Mark Smith's Analyst Perspectives

New Generation of Sales Analytics Can Optimize Revenue Potential

Posted by Mark Smith on Apr 27, 2017 11:22:59 AM

I have been following advances in sales analytics since the 1990s. Over the last five years, however, I have seen evolution, not innovation. In most cases the information that analytics provides is too complicated and not contextualized enough for sales people who are not analytics experts to understand, let alone take action on. As I pointed out in my 2017 research agenda on sales, analytics is essential for planning that improves the impacts of sales efforts and meets the goals of the organization.

Too often organizations depend on reports from their sales force automation and CRM tools that focus on the past and do not look to the future, or on charts that do not explain information or provide suggestions for improving results. Analytics has great potential to provide insights on sales processes, yet many sales organizations and operations teams are missing out on the improvements analytics can deliver. We conducted benchmark research in next generation of sales analytics to investigate the state of the industry and best practices that organizations can use to improve.

Effective analytics enables businesses to understand the data they’re collecting in greater volumes and more forms than ever before, and these new capabilities are especially relevant to sales organizations. When applied to sales data, analytics can help sales teams achieve quotas and forecast more consistently, as well as understand the impact of incentives and maximize the potential of territories, all of which help optimize sales performance. These benefits es­tablish the foundation for a business case to adopt analytics tools that generate information to guide actions and decision-making for sales organizations.

According to our benchmark research, three in fivevr_NG_Sales_Analytics_01_focus_of_sales_analytics.png (58%) organizations said  sales analytics is very important to the success of their sales efforts. They most often apply analytics to im­prove predictability in the sales pipeline, increase the accuracy of the sales fore­cast and assess sales deals to maximize win potential and minimize missed op­por­tunities. Organizations most often measure overall sales per­for­mance by assessing customer reve­nue (57%), reve­nue attainment (54%) and quota attainment (51%). Fewer companies mea­sure fore­cast accuracy (36%) or customer satis­faction (31%), though these also are essential to sales perfor­mance.

However, with so many technological advances to assess, selecting the right tools for analytics can be difficult. Moreover, people charged with that responsibility often don’t understand the best uses of sales analytics or the scope of various user requirements. Ventana Re­search under­took this bench­­­mark research to de­ter­mine the attitudes, re­quire­­ments and future plans of those who use sales analytics technologies and processes and to identify the best prac­tices of organizations that perform well in it. We set out to examine both the com­mon­­alities and the qual­ities spe­cific to major in­dus­try sec­tors and across sizes of or­gani­za­tions. We considered how organi­za­tions manage sales analytics, issues they en­coun­t­er in the process and how their use of it and re­lated technology are evolving.

It is clear that organizations take sales analytics seriously, but the research also shows that most do not execute it especially well. More than half (55%) of participants said they are not satisfied with the current process their sales organization uses to calculate analytics; only 30 percent reported that they are satisfied. Our Performance Index, which in this case assesses the readiness of sales organizations to use analytics, ranks the majority (59%) of organizations at the two lowest levels of our four-tiered performance hierarchy. Among the four business dimensions into which we segment performance, the analysis reveals that organizations most often need to improve in the two more technical dimensions, Information and Technology.

Elsewhere the research indicates that organizations’ vr_NG_Sales_Analytics_08_benefits_of_sales_analytics.pnguse of sales analytics capabilities enables them to achieve useful results. The benefit most often ranked first is the capacity to align the sales force to business strategy and goals (by 38%), followed by better managing and tracking the progress of product and sales initiatives (ranked first or second for 40%). In addition, organizations that have adopted dedicated sales analytics tools or sales applications said that using them has improved the outcomes of their sales activities and processes significantly (20%) or slightly (47%). We find higher percentages of significant improvement in large organizations as measured by the number of employees (41%) and companies in finance, insurance and real estate (58%).

Of course, the impact of sales analytics depends on people within the sales organization to use the information analytics renders to their advantage. This means analyzing not only the pipeline, quotas and territories but also the performance of people in the sales organization and ways to help them be more successful. Utilizing analytics means a team is selling to its potential, seizing the opportunity to optimize results by establishing key sales indicators that span the people and processes of sales organizations. This might seem obvious, but often sales analytics has been relegated to an analytic dashboard with a set of charts that look great but are not actionable until they are translated into prescriptive guidance.

For next steps we advise organizations to assess their current efforts and determine where to improve their sales analytics, keeping in mind that this is a continuous optimization journey that should never be static.

Regards,

Mark Smith

CEO and Chief Research Officer

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Topics: Big Data, Sales, cloud computing, Product Information Management, Sales Performance Management, analytics, Billing and Recurring Revenue, Digital Commerce, Sales and Operations Planning, Machine Learning and Cognitive Computing, Sales Enablement and Execution, Machine Learning Digital Technology, Collaboration for Business, Sales Planning and Analytics

Mark Smith

Written by Mark Smith

Mark is responsible for the overall direction of Ventana Research and drives the global research agenda covering both business and technology areas. He defined the blueprint for Information Management and Performance Management as the linking together of people, processes, information and technology across organizations to drive effective results. Mark is an expert in technology for business from Performance Management, Business Intelligence, Analytics to Information Management across finance, operations and IT. Mark has held CMO, product development and research roles at companies such as SAP, META Group, Oracle and IRI Software. He has experience across major industries including banking, consumer products, food and beverage, insurance, manufacturing, pharmaceutical and retail and consumer services.