We recently co-hosted a webinar – “Best Practices of Data-Driven Forecasts” – with CSO Insights. Zorian Rotenberg, a VP at InsightSquared, hosted the webinar along with Jim Dickie, a Managing Partner with CSO Insights. The webinar saw a great turnout, with a lot of great questions asked about the best practices of producing accurate, data-driven sales forecasts. Here are some of the best questions asked by the audience, with Jim and Zorian’s answers. If you missed the webinar, watch it here.
What are your thoughts on reward systems tied to forecast accuracy? Would you tie compensation elements to this? If so, what would it look like?
Rewards should be tied to forecast accuracy at both the sales rep and sales manager role. There are two parts to compensation. One is pay for performance and the other is pay for behavior. When you think of pay for performance, you think of rewarding sales/sales managers with a base pay and/or a bonus structure for attaining quota/plan. With pay for behavior, you think of rewarding sales/sales managers for the behaviors they elicit in return for an increase in their base pay/bonus. Here’s how that would look like: First, you need to measure the accuracy of individual forecasts and team forecast (for the manager). Then you need to assign a percentage increase in base/bonus pay based on the accuracy of their forecast. 100% accurate means a 50% bonus, 50% means a 10% bonus and so on. To summarize, tracking forecast accuracy and tying it to base/bonus pay will get the results you need.
If you had different demand generation teams, what metrics would you study for each team?
Sales Prospecting (sales demand generation teams) should measure Activity Ratios such as: Dials: Connects, Dials: Opportunities, and Dials: Deals. Tracking the entire downstream cycle conversion is key and these Outbound Prospecting teams should never be measured on mere # of dials alone.
How can you tell the difference between a “sandbag rep” and a genuine, accurate top performer?
There are a number of ways. Here is a way to gauge – look at the rep’s sales funnel conversions. If the sales funnel is wide (no drop-offs from stage to stage) then this may be a sign of a sandbagger. Also if conversions from stage to stage and from top to bottom are higher than the team average than that’s also a sign of a sandbagger.
Can the best practices you outlined be applied to B2B services sales? If yes, how?
Absolutely, these apply to any sales. All sales are driven by metrics and the approach is analogous. Contact Zorian directly at email@example.com for the “how.”
If there’s one thing worse than losing a deal, it’s taking too long to lose the deal. Could CSO Insights consider surveying the relationship between lost deals/long deals? It would be useful to score internal data against industry norms.
That’s a great idea for a question! Sam Reese, the CEO at Miller Heiman, has always said, “It is great to win but if you have to lose, lose fast!” We will look to add this question to our next 2014 Sales Performance Optimization study.
Regarding sales team churn, it seems to me that keeping and reviewing the data for the departed salespeople can become a useful predictor for future endangered salespeople. Comment?
It’s definitely useful to have your company’s average metrics to compare against for your existing reps. However, if your sales process is improving continuously, then you ultimately don’t have to keep old reps’ data and you can just use the latest metrics from the past 6 months of sales.
What resources does InsightSquared for getting people to change behaviors around implementing their Salesforce plugin?
As a running coach, I often video tape runners so they can actually see their form and how they are performing. The video is objective, not subjective. Solutions like InsightSquared can give sales reps and their managers that objective view. Looking at the funnel, you see where reps are underperforming compared to their peers, or the bubble view that Zorian shared shows when reps are holding on to poor deals longer than they should. When reps see the behaviors for themselves, versus the manager telling them where they need to improve, that is when they become more willing to change.
What is the optimal number of sales reps per manager for a professional services company?
The best sales performance numbers in terms of win rates and reps making quota is 6-8 for professional services firms.
How do you create a more data-driven sales culture?
Lead by example by bringing metrics to every sales meeting and asking your reps to provide their own key metrics weekly (see the “6 Essential Metrics” link above).
How do you calculate the % conversions from stage to stage if you don’t have a product like InsightSquared?
This is hard to do but if you have a sales analyst then you can track conversions in your CRM and build out an Excel model that shows Opportunity progressions from stage to stage for the past 6 months with your real conversions. The challenge is that it needs to be updated constantly (daily) so the cost of having an analyst do that around the clock is very large, which is why it’s ultimately less expensive to buy an analytics product like InsightSquared, which automates the complex computations in real-time and with just a click of a mouse button.
For a free trial, do you need a Salesforce admin to configure and implement InsightSquared?
No, it’s really simple and you can get a Free Trial and be up and running next day without involving IT specialists or admins.