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Beyond the Forecast: Selling More with Analytics, Part 1

A sales organization is careening toward the end of the quarter. Frontline managers are mashing together forecast spreadsheets their reps emailed to them, and this manic exercise in aggregation goes up the leadership chain all the way to the head of sales. 

Or perhaps the organization is using a sales customer relationship management (CRM) system and the sales manager is ensuring that her reps have updated and submitted their forecasts, unsure how many “sandbaggers” and “happy ears” there are within her team. In either scenario, we can be sure there’s always a hot pot of java brewing at the office throughout the quarter-close hustle.

Look Past the Forecast

Often, we see sales leaders who are missing a wealth of data available to them from within their organizations. In fact, according to a Sell Cycle Review Analysis by CSO Insights, 50% of deal closes are incorrectly forecast. Beyond that, many organizations limit their ability to drive increased revenue by emphasizing reports on sales objectives such as “forecasted pipeline” and “closed revenue,” especially when management by objectives (a focus on results in order to motivate individual contributors) doesn’t empower sales reps to sell more.

Industry thought leaders have corroborated this dysfunction. In his book Cracking the Sales Management Code, Jason Jordan argues that sales objectives “can be influenced, but only by managing their preceding activities.” This means that behaviors are more easily influenced than objectives by front-line sales managers. Essentially, saying things like “hit your number,” “build more pipeline,” and “increase wallet share with that customer” encourages sales reps to do better, but it doesn’t show them how to achieve those objectives.

Activities That Drive Objectives

So what are some of those “preceding activities,” and what does this have to do with reporting and analysis? Let’s take a look at the “build more pipeline” objective—that is, increase the number of sales opportunities in which there is budget, authority, need and/or timeline. Depending on the organization, certain activities contribute directly to this sales objective. Some examples of coaching conversations around these activities include “make 100 cold calls per week,” “send 200 prospecting emails per week,” and “focus activity on high-scoring leads that the marketing department found.”

Although a focus on coaching activities rather than objectives presents a great opportunity, it also offers sales leaders a challenge. Here’s a burning question: How does an organization determine which activities drive objectives?

According to a Gartner report on sales analytics, the practical insights are derived from the intersection between leading and lagging indicators, where leading indicators are the sales activities discussed earlier, and lagging indicators are objectives. In essence, department heads can garner insights into which activities consistently produce results.

Sales Transformation Driven by Analytics

Now that we know to focus on the sales activities that improve upon sales objectives, we must next determine how to identify key activities that drive these results. And the answer to that is simple: Use an agile, robust and trustworthy enterprise business intelligence (BI) environment. 

If that just made you spit out your coffee, I apologize on behalf of your keyboard. A BI environment with those traits is enviable to say the least, but it’s not unattainable. In Part 2, we’ll explore these traits in more detail, along with some best practices for adopting a modern sales analytics environment.

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