Leveling the Playing Field With Predictive Guidance

If you are like most organizations, your sales team consists of primarily “B” and “C” players along with a handful of “A” performers, or those reps that consistently meet or exceed quota and do so profitably. Imagine for a moment that all of the B and C players could sell profitably at the same level as the A players. What impact would this have on your top and bottom line? No doubt it would be huge, but can it be done?

Javier Aldrete

Javier Aldrete

The key to achieving this kind of impact is enabling all reps to know which customers to call on, which products to talk about and what price to quote through the use of predictive guidance. Many B2B sales reps sell from a catalog of tens or even hundreds of thousands of products, and it’s not uncommon for them to each manage 100 or more accounts. The most experienced sales reps are likely to have a better idea of which products make sense to cross-sell into a given account and what price to quote, but likely only for less than the top 20 percent of products and their accounts. New and less experienced reps are overwhelmed with by the sheer volume and complexity of the decisions, making it difficult to get up to speed.

The fact is that in many B2B industries, a significant percentage of experienced sales reps will retire in the next several years, creating a big knowledge gap. The “tribal knowledge” sales teams have relied on to hit their numbers will begin to disappear. However, by delivering predictive guidance directly to sales reps, companies can provide the answers sales reps need without requiring tribal knowledge, effectively leveling the playing field.

Two of those questions reps need answers to are which customers to call on and what products to talk about. Given their large books of business and limited amount of time, sales reps need to spend their time with the customers most likely to buy more from them in order to hit and exceed quota. New and less experienced reps are largely flying blind when it comes to this given the sheer volume of products and accounts. What if each rep, whether experienced or brand new, knew the accounts with the highest probability to buy more from them?

Using a company’s transaction data, predictive models are able to determine what “ideal customers” look like in terms of spend, mix and breadth of footprint across the product catalog, then match all other customers to the appropriate purchase pattern profile. This reveals where whitespace exists, which is precisely where sales reps have the opportunity to sell more.

Once a sales opportunity is identified, whether or not the sale is profitable hinges on the sales rep’s price decision. Consider this: If every one of the B and C performers could take every deal [Read more...]

Pricing Guidance Increases Margins, Supports Sales Teams’ Decision-Making Process

Recently, the German industrial business publication MaschinenMarkt published Eric Hill’s thoughts on how pricing guidance increases margins. Read the original article, or read the full translation below.


Pricing decisions are some of the most difficult decisions to make. The fact is that B2B companies often have tens of thousands of products and tens of thousands of customers, which causes massive decision complexity for their sales reps. Compounding this massive complexity are changing competitive dynamics, industry consolidation, employee turnover and changing priorities from management. With so many nuanced and complex factors involved in B2B sales, even seemingly small mistakes in sales reps’ decision processes can quickly add up to significant bottom-line losses and lost share.

ehills_arms_crossed_shoulders up transparent background

Eric Hills

In an attempt to help, many managers provide sales reps with pricing analytics reports and high-level price guidance about margin targets and discount rules. These approaches fail for two reasons: Pricing analytics reports often only contain hindsight analytics, which fail to give reps any guidance about how to make better pricing decisions in the future. Secondly, the guidance turns out to be irrelevant to nearly every selling circumstance the reps encounter because it is too simplistic and general. As a result, they rely on intuition and experience when quoting prices, over-discounting as much as 50 percent of the time and over-pricing as much as 20 percent of the time.

Sales reps don’t want to research the right price for every transaction, they simply want the answers. They need pricing guidance that’s immediately actionable and tells them the optimal price for every selling circumstance.

Price Optimization: Eliminating the Guesswork and Increasing Margins

By applying predictive science and algorithms to B2B companies’ transaction data and delivering the output as actionable pricing guidance to sales reps, sales teams are able to hit or exceed margin targets and gain share. In essence, it’s all about the quality of pricing guidance delivered to the reps.

It does not have to be a huge change in pricing to make a difference:  A one percent change in price can result in a five to 15 percent change in gross margin dollars, so getting the price point right is not only a matter of business growth, but business survival, at least in the long run.

Price optimization solutions based on predictive models can quantify the true factors which affect price outcomes, rationally align prices across multiple customer and product dimensions, and predict customer buying response to different prices. Thus, companies can instantly determine [Read more...]

Does Your Sales Strategy Stink?

One of my favorite blogs, Sales Benchmark Index, recently made a bold statement: 78 percent of sales strategies are hopeless. It’s not a comforting statement for any member of a sales organization to read, but do read on, because the reasons why might surprise you.

sales strategy

Lack of Communication

In my experience, in most cases companies do have a strategy but it’s not communicated to those in the customer-facing frontlines like sales and customer service in a way that they can consistently translate into clear actions.

Unfortunately, that is a tough thing to do because it requires strong sales management and tools that help sales people identify and uncover the needs of their customers. These tools act like a super human sales analyst digging through the data available to identify what customers need and presenting those needs at the right time to sales people in a way that is aligned with the corporate strategy. In other words, predictive tools and strong coaching can translate a sales strategy into specific actions that drive relevant customer interactions that will bring overall growth.

Coaching is Key

The strategy must also make it easier for managers to coach in an objective manner. Much of a sales manager’s day is likely spent on administrative and reporting tasks, rather than customer- and market-facing activities, despite best efforts. This leaves too little time to coach sales reps to help them keep, grow and win more business, resulting in inefficient time allocation and often, team underperformance.

As efficiency wanes, many companies implement more sales processes, increase the number of reports and look to technology solutions, like CRM. The underlying assumption is that more visibility into sales team activities will help identify areas for improvement and ultimately drive better performance. However, these solutions often exacerbate the problem, creating even more administrative and reporting tasks for reps and managers alike.

This vicious cycle is well-described in a recent Gartner report, “Most technology investments were spent on salesforce automation, with sales performance management and sales effectiveness considered back-office functions and out of the purview of sales management. This resulted in sales organizations underspending on sales coaching, content management, and other tools to help support and manage sales teams. Those very decisions are beginning to manifest themselves in less-than-stellar sales performance.”

In order to effectively coach to better performance, sales managers and reps need visibility into the specific opportunities most likely to win business. That information provides an objective and systematic framework to measure performance across territories and coach reps to improve.