The best sales teams are driven by data. Instead of trusting their hunches or guessing what the next move should be, these teams rely on data to make decisions.
According to McKinsey, 53 percent of organizations that believe they have high-performing sales teams say they use analytics effectively. This makes perfect sense: When your business plan is rooted in data, you’re more likely to succeed because less is left up to chance.
Despite this, many organizations still haven’t mastered sales analytics. In fact, 57 percent of companies say they don’t use advanced sales analytics effectively, according to McKinsey.
The problem is that sales data is spread across many areas and isn’t always updated. A company can’t get to the data quickly and making sense of it requires a lot of work and analysis. The first step in getting a handle on your sales data is to figure out which areas of sales can benefit the most from analytics.
So which areas of sales operations should your company measure? While different companies will almost certainly benefit from different metrics, most organizations, regardless of the industries they operate in, can benefit from tracking the following five areas:
1. Bookings trends vs. commission expenses
Working closely with the finance department, start tracking bookings trends and compare them against how much money you’re paying out in commissions. If you’ve entered a period of low bookings, but still incurring high commissions expenses, there may be a problem with your compensation plan.
On the flipside, if you are enjoying a period of exceptionally high bookings and your commission expenses are low, you may be underpaying your sales team, which could lead to disengagement or churn down the road.
2. Sales force allocation
Analytics can provide sales operations with insight into what’s really driving sales success, so they can better allocate resources. Using analytics, companies can match top sales reps to the most critical accounts. They also can find out the characteristics of their highest performing sales reps, which can shape hiring and training.
3. SPIF Analysis
It’s one thing to set money aside for a SPIF; it’s another to measure how those funds are spent, and by who, to determine whether your SPIF is working as designed.
By measuring SPIF performance, you can determine which managers are using it the most, how fund distributions are affecting bookings, and which members of your sales team are performing at the highest levels, among other things.
You can also figure out whether your SPIF fund is working to begin with. If managers are overspending SPIF without knowing that it’s working—or without driving the right behavior—something may need to change.
4. Sales ramp-up time
How long does it take your new reps to get up to speed? The faster they’re able to learn the ropes, the faster they’re able to get paid—and the sooner your organization closes more deals. By using analytics to see how fast your company can ramp up new reps based on your plan, you can figure out the best course forward.
Maybe you will discover that you’re not giving your new reps enough time to learn a product portfolio before sending them into the field. Or maybe you’ll find that training is taking way too long. In either case, with data on hand, you can make proper adjustments and enjoy better results.
5. Deeper geographical sales data
Everyone does geographic analysis of their sales data, but consider going deeper by looking beyond just country and territories into cities and states. Look at the results for different product bundles, pricing, and marketing to uncover differences in how they resonate in specific areas. Then you can adjust accordingly.
By investing in the right sales operations tools, your organization can easily keep track of all five of these metrics, and many more. With that information in hand, you can then take proactive steps to improve sales operations. As result, you’ll have happier sales reps, more satisfied customers, and a stronger bottom line.