According to a recent webinar from the Sales Management Association, some key areas where firms lack effectiveness around sales include:
- forecasts that help management anticipate results (including forecast accuracy)
- optimally designed territories
- tools that quantify future deployment or incentive changes
Comparing these results there are two clear areas for improvement:
- forecast that help management anticipate results
- optimally designed territories
These might be things your organisation is struggling with as well.
If you are struggling with forecasting there are many initiatives sales operations can work together with sales management to improve:
- documented sales methodology
- proper onboarding and training of sales personnel
- training of first line managers to properly ‘inspect what you expect’
- more leading indicators which will show in the forecast down the line (marketing activity, changes to win rate, etc)
- highlighting deals which do not fit the norm for further inspection to increase forecast accuracy
- ‘stuck’ at a certain stage beyond the average stage length
- deals that have not accurately profile decision makers
- communication with the prospect has slowed down or ceased
Whilst it is often the ‘day job’ of sales management to provide an accurate forecast – things like territory management are areas where sales operations can really add some value.
Some symptoms of poor territory management include:
- high turnover of new employees (feeling like territories are not equal 0pportunity to seasoned employees)
- unequal quota achievement performance
The hallmarks of good territory planning include:
This means up and down to ensure goals are not just achievable but that every rep has the ability to hit 150% of their quota (at least!) and would look something like this
- Quota is $1m and the average deal size is $100k then you need 10 deals, or 15 to make 150% of quota
- Win rate of qualified deals is 50%, you need 30 qualified deals
- Rate of qualification is 50% you will need 60 opportunities
- If you convert 10% of your leads then you will need 600 companies
- Does this territory contain at least 600 companies you think you can reach?
Working Together with Marketing
Targeting Account Marketing is certainly becoming the norm in organisations. At its simplest definition this is really a shift from ‘spray and pray’ marketing of the past to targeted efforts. To take the example above… if you were targeting your BEST customers for the most optimal deals
- Perhaps your average deal size was now $150k so you would need just 10 deals to make 150% of quota
- Let’s imagine the win rate stayed at 50% so that’s 20 qualified deals
- If you were pre-selecting accounts perhaps your rate of qualification would jump to 80% so you would need 25 opportunities
- If your lead efforts were targeted perhaps 50% would convert and you would need 50 companies that fit the buyer profile
- 50 is a pretty different figure to 600!
Broken Down Lead Plans to ‘Sell’ the Territory
Just as the examples above, its important to show reps the numbers they will have to hit to achieve their targets. Making this a part of the process when issuing comp plans is a great way to ensure they believe in their territory as well as their quota.
If you would like to have a discussion about how to start to improve any of these areas, contact [email protected]