Improving performance across the sales organization is highly challenging in our ever-changing, hyper-competitive marketplace. Sales executives and managers are expected to pursue and achieve shorter buying cycles—to move the customer through the funnel quicker. This focus on ‘velocity’ puts pressure on the sales team to seek different selling tactics to ‘win over the customer’ for the long-term—to feed the organization with predictable and consistent streams of revenue.
The sales function has always been something of a mystery on the organizational chart. Functional department managers, such as human resources or purchasing, do not have the desire to understand what goes on in sales, nor the interest to realize the importance of sales.
This resistance is all too common, as the attitude is most likely obtained from the classic stereotype of the car salesperson. Unfortunately, this distorted perception undermines the value that sales professionals bring to an organization, such as the rise in complexity in B2B markets and the guidance that customers seek to achieve value and solve problems.
This Nonsense is Changing
Organizations have begun to understand that they must change in order to remain competitive and profitable (e.g. business models, mind-sets, culture, values, vision, etc).
It is not so much a manufacturing issue, as it is marketing and sales. In recent years, manufacturing has controlled the focus and resources on lean and total quality initiatives.
As a result, the sales team is stranded with a mediocre budget and a lack of training opportunities. It’s no wonder that organizations can’t get over the month-to-month, ups and downs of revenues—rather than a steady incline from January to December.
Sales executives typically use descriptive analytics for designing and developing sales forecasts—how a business has performed in the past—and use this information to predict future sales. If lucky, the business might receive a 6-month forecast from a customer, but this too, is a ‘best guess’.
To counter this weakness, a better method to the sales forecasting activity is the predictive analytics technique, which supports the S&OP process with more accuracy and tells the organization what to expect to book this month or this quarter. This calculation takes into account the sales historical conversation rates and current pipeline opportunities, coupled with conversation probability measures.
Although descriptive and predictive analytics are important, the former being hindsight information, and the latter being foresight information, a ‘total optimized sales’ organization goes one-step further and applies prescriptive analytics.
Prescriptive Sales Analytics
Most companies do not engage in this level of analysis, due to a lack of training and education, but prescriptive analytics can help your business achieve operational excellence and profit maximization in the most competitive market environments.
Consider for a moment having the ability to visual see the Sales Pipeline and its opportunities based on risk factors and engagement levels to form a probability assessment. The data would show the sales manager and the sales team which opportunities are to be prioritized based on a statistically-derived, probability score of ‘winning the order’ and in what ‘timeframe’.
This information is then used to develop specific sales tactics that are customized and tailored to each opportunity. This ‘prescribe’ method of sales is far more accurate and precise and supports the sales team efforts in choosing ‘the right sales technique’ that will close the deal, rather than trying to make-the-sale from ad hoc information and intuition of sales members.