|Live demo :|
This Guide focuses on seven risks that if better managed, will reduce pressure within sales, supporting them be more consistent in achieving their sales quota plans: support reducing sales attrition and new salespeople onboarding costs.
We will discuss how dealing with these seven risks, Sales Performance Management (SPM) systems can better manage sales quota plans to support businesses achieve both short-term profit goals and longer-term value growth and sustained profits.
The world of sales and sales operations is transforming. Companies need to prepare themselves for the future with modern automation.
SPM systems are focusing on the application of Artificial Intelligence (AI) to support businesses achieve short-term profit goals, and longer-term value growth and sustained profits. This Guide also focuses on the risk of not having the right data supporting AI deliver accurate and valuable predictions.
AI promises to customize further and personalise the sales pipeline. The risk making this promise while continuing to rely on incomplete sales pipeline data is to amplify existing sales pipeline, sales management, and sales performance management challenges.
Providing AI predictive insights built upon incomplete data increases internal pressures to focus on short-term profit goals, at the expense of longer-term value growth and sustained profit goals.
SPM systems using incomplete data to manage sales and quota plan predictions, risk also agitating and increasing sales attrition and sales enablement costs.
This guide presents how using the Nazca Services Conversational Solution Sales Scorecard, and Sales Enablement Platform, SPM systems can better manage the following seven risks.
Guidance is provided on how to manage each risk better using the Conversational Solution Sales Scorecard and Sales Enablement Platform.
Sales Performance Management (SPM) is the practice of monitoring and guiding personnel to improve their ability to sell products or services.
Software programs are available to enhance the sales performance management process. These applications typically streamline various activities in the corporate performance management process and encourage behaviour that drives sales and sustained profits.
A key objective of the sales performance management process is to educate and motivate sales leaders and salespeople to set goals and satisfy customers.
SPM software typically includes components for goal setting and planning, feedback, skill development and performance review. SPM software also tracks information about such things as sales quotas, territories, incentive compensation, job evaluation and forecasting.
AI is becoming an increasingly important component of SPM systems. Consequently, sales performance management processes are becoming more data-driven. Feeding the correct data into AI and Machine Learning (ML) processes provide the foundation for businesses to achieve short-term profit goals, and longer-term value growth consistently and sustained profits.
These data insights also support the business, sales leaders and sales operations to unleash the potential and performance of their sales and supporting sales employees.
For a business to succeed in achieving short-term profits goals and building long-term value growth and sustained profits, it needs to measure and reward two metrics:
Sharing the business mindset and vision
A common mistake sales and sales operations leaders make when managing sales quota plans is to focus solely on sales performance to achieve short-term profit goals.
Business leaders rely on those salespeople who consistently achieve their sales quota plans. The challenge is whether they can trust these same high performers to share the business mindset and vision to deliver longer-term value growth and sustained profits. Sales behaviour is central to a business achieving its longer-term value growth and sustained profits.
Short-term sales performance and profit goals have very little to do with sharing the business mindset and vision. Consequently, short-term profit goals seldom influence and guide the sales behaviour required to achieve long-term value growth and sustained profits.
Few if any, would challenge the fact that profit must be the primary objective within all sales quota plans. However, to achieve longer-term value growth and sustained profits, it is not the only metric, sales quota plans should focus on measuring and rewarding.
What is measured will be managed
What is measured will be managed, consequently plans that focus solely on achieving immediate profit goals fail to influence the sales behaviour required to grow value and maintain sustainable profits.
Sales quota plans that ignore motivating and influencing the required sales behaviour to grow value and maintain sustainable profits, also fail to realise the full potential from their sales performance management systems. These system implementations often fail to develop future sales top performers and sales leaders.
It is one of the main reasons why many companies fail to unleash the potential and performance of their sales and supporting sales employees.
Sales enablement is often an afterthought
Sales enablement often becomes an afterthought in many businesses whose sales quota plans focus solely on short-term profit goals.
When salespeople struggle, sales enablement focuses on product enablement, not the behaviour and activities required to manage a successful sale to closure when forecast. We discuss this further in the sales blog – Why are our sales playbooks failing us?.
Internal systems, sales pipelines and sales enablement are inward facing
Internal systems, the sales pipeline and sales enablement are often not aligned to the buyers’ journey and sales process. We discuss this further in the sales blog – Do your sales playbooks focus on the buyers’ journey?
Consequently, under pressure, salespeople often revert to price discount strategies to achieve their short-term sales quota plan attainment.
Getting to the heart of the challenge
The following statistics highlight the complexities businesses face managing sales quota targets:
How can over 90% of companies be achieving their fiscal plans, when less than half of their sales team will not close forecasted deals?
One reason is that many sales quota plans are focused solely on short-term profit goals. Sales leaders are finding ways to achieve their quota targets that further drive short-term sales behaviour.
Short-term sales behaviour often leads to activities that cannibalise and price discount downstream sales pipeline opportunities. All this does is place an increasing pressure on sales leaders and their sales teams to achieve short-term profit goals.
Short-term sales behaviour also undermines a business’s ability to focus on sales activities on longer-term value growth and sustained profits. Continuous, intense pressure to achieve short-term profit goals will increase the sales attrition and churn rate.
Sales leaders and their teams need the time, the right sales enablement, and the headspace to develop and achieve their full potential.
Enabling a sales team to achieve their sales potential is not possible if they are continually focused and under pressure to achieve short-term profit goals. Sustained pressure also impacts team morale and business culture.
Only balancing short-term profit goals with longer-term value growth and sustained profits can a sales team’s full sales potential be achieved.
Selling is about moving people, not products
The situation is made worse by internal processes and reporting. Most business sales pipelines measure product moving through the sales pipe.
Selling is not all about moving products, that is called logistics. Selling is about the seller managing their behaviour, influencing and moving people to decide to work with them and ultimately invest in their proposed offer.
However, addressing this challenge is easier said than done for two reasons:
Sales leaders and sales operations often struggle with challenges related to incorrect sales quota planning and inaccurate sales forecasting triggered by either incorrect, poor, or limited data insights.
Further insights and debate
Further insights and debate related to this challenge are provided in the following guides and sales blogs:
The diagram below provides a simple yet effective explanation of why the sales pipeline lies at the heart of all SPM systems. It is the reason why AI will touch every part of the sales pipeline from planning and forecasting to staffing and short-term sales quota and pay plans.
Sales performance management systems and processes are becoming more data-driven, which in turn is feeding the application of AI. The risk businesses face effectively managing their sales pipelines and sales teams’ performance, is not collecting and feeding SPM processes with the complete data set required to deliver the full potential from AI-based predictions.
These risks can surface at three points within the sales organisation:
Poor and inconsistent sales forecasting place greater pressure and stress on the business. The same pressure and stress are placed on sales performance management processes, sales leaders and sales operations teams.
Poor and inconsistent sales forecasting is a major reason why business often must deal with more sales quota plan pivots and updates. Increasing sales attrition and sales enablement costs and overheads.
Each of the seven risks presented is the effect of one or more of the challenges highlighted in the section, Sales Performance Management challenges.
For each risk, we have presented how SPM systems can mitigate or reduce the risk using data provided by the Nazca Service Conversational Solution Sales Scorecard. Several Scorecard Editions are available starting with the Members Edition up to an Enterprise Edition that integrates with business systems including SPM and CRM systems.
Our Sales Enablement Platform provides online sales enablement integrating the Conversational Solution Sales Scorecard. Our approach to sales enablement removes the need to take sales teams out of the field to be trained. Also, it allows sales reps to work on their sales leads flowing through their sales pipeline, while being trained.
SPM Systems risk making sales reps an anonymous entity within a sales performance plan because there is no sales behaviour data to support an emotional connection between sales operations and sales performance.
How to better manage the risk sales reps become an anonymous entity
Provide sales reps and leaders with a sales prospecting tool that supports them better manage their sales pipeline to achieve their sales quota plans consistently.
The Conversational Solution Sales Scorecard coaches and guides sales reps to better manage the conversations they are having with each sale lead contact. The Scorecard provides a consistent, real-time data integration with the SPM and CRM systems for each salesperson. The data tracks over 30 data points for each sale lead flowing through a salesperson’s pipeline, from initial contact to closure or loss.
Data from the Conversational Solution Sales Scorecard supports SPM systems provide more accurate AI-based predictive insights for each sales rep, and their sales lead flowing through their sales pipeline.
The data is available to the SPM and CRM systems’ Artificial Intelligence (AI) and Machine Learning (ML) tools. The predictive, real-time data supports more accurate, real-time predictive sales and behaviour insights.
Providing this data supports sales leaders to be more proactive in managing deal reviews and supporting their sales reps with developing close plans and sales enablement challenges.
The remaining six risks focus on specific challenges related to incorrect sales quota planning and inaccurate sales forecasting triggered by either incorrect, poor, or limited source data insights.
Inaccurate and incomplete data can mislead AI and ML predictive analysis and reporting. The source data used to feed AI and ML processes is predominantly historical sales revenues and inward-looking data from sales pipelines.
Consequently, sales leaders and sales operations risk setting unrealistic expectations. They miss the signs and insights when and where to invest in sales enablement to support sales reps achieve their quota plans. There is a greater risk of making incorrect quota assumptions and setting unrealistic sales quota plans.
How to provide AI and ML processes with a more accurate, predictive data
The Conversational Solution Sales Scorecard data provided support SPM systems and AI processes with real-time data insights. These insights track what has occurred during the sales process interacting with sales leads leading up to a successful sale. Also, what should have occurred and did not leading up to a slipped or lost sales opportunity.
The Scorecard obtains this data set directly from sales reps while guiding and coaching them better manage every sale lead flowing through their sales pipeline.
Sales leaders and sales reps are better supported. The sales process become more customer-centric. Sales leaders and their teams better manage their sales deal reviews.
Because they are focused on the sales process data, sales leaders’ conversations with sales reps developing sales plans and managing deal reviews are less emotional. More accurate sales forecasting and value-based sales behaviour are encouraged and delivered.
This data set can be interrogated to provide more insights on why sales reps missed their quota attainment. Because the data is captured real-time for each sale lead flowing through the sales pipeline, SPM system AI and ML tools can provide more accurate insights and predictions whether a sales rep will achieve their quota plan or not.
Such insights become invaluable to sales reps, managing sales leads to achieve their quota attainments. These insights also support sales reps better manage sales leads that are drifting off course. The insights also support sales leaders to become more proactive and effective in managing their teams’ sales enablement plans and needs.
Feeding historical data into AI-based predictive reports, alerts and guidance assume what has occurred will occur again. Consequently, without a strong chief sales officer and sales leadership, effective deal reviews and coaching, and good market intelligence, quota plans do become rooted in expectations rather than reality.
For example, a global cybersecurity company had rapid growth in one fiscal year benefiting from the Wannacry virus threat and set their following year’s quota targets to achieve x% growth. They assumed, incorrectly, there would be another Wannacry similar compelling event upon which they based their quota targets assumptions.
Another Wannacry did not occur, and executive pressure followed that led to intense sales pressure and sales rep attrition that their competition benefited.
SPM and CRM systems risk becoming misaligned with the buyers’ journey and sales process. Majority of the business’s sales pipelines lack data to track the sales activities required to manage a value-based sale that is aligned to the buyers’ journey to forecast its closure accurately.
How to align SPM and CRM systems with the buyers’ journey and sales process
SPM and CRM systems will become better aligned with the buyers’ journey and sales process if using data related to conversations that have or have not occurred managing each sale lead flowing through the sales pipeline.
The Conversational Solution Sales Scorecard provides this data directly from the sales reps working in the field. It provides sales leaders and sales operations with an early warning system, whether quota attainment will be achieved or not.
Sales quota plans help maintain sales rep diligence using the Scorecard because it is incorporated to be part of the sales quota plans. Section, Risk No. 7: Not driving value growth and sustained profits, provides further explanation.
More accurate insights and predictive reporting give sales leaders and sales operations the time to act upon it. The data provides sales leaders with the insights required to coach and support their reports which are struggling to achieve or will miss their sales quota plan targets.
Without accurate, predictive data, SPM system workflows risk compounding misinformation, and caused by two factors:
As a result of inconsistent or the lack of this data, sales leadership and sales operations become more open to Group Think.
Group Think is the practice of thinking or making decisions as a group, resulting typically in unchallenged, poor-quality decision-making.
Providing data to inspect and challenge historical data and assumptions
Real-time data sourced directly from the sales team reduces SPM and AI dependence upon inward-facing sales pipeline data. The Conversational Solution Sales Scorecard provides conversational source data to the SPM directly from sales leads flowing through the sales pipeline.
This data represents real-time leading indicators allowing sales leaders and sales operations to challenge quota plan discussions, assumptions and conversations.
The data supports AI-based predictions, guiding and supporting sales leaders and sales operations to ask the right questions, at the right time.
Asking the right questions and having discussions that challenge the status quo and opinions helps guard against Group Think.
What gets measured gets managed and will drive sales behaviour. SPM systems risk driving the wrong sales behaviour if sales plans have not been well defined and executed. Decision making is too often based on historical sales performance and results rather than based on the sales process.
Only by focusing on the sales process and activities supporting sales leads achieve their priority outcome needs will a business consistently achieve its short-term profit goals, and longer-term business value growth and sustainable profits.
Tracking and measuring KPIs that drive value growth and sustained profits
Because the Scorecard data originates from the sales process and buyers’ journey, SPM systems can use this data to define sales quota plan KPIs that drives the behaviour required to achieve longer-term value growth and sustained profits.
The data is real-time and provides immediate, actionable leading indicators. It allows sales leaders to understand their sales reps’ challenges, also buyer struggles, to better coach and mentors them. Sales leaders will better support their sales reps to successfully deliver a more accurate sales forecast and value-based sale to closure.
Typically, a sales team consists of 10% top tier sales performers. For this group, It is important to understand what they are doing well and how their sales plan supports driving their successful sales behaviour.
The bulk, typically 70% of your sales reps make up the middle tier who are inconsistent sales performers. Sales leaders need to focus on supporting this group to achieve immediate quota targets and sustained revenue growth. The objective is to raise the average sales performance of this middle tier.
The remaining 20% represents the bottom tier of poor sales performers. Sales leaders need to focus on what to do with them and if necessary, place them onto a Performance Improvement Plan (PIP) that is supported by data using the Scorecard.
Account-based sales performance management workflows rely on historical sales pipeline data to create account quota plans. Having incomplete data risk making the wrong quota assumptions and setting unrealistic sales plan/quota expectations.
As outlined in Section Risk No. 2: Misleading AI and ML, historical sales pipeline data also risk misleading AI and ML predictive analysis and reporting.
Reinforcing SPM systems as the single source of truth on sales performance
Data from the Conversational Solution Sales Scorecard strengthens the SPM platform as the single source of truth for sales rep performance and predictive insights.
Given AI-based insights are based on sales lead conversational data, it creates a collaborative and fair sales culture aligned to corporate values. Ensures all those in sales and supporting sales share the business mindset and vision to deliver longer-term value growth and sustained profits.
Often, sales leaders and sales operations focus on short-term sales quota plans to deliver immediate revenue and or profit goals.
Having an absolute and total focus on short-term profit occurs when the SPM system lacks the data to consistently measure metrics and KPIs required to guide the right type of sales behaviour to focus on business value growth and sustainable profits.
Immediate profit goals can risk incentivising sales behaviour that conflicts with other supporting sales teams. The situation can become exasperated when these other supporting sales teams have different metrics and KPIs driving their own supporting sales behaviour.
Conflict forces a business to invest more of its resources and energy inward-facing to resolve conflict issues. One of the most effective approaches to avoid this occurring is building in the metrics and KPIs that reward balanced sales and supporting sales behaviour focused on the mindset and vision for the company.
Sales quota plans often become the cause for conflict between functions, especially when a business is under pressure when sales teams are not consistently achieving their sales quota attainment. These conflicts consume valuable management time and hold back the business, increasing its value growth and sustainable profits.
Implementing sales quota plans that drive the desired sales behaviour for success
The Scorecard’s real-time data is used to track and monitor sales quota plan KPIs that support and foster the required sales and supporting sales behaviour to deliver a high-value solution sale.
If a business can increase the average deal size without increasing headcount, it will drive greater long-term value growth and sustained profits.
There is only one way to achieve this outcome consistently. The business needs to ensure it has a clear profit purpose focus. That purpose must align with: