LucidEra’s Rudin: Analytics Brings Science to the Art of the Sale

May 20, 2009

Listen to the Podcast:

Sales 2.0 consists of tools and technology that transform selling from an art into a science that is repeatable, predictable, teachable, and measurable.

The difference between art and science is similar to the difference between fiction and fantasy vs fact in your sales pipeline. This scenario demonstrates the impact of relying upon gut-feel and opinion (art) vs. having access to the right sales analytics (science):

A VP of sales relies upon weekly transactional CRM reports to monitor the pipeline. As quarter end approaches, all signs are positive - the dollar amount is on track; and there are many deals in the final stages of the sales cycle. She confidently tells her CEO that they’re going to hit their number. But things change in the final days of the quarter and the pipeline starts falling apart.

As it turns out, the VP didn’t know that many of the deals in the final stages of the pipeline were actually stuck. She didn’t know that several deals had been pushed out to the following quarter and were replaced by newer, less mature deals. And she didn’t know that many important deals were being managed by reps that had below average close rates.

With a fact-based sales pipeline, you’re able to look at the performance of sales reps across a broad range of metrics. You look at not just which deals are in the pipeline, but you’re also able to compare to prior historical snapshots to see how quickly deals are moving, and evaluate the effectiveness of the sales process in order to identify issues that might be holding you back.

Discussions with sales reps aren’t just about which deals they think they’re going to close. You also look at metrics such as how long a deal has been in each sales stage compared to typical deals that your company closes. And you look at the sales rep’s performance not just from the perspective of percentage of quota attainment, but also by taking into account other key metrics. These include win rates, average length of time it takes to win (and lose) deals, average deal size, and average discounts.

In addition, you look at which opportunities are being managed by reps that need coaching in certain areas. Instead of using the same rules-of thumb year after year (“My pipeline needs to be five times my quota”), you’re able to look at the historical information to find out what percentage of the pipeline you are actually closing each quarter.

The result is far greater pipeline predictability because issues can be found quickly, and corrective actions can be taken. The availability of simple to set up and use software-as-a-service (SaaS) business intelligence (BI) solutions that are delivered directly to line of business managers is helping to power the shift to Sales 2.0.

–Ken Rudin, Chief Marketing Officer, Co-Founder, LucidEra

Posted by Carl · Filed Under Interviews