Eight Killer Sales Analytics Every Sales Leader Should Know
Analyze This, the humorous film featuring Robert Di Nero and Billy Crystal, focused on psychiatric therapy for a troubled mob leader. At one time, sales was considered more art than science. A VP of Sales was just as likely to hire a shrink as they were a sales ops leader or sales effectiveness consultant. Today, the term “sales analytics” is one of the hottest executive team buzzwords. But as sales leaders wrestle with ways to analyze markets, products, and their salespeople, which sales analytics really matter? To find out, here is our latest research highlight: The Eight Killer Sales Analytics Every Sales Leader Should Know.
In the film, Billy Crystal had a challenging task before him. He had to get inside the head of a troubled mafia leader, Paul Vitti (Robert Di Nero) who was battling the Feds, competing gangsters, and his own panic attacks and virility lapses. Maybe a lot of VPs of Sales feel like Paul Vitti at times, chased and beat up by customers, competitors, superiors, and even their own reps. And while a good psychiatrist might help them get a grip, what they really need is a set of comprehensive analytics on their market, products, and sales force so they can plan and execute their next moves with confidence. Here are the eight “killer” sales analytics, in the order in which they should be conducted:
Number One: Sales Potential Estimation (SPE)
This analysis uses market data and current sales to estimate sales potential at the account level. This is the “headwaters” of sales strategy and planning. In addition to providing market sizing information, it serves as one of the primary inputs for segmentation and targeting for coverage decisions.
Number Two: Buyer Needs Analysis (BNA)
This evaluates customer preferences, requirements and cost to serve It often provides the second dimension or axis alongside SPE for defining and targeting customer segments. The explosion of data available on the internet is lifting data limitations that typically hamper the value and depth of this analysis. Customers with really high potential typically also have really high needs, some may not be profitable. Combining #1 and #2 allows you to determine which customers to focus on and which to avoid or drop.
Number Three: Sales Cost Analysis (SCA)
This evaluates the channel effectiveness, coverage ratios, management ratios, and overall spend on sales compensation, enablement and infrastructure, leading to targeted investment decisions for those limited sales budgets.
Number Four: Sales Process Analysis (SPA)
This examines time and productivity at the role and sales activity level. It provides direction on role definition, sales time inhibitors, and sales process improvement.
Number Five: Sales Force Sizing Analysis (SFSA)
Sizing analysis determines the optimal headcount by role for the Sales Force. Done right, it leverages all four of the previous analyses to determine an aggregate headcount based on the sales capacity required to meet plan.
Number Six: Sales Territory Analysis (STA)
Determining the “patch” for each seller should take in to account several factors including number of accounts, current revenue, sales potential, density, proximity and others. Mapping software tools can be used for geographic territories. This is typically a highly sensitive and tedious exercise fraught with internal selling and favoritism. But good analytics can drive the design of a more even playing field.
Number Seven: Pay for Performance Analysis (PPA)
This is the bread and butter of Sales Operations – analyzing quota attainment and earnings correlations to determine the health of the sales organization and to gain insight into root causes for gains and drains in productivity.
Number Eight: Sales Incentive Cost Analysis (SICA)
Last but not least, it’s always good to forecast with some accuracy what the incentive program will run you. Statistical modeling and scenario testing enables sales and finance to agree in advance on what they’ve committed to the organization.
Well there you have it – the eight “killer” sales analytics every Sales Leader should know. No matter how well you may know them, Alexander Group specializes in helping our clients not only learn them but leverage them effectively. Analyze that!
Learn more about Alexander Group’s Sales Analytics practice.