a dashboard with a scorecard for the top sales exec detailing the five sweet spots. Finally, each regional manager gains access to their own territory through the dashboard—aligning their region to the company's top-line goals.
With a performance scorecard or dashboard connecting to the underlying business data, these managers can drill into the numbers to understand what is happening in their region in more detail. If the answer is not readily accessible by peeling back the layers of underlying data, managers can easily structure an ad-hoc query to answer a deeper question.
This process lets individual sales team members access detailed information about their particular accounts—made available on mobile devices, given the fact they're often on the road. Sales team members can also check into account status as they plan their customer visits.
The insights gleaned can be shared across sales and other departments, such as operations, marketing, and production. These areas can draw vital intelligence from sales pipeline and pipeline variance reports for use in developing new marketing campaigns, streamlining operations, or managing inventory.
For example, managers in production and operations can quickly adjust their plans up or down based on anticipated sales volumes to ensure they have the capacity available to deal with demand, while at the same time ensuring inventory levels are kept high enough (but not carry more than necessary).
Information flowing through sales affects every department in the company. High-demand forecasts can drive greater future production. Customer sentiment or behavior can affect future buying trends. By focusing business analytics on the five sweet spots described above, you will gain a sales MVP—one providing accurate and speedy information insights across the company for smarter business decisions, thus improving sales results and reducing selling costs.
Les Rechan is vice president of worldwide sales, services, and solutions for IBM Business Intelligence and Performance Management software.