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June 4, 2009

Business Intelligence for Sales

The Role of BI in Sales: the Old and the New

If you are in sales, have been in sales, or know someone who's a rep, you are probably familiar with this image: the rep sitting at the computer around 7 PM, "doing maintenance" which more often than not involves inputting endless amounts of facts and factoids into a spreadsheet. Going through the motions--but motions that, somehow, are required by the boss, by finance, and by an assorted number of bigwigs in the company. This is the old model of BI for sales.

The new model of BI for sales is radically different. Easier to use, more dynamic and interactive, it is focused on taking action rather than recording information. It is geared towards using current and past data to guide the reps and their managers to constantly refine their knowledge of their business, to spot untapped potential and to encourage a healthy spirit of emulation among team-members, ultimately boosting both sales and teamwork.

The Old Model and Its Drawbacks
The old model of BI in sales is problematic because it is almost entirely reactive. The rep essentially uses BI as a receptacle of facts and figures that have already taken place. Sure, these facts and figures will be analyzed by someone at some point, typically through a process similar to this:

1 - The rep records the facts as maintenance
2 - The sales manager collects all the reps' records in one massive spreadsheet
3 - The spreadsheet is analyzed by various functions (often not talking to one-another), such as product management, sales management, finance, human resources, operations
4 - The results of the analysis, often varying depending on who was the author, are then (hopefully) relayed back to the sales reps, more often than not at the end of the quarter when it's too late to do anything to correct the situation.

Worse yet, in many organizations each rep has his own way to record data or to prepare a report, leaving it to the district- or sales manager to do the consolidation, which can be then riddled with inconsistencies and manual errors. "Good enough for government work" is actually not good enough at all: especially when more and more companies are getting smart and making intelligent use of reporting and analysis tools.

Other drawbacks of the old model of BI for sales are as follows:

- Maintenance time takes time away from face-to-face client relationships
- This model tells reps and management only what reps see and experience. Untapped potential slips by unnoticed
- This model fosters a reactive culture rather than a proactive one
- Even reaction is oftentimes too slow, since there are no built-in mechanisms to correct situations in real time before the end of important deadlines
- Analysis becomes subjective, and is often different depending on the department and function performing it, thus greatly watering down its strategic value

Today's more forward-looking companies, on the other hand, understand that BI should be an active partner of sales. The least thing it should do is record facts. Where its true value lies is in enabling the sales reps to, essentially, know more than their competitors, but with much less effort, while being able to take actions in real time to continually improve the quarter.

In other words, effective BI for sales can suggest what to do tomorrow rather than parrot what's happened yesterday.

The New Model and its Benefits
If the old model's focus is recording and reaction, the goal of the new model is action through knowledge of the most important facts. In the new model of BI for sales, reps employ easy to use, Web-based interfaces to learn, understand and share data and information about their product, clients, territory, operations and even competitors so they can act upon it in real time. For example, a good BI solution will automatically suggest to a sales rep what the best sales route would be, computing it through geographic maps and the system's intelligent understanding of customers' value.

It may also suggest to the rep which route to take to ensure that the quota of a specific line is met--all at the click of a mouse. And of course, it will enable the rep to share, in real time, critical information with clients. We will see practical examples of this model. For now, let's list some of its main benefits:

- Enabling reps to get to know their territory better
- Enabling reps to see sales targets and acting to meet and surpass them
- Always having reliable information that is consistent company-wide, to share with clients
- Letting reps and managers spotting the potential in their territory, so that it can be exploited for a healthier competitive position
- Putting in place an "understand, act, test result" cycle for continuous performance improvement
- Boosting teamwork by letting management share with the reps the success stories, the goals met and other landmarks with one, consistent set of numbers

Let's now delve a little deeper into the new model of business intelligence for sales, and use some examples to see how its features can be beneficial to the forward-thinking sales organization.

A Closer Look at a Smart BI Model for Sales
Let's take a step back and look at what "smart BI" is in a general sense. Yes, "smart business intelligence" may seem like a redundancy, but it is not. BI is a tool. Tools shouldn't come out of the box unless there is a specific task to perform. Thus, even an "intelligent" tool will be ineffective or even detrimental unless it is smartly aimed at fulfilling that task.

You've heard the expression "if you are a hammer, every problem looks like a nail"; unfortunately, that has been the reason why BI has not been implemented smartly by a high number of companies. According to analyst firm Gartner, lack of a strategic focus has been by far the number one reason why BI projects fail. For these companies, just having BI must have automatically meant "being smarter," while in reality they were wasting money and resources on something that was being used inefficiently (at best).

In a general sense, smart BI is this: business intelligence solutions and processes squarely aimed at fulfilling the company's strategic goals. Through smart BI, resources and processes are optimized, inefficiencies are minimized, potential is identified and exploited--all for the strategic advancement of the company.

Smart BI for a department within the company (in our case, sales), is no different. It should be squarely aimed at fulfilling the strategic goal of the department, of course within the greater environment of the company's own goals.

But to do this, it needs to identify the "levers" of action, which in turn depend on knowledge of the most critical information. Let's take a closer look.

The Strategic Goal of Sales
Of all departments, the goal of sales within the company's strategy should be the most self-explanatory. Doing away with motivational-poster-style corporate poetry, the goal of sales is to drive up revenue and increase market-share. This, in turn, means two things:

1 - Matching the most productive clients with the most profitable product lines and helping drive up demand
2 - Outperforming the competition with existing customers, new prospects and even untapped segments of the market that may be favorable to the company's type of business

Fulfilling this goal relies heavily on knowledge--knowledge of the product, of the clients, of the territory, of the competition, and of the possibilities that may not have been yet explored but that may be a gold-mine waiting to be exploited. In short, fulfilling this goal relies heavily on knowledge.

Enter Business Intelligence
Business intelligence can give sales the knowledge required to fulfill the goal outlined in the previous point. But the key here is not just knowledge in the old-fashioned sense: it's making knowledge actionable, so that there can be a continuous, active drive towards higher performance, while guided by sound and critical pieces of information.

In general, a dynamic, Web-based BI solution that is deployable company-wide and optimized to fit each department's strategic goals should give sales these benefits:

- Optimizing sales routes and minimizing windshield time, by setting up automatic reports in which the lifetime value of each customer stands out, and by mashing up key metrics about customers' history and potential with geographic maps.
- Correctly identifying the potential in your line and territory, by using robust data analysis features to quickly and intuitively identifying the reasons behind numbers and finding new opportunities.
- Being proactive rather than reactive, and correcting situations before they develop into problems, through dashboards, scorecards and actionable KPIs. These give you a tangible, real-time view of sales targets, increasing motivation and letting team members take critical actions while they can still make a difference.
- Becoming the clients' reliable business partner, by sharing consistent data about product, profitability, inventory, orders and more through impactful reports and visualization tools available from anywhere with Internet connection.
- Increasing face-time with clients, by making account maintenance easier and quicker through automatic report-generation and easy connection with the company's CRM system.

For a practical example of how some BI tools--used smartly in this "new" way--can help improve sales, check out my post on Heat Maps for Sales.

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