We’ve heard one thing from the people and forces who are effectively managing their organizations’ revenue environment in our rapidly-evolving times: we need to disrupt our own game.
What stands out the most is how many “tried-and-true” practices actually now impede revenue performance. Following are three self-imposed disruptions that can unleash results—provided that they’re co-led by sales leaders and their revenue counterparts in marketing and customer success.
Sales Disruption #1: Rescheduling the revenue planning schedule—with all leaders in the room
Sales planning has been run the same way, for the same reasons, for ages. But today’s boards and executives don’t want old school plans; they want confidence that Sales will meet its forecast. It’s time to re-think what sales planning can be.
Transforming revenue performance demands more than yearly, bi-annual, or even quarterly planning. That cadence is now a laggard behavior. In the new normal, market conditions and competitive dynamics morph constantly. Continuous planning is required, according to Forrester research: The New Sales Imperative.
But continuous planning only delivers when all revenue departments participate. In our customer base, today’s best practice for a continuous cadence is weekly or bi-weekly. We love hearing about the important revenue insights that they uncover when Marketing, Sales, and Customer Success meet that often to analyze revenue performance and update their plans.
For example, one team uncovered the exact multiple—5X—that they need from Marketing dollars to confidently meet their Sales target, simply by tracing inputs and outputs from one team (Demand Generation) to the next (Sales). Another team discovered that a simple 1% reduction in churn justified the expense of their entire Customer Success organization.
Sales Disruption #2: Break out of data jail.
Revenue capture will remain a problem until organizations transform lazy assets in their businesses—poor sales enablement and uncoordinated roles—into assets that are profitable. This means orchestrating revenue performance with insights.
Have you ever wondered why it is that, simply by optimizing territory design, revenue leadership can increase sales 2 to 7 percent without modifying sales resources or strategy, per Harvard Business Review?
Traditional ways of creating sales territories and quotas are flawed, and those flows indicate an upstream problem. Revenue leadership must move beyond their spreadsheets and data overload to actual insights. On-the-mark territories and quotas depend entirely on revenue orchestration—assembling the necessary pillars to holistically design revenue performance. In our experience, three technology-enabled inputs are required:
- Operational sales management. As mentioned, most companies make the mistake of cobbling together sales plans in the same way they always have: Manually, once or twice a year. What they really need is a data-driven, systematic approach that dynamically accounts for people, territories, quotas, and crediting in real-time.
- Intelligent forecasting. According to Gartner, 55 percent of sales leaders don’t have high confidence in their revenue forecasting accuracy, and CSO Insights research reveals that 67 percent of organizations lack a formalized approach to revenue forecasting altogether. But good news does exist: leaders who use best-in-class forecasting tools and processes meet quota 97 percent of the time. These best practices include a clear and enforced sales process, high-quality data, and visibility across revenue leadership.
- Proper territories and quota management. Operationalize revenue planning, so what you get out reflects what you put in. Done right upstream, territories and quotas more effectively coordinate expectations across every specialized role in revenue operations — enabling the delivery of predictable results.
To learn more, join our co-hosted webinar on Apr 8th: “Sales Planning Rules to Break Immediately”!
Sales Disruption #3: Rethink the rep factor.
The majority of sales teams missed their number for 10 years prior to the pandemic. Since its onset, one study shows national performance decreased 39 percent more, according to CSO Insights and Peak Sales Recruiting. Motivation—down 49 percent—is one cause.
Gone are the days when revenue management can throw bodies at a sales problem. Their budget no longer has the dollars, nor their systems the efficiency. Entering the new normal means reimagining sales motivation immediately, particularly motivation tactics that revenue leaders once considered best practice. Here are a few:
- “Incentive compensation is just for sales.” Would you rather accelerate your entire revenue lifecycle, or just part it? Exactly. According to The Alexander Group, “what were once silo organizations—such as marketing, sales and customer success—are now connected integrated functions. These “many non-sales roles are eligible for compensation,” and deserve “to be paid for persuasion.”
- “Our ICM platform is a great performance manager.” Technology is an enabler, not a management tool. Specialized technology, like incentive compensation management (ICM) tools, is designed to bring value to users. Traditionally, revenue leaders have squandered adoption by using such tools to micromanage their revenue teams. Today, best-in-class executives operationalize ICM and other technology to micro-motivate the field, not micro-manage them.
- “Shadow accounting is just part of the job.” We’re all familiar with the fact that Sales spends only one-third of its time selling. While shadow accounting is one administrative contributor to this statistic, the problem exceeds how reps spend time: Teams that track commission payments on their own are behaving as if they don’t trust you. How can you empower them to believe they have commission certainty?
Rethinking the rep factor means paying all revenue teams for persuasion, creating trust and transparency around payments, and using technology to micro-motivate those teams—not micro-manage them. Listen to one of our favorite podcast episodes to learn how you can really say success is not a location when revenue teams work from home.
To learn more, watch our recorded webinar: Rethinking the Rep Factor in 2021!
Conclusion: Aim higher
2021 doesn’t leave time for mismanagement. It’s time to drive true motivation that speeds revenue performance and maximizes your existing investments.
The more that organizations convene on a regular basis with the right data and all revenue leaders in the room, the better they’ll adapt company strategies to harness historical performance, real-time market opportunities, and insights to architect valuable experiences—for prospects, customers, and their company stakeholders.
It’s time to break some rules, motivate revenue teams, and deliver revenue plans and performance that meet the higher expectations of this new world.
This blog originally appeared on the Xactly blog.