In past blogs we have explored the potential of Artificial Intelligence (AI) for sales organizations and how it can impact sales performance management, along with the challenges and investment required. But given that AI is a means to an end, do you really need it? Is it the most effective way to achieve sales results? Or are there better ways to get return on investment (ROI)?
As we noted in an earlier blog, the McKinsey Global Institute estimates that the value created by AI in sales and marketing is expected to be in the range of $1.4 to $2.6 trillion for businesses worldwide. Impressive, right? Yet McKinsey estimates that advanced analytics (“untrained” analytics) can unlock $3.3-6.0 trillion in value — nearly 3x as much as AI. Surprised?
Indeed, you can derive tremendous value from data-driven sales performance management, using proven technology like intelligent automation, predictive analytics, regression analysis, and other existing methods, without the learning curve and investment of AI.
In our webcast “Can AI Transform Sales Performance Management?” Lily Scanlon, Principal in Korn Ferry’s Sales Effectiveness Practice, suggested an approach to determine the best path to transforming your sales performance. Scanlon says the question to ask is: “what is my business problem?” Define the problem and your objectives, suggests Scanlon, then look at whether a data-driven approach can help, vs. actual AI. You may be able to get a quick win on a discreet problem at a fraction of the cost.
Data-driven approach is proving itself
In fact, with increasing frequency, sales organizations are leveraging a data-driven approach which can include, but does not require, AI. According to the Salesforce State of Sales report, it is clear that data is transforming sales performance. Some indicators found in the survey include:
- Top sales teams are 1.5x more likely to base their forecasts on data (vs. gut feeling).
- Underperforming sales teams are 1.7x more likely to forecast based on gut feeling.
- The top two factors for converting prospects are a mix of human skill and data-driven insights.
- A data-driven strategy leads to a focus on the value, not volume, of leads.
Turning sales strategy into performance
Data is making sales teams more effective, but exactly how does a data-driven approach makes a difference? How does it help to turn strategy into performance? Advanced analytics can help in both prescriptive and predictive ways.
From a prescriptive point of view, advanced analytics can analyze data and decide the best path to meet goals. For example, they can help you optimize territory allocation, provide guidance for sales reps, and enable lead scoring and opportunity ranking.
Here’s an example. Performance comes from getting reps to execute strategy: selling the right products to the right customers at the right times. But how do you know the right product, or customer, or channel, or selling window? Data can help you with that, by looking at historical data and detecting patterns and correlations that might not be obvious to the naked eye. Maybe a certain customer always buys a certain product in a certain region at a certain time of year. If you know that, you can provide prescriptive guidance to reps as to how to achieve their number and thereby deliver on the strategy. Another way to look at it is, data helps sales reps to make rational rather than emotional decisions.
Going a step further, advanced analytics can use predictive capabilities to set quotas, inform more accurate forecasts, predict customer behavior, optimize pricing, and identify opportunities for upselling and cross-selling.
How to get results now
So, the good news is: as big as AI is, you don’t need AI to unlock value in your sales organization and the performance of your sales team. The data, infrastructure, expertise, and technology already exist to take advantage of predictive and prescriptive analytics and super-charge your sales results.
The key is to have an enterprise grade Sales Performance Management (SPM) platform, meaning one that can scale to handle massive data volumes, with the ability to consume many disparate data sources and bring them into one platform for analysis. This requires not only cost-effective high-end scalability but another often overlooked requirement around totally flexible data consumption: to have data driven SPM, the system needs the ability to consume from multiple data sources, such as:
- Sales transactions from POS
- People data from HRIS
- Leads and opportunities from CRM
- Training course results from LMS
- Campaign info from marketing automation systems
- Customer stats
How does beqom support advanced analytics and AI?
Advanced analytics are productized in beqom, giving you the ability to make sense out of the available data. With beqom you can pull data from different sources and run simulations on a compensation model to see how it plays out across the sales force in terms of distribution, meeting targets, and staying within budget.
beqom gives sales management and sales operations insight into your sales model and projects the ROI of different compensation plans and strategies. This is advanced analytics and data visualization in action. And, if you really do want to invest in the power of AI, you can pull in programs like Microsoft Azure (beqom’s cloud platform) or other AI software to automate the analysis and put more intelligence and training behind it.
To learn how to overcome limitations and empower your business with automated compensation management, download our free eGuide, 8 Signs Your Compensation System is Holding Your Business Back.