Jonathan Farrington interviews Jeff Gold, principal at global sales and marketing consulting firm ZS and co-author of “The Power of Sales Analytics.”
JF: What can big data and analytics do for sales forces?
JG: Companies in the U.S. spend more than $900 billion every year on their sales forces, and executives want to get the most out of this enormous investment. The availability of new technologies (i.e., big data, cloud, social media, mobility) and the explosion of data from these sources enables salespeople at all levels to gain greater insight into their customers’ preferences. As a result, leveraging these new capabilities creates tremendous opportunity for companies to use advanced analytics to improve sales force strategy and tactics to dramatically improve the effectiveness of their sale forces.
JF: What can companies do to realize this opportunity?
JG: When it comes to sales analytics, the key is to recognize that just data and technology are not enough. In order to realize the full impact of these new capabilities, executives and analysts must ask the right questions, develop the right models and empower the sales force to improve fundamental business decisions and processes. For example, sales leaders may ask, “What cloud computing platform, mobile device or sales performance management system should we use?” This is an important question, however, even more important questions include, “What insights do salespeople need to increase the value they provide for their customers? How and when should these insights be delivered to maximize their effectiveness?”
JF: Which sales force decisions can analytics help?
JG: Analytics can enhance sales force decisions in many areas and at many levels. For instance, companies leverage analytics to help salespeople understand customer/prospect needs and potential, so they can target the right accounts and spend their time more effectively. Analytics can allow sales managers to have a higher impact as coaches and make more informed decisions about issues such as sales territory design, goal setting and performance management. Finally, analytics can enable sales leaders to make better decisions about issues such as sales strategy, sales force size and structure and sales talent recruitment.
JF: Can you give a specific example of how analytics add value?
JG: Decisions supporting sales incentive compensation often make a significant impact on the performance of a sales force. Analytics help improve these decisions in three ways to ensure that an incentive program aligns sales force activity with company goals. First, analytics provide support to ensure a smooth-running program. This includes the basics, such as tracking sales, generating accurate and timely payouts and providing the sales force with information for understanding performance and motivating goal achievement. Second, analytics allow companies to diagnose concerns, gain insight into opportunities and make course corrections as needed. Diagnosis questions may include, “Is the incentive plan fair? Are goals set at the appropriate level to motivate? Is the plan driving sales activity that’s aligned with strategy?” Third, analytics enable design or redesign of incentive plans. By using financial models and incorporating multiple sources of data, companies may evaluate alternative plans on criteria such as fairness, strategic alignment and fiscal responsibility.
JF: What are the most important sales analytics capabilities that companies need?
JG: To benefit from sales analytics, companies need the right people, processes and analytical technologies for addressing a range of needs. Some needs are quite strategic (e.g., sales strategy development, customer segmentation or sales force structure design) and require people with analysis/design expertise and a deep understanding of sales issues, processes that are project-oriented and applications that enable flexible and creative analysis. Other sales analytics needs are more operational (e.g., territory alignment optimization, performance evaluation, developing targeting plans or oversight of the sales force goal-setting process). Operational needs require people with process/detail expertise, a work style that is process-oriented and applications that efficiently and reliably deliver information. It’s a big challenge for companies to cost effectively develop and continuously improve this diverse range of capabilities, especially because the business and technology environment constantly changes.
TSW: How are companies meeting this challenge?
JG: An important first step is finding the right person to lead the sales analytics function – someone who respects both the strategic and the operational mindset, who can partner across the business, capitalize on advanced technology, who has the respect of top company leaders, and who can bring business and technology experts together both within the organization as well as with external partners. Many companies are building strategic networks that include both internal (company) and external (outsourced) resources to deliver sales analytics. External partners can provide functional and industry domain expertise, based on their experience working with many companies. Partners who can support analytics with deep domain expertise and a global operating model (on-site and offshore) offer additional efficiency and cost benefits.