Not everyone responds well when change occurs. Some see it as a thing to fear. Others see it as an opportunity to take. The business enjoys predictability. When expectations are off, it opens the opportunity to doubt. Doubt leads to uncertainty. So how do we provide that warm, soft, blanket of trust and reliability to wrap ourselves in when things go cold?
In my last blog post, “The Evidence Economy: Are you missing sales opportunities?” the focus was on the definition of the Evidence Economy and importance to sales. Evidence is the result of data, context, and analysis. Sales and sales operation teams who apply evidence thinking to understand “why sellers win,” realize a clear advantage in the market.
Is this still true in uncertain times? Sales and Finance departments are inexorably linked together. They need each other for success. Both departments need evidence to succeed, especially in uncertainty.
FINANCE RESPONSE TO UNCERTAINTY
During the Great Recession, organizations that turned to focus on profitability rather than just a strategy of growth were shown to be successful long term. While the demands for goods and services in North America and European economies plummeted, companies were forced to confirm that fundamentals worked adequately. It’s been a decade since the Great Recession. In the face of uncertainty once again, what lessons can we apply through evidence?
During uncertain times, buyers with budgets demand more from markets. The buyer asks for more value and lower price. In response, finance and operations look to the line of business. With creative minds, they find new and exciting ways to split and slice offerings into complexities that will keep a keen eye on the margin. This new level of sophistication rolled out to the sales team may be perfect for senior management, but our lonely seller is now left with the reality that: selling has just gotten harder, and sales incentives are more confusing. It muddies motivators and adds to the uncertainty.
Results from this pressure on finance look to selling behavior such as bundled offers, cross-selling, higher-margin, fewer discounts, and ask sellers to reach beyond their skills for self-reporting.
There is a tension that arises from these changes. Sales are looking to respond to uncertainty with a streamlined and faster go to market plan, which includes exceptions and accelerators. These faster and simpler packages should result in higher volumes and include more considerable discretion on discounts to win more deals. Sales also have a low interest in “self-service” reporting as they would like to reduce or eliminate administrative duties to focus on selling. The mantra calls out that “we need to be quick, responsive, and to seize on opportunities that call for a simple plan to encourage faster contract, price, and quotes.”
Striking the right balance is difficult, especially during times of uncertainty. Evidence-based decisions allow for the alignment of the organization to follow in the path set forth by the boardroom, and often allow for changes to occur faster for recovery.
For the evidence to work (remember the equation, evidence comes from data that is analyzed with context,) finance holds a great deal of power in historical information. They also have a traditional skillset in analytics. They are the ideal partner for sales to leverage.
Technologies that allow the collaboration of ideas and exchange of understanding between these two departments are nearly a requirement today for successful operations. Spreadsheets and homegrown systems are not going to be accurate enough or malleable to the requirements for the organization.
The partnership between sales and finance needs to be built on trust and accuracy. CSO Insights 2018 Sales Operation Optimization Study shows that nearly 2/3 of organizations today are still using spreadsheets. The results of the study suggest that the use of a CRM System in conjunction with an SPM System shows an improvement in win rates. Technologies leveraged correctly help bring alignment of the direction of an organization and clarity to individuals to perform.
WHY EVIDENCE IS CRITICAL
Imagine for a moment, a matrix. On the left are the areas you need to support your sellers. It’s a list of abilities that start with the accuracy of calculating pay. As much as we hear about underpayment, there are just as many overpayments that go unnoticed. Think about the timeliness, and if I don’t get paid on time, there are several cycles of inquiries focused on payment, not focused on selling. You might add to that list the ability to engage the seller with skills, training, certification, and growth. Additionally, you find your way into team conversations about motivational programs for the profitable lines of business, removal of barriers to close, and drive a competitive spirit of winning.
For all of the data and deals included in this traditional sales performance management framework, it’s difficult to understand, “why is my team winning or losing?”
During times of uncertainty, this question of “why” is powerful. Why is important, primarily if you can provide the answers. These traditional questions of “When” are based on historical data. The same is true of “What” and “How.” Buy a seller a drink, and they will regale you for hours about the “How.”
Why is the real question. Knowing why allows for the ability to replicate the factors involved in the win and avoid all the risks in the loss.
Imagine that departments stopped communicating with each other. Marketing, Sales, Finance, Product, and the Senior Leadership each have their own set of data. Each holds a point of view supporting their own interests. It won’t be long before these teams start to duplicate work, divide focus in different directions, and the trust of the brand is drained away.
Imagine those teams now operate on the same facts. Those teams are aligned to the same goals from Senior Leadership. These cross-functional teams now become more efficient and effective throughout the organization outperforming the competition. Evidence can unify the organization.
Evidence provides a level of trust and confidence in leadership. Evidence provides the ability to assess and pivot to opportunities. It allows for the alignment of the organization to work together through the most challenging times, and help organizations recover faster from uncertain times.
If you would like to learn how Sales Performance Management with AI tools for evidence can help you amid uncertainty, click here to schedule a demonstration today.