Data Dilemma? SPM to the Rescue
May 05, 2008
By Leslie Stretch
Most sales organizations struggle with the inability to adjust sales planning on the fly. Driving profitable revenue growth demands almost daily evaluation of marketing strategy, sales plans and sales force performance. But most organizations find themselves with little or no trusted sales data on which to base strategic or tactical decisions. Sales Performance Management (SPM) software can be the answer to this dilemma.
The Struggle for Sales Data
Data challenges face sale organizations on many fronts. Many companies find themselves on the journey to drive revenue growth with a road map devoid of detail. Increasing profitable sales growth results from increasing total sales, managing sales related expenses and maximizing profit on each sale through price realization and selling the right product mix. Sales incentive compensation plans play a critical link in all three of these variables, and usually accounts for a significant part of sales division spend.
But where do sales organizations look for good data on everything from quotas to price realization to incentive compensation? Here are but a few of the data challenges most companies face:
• Quota Detail: Quotas are generally distributed on spreadsheets, leading to a lack of centralized consolidated data for reps, regions, and market segments. As such, quota data is very scattered and difficult to use. Quota information then needs to be combined with sales incentive information to give insight on compensation plan performance.
• Sales Production Detail: Consolidated data on producers, product and incentives gives insight into who is selling what, where is it sold, and how much incentive is being earned. Often, spreadsheets need to be built from information gathered from an array of sales, finance and product management systems.
• Product Mix Detail: Most companies have very sketchy information on product mix sold, especially broken down by sales rep. How compensation plans may affect product mix sold is also critical detail used to judge sales rep and compensation plan performance.
• Price Realization Detail: Few organizations have easy access to price realization data. Percent of list price achieved, and how that relates to incentives earned by sales reps is critical data in evaluation both pricing strategy and sales rep performance.
• Sale P&L Detail: To calculate the sales division's P&L, extensive data is needed on revenue and sale related expenses, including detailed incentive information. Most organizations struggle to integrate this array of revenue and expense data from other corporate systems.
These sales performance data challenges beg for trusted sales and compensation data that everyone can agree on.
SPM Software to the Rescue
SPM has long been valued for the cost-saving aspects it brings to sales incentive plan administration, but now leading sales organizations are seeing the critical role it plays in delivering the information that drives better sales performance and more revenue.
The heart of SPM software is state-of-the-art incentive compensation software that pays sales incentives accurately with lower costs of administration. Around that technology core are supplemental technologies for territory management, quota setting, dispute resolution and analytics. With such robust data all being deposited in the same data mart, companies finally have a wealth of critical sales in one place.
Even more key, is that this data is trusted, and therefore used. Unlike other sales related data (such as CRM) which is speculative in nature, SPM data reflects what you've paid the sales force …what could be more trusted than that?
But even great data needs a great analytical tool to transform that data into information, and ultimately knowledge that is usable by executives. The best SPM solutions include robust analytics that provide value to many audiences—including sales, finance, product management and compensation executives. Daily delivery of reports, metrics and dashboards puts strategic information in leaders’ hands when it is needed for decisions.
The Bottom Line
The challenges that face sales organizations are many, but maybe none are bigger than the lack of good sales data and information, delivered quickly. One global manufacturer put it this way, "The inability to quickly access insightful data prevents us from making mid-course corrections…by the time we have the data out and analyzed it is three months old." Time is money—and instant information drives immediate decisions, which drive improved sales performance.
Leslie Stretch is president and CEO for Callidus Software
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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