Sales Planning

We all want to be able to magically predict the future. To see the months or years ahead and understand how our business will grow.  Today, we have what it takes to do that. Except there’s no actual magic involved. Just processes and tools that allow us to get an accurate reading of future revenue and growth.  Sales forecasting is an important part of that process. An accurate sales forecast is key in building organizational growth and understanding your future business needs. It can help guide your sales direction and product releases, and impact all parts of your business—from hiring to budgeting. That means it impacts departments across the organization, whether it be sales and marketing, HR or finance. So what exactly is sales forecasting and what’s the best way to approach it? This guide will explore those key questions. 💡Key Takeaways:  A sales forecast empowers you to estimate future sales revenue, allowing you to better plan ahead and put the resources in place to meet your future sales expectations and revenue goals. An accurate sales forecast will impact operations across your business, influencing hiring decisions, quota and territory planning and budgeting—and allowing you to better meet your targets and set realistic growth goals. How you approach your sales forecast will depend on your business needs, but there are several approaches and methodologies you can draw from to get your forecast right. And the right technology will help you stay on top of your forecasting needs.  What Is Sales Forecasting?  Businesses use sales forecasting to estimate future sales revenue. Whether you’re looking at the month, quarter or year ahead, a sales forecast helps you predict how much your company will sell during the specified time frame, and lets you plan accordingly for those future sales. Different from your sales target—which is what you hope to make in a specified time period—the sales forecast looks at what you expect to sell. Not surprisingly, then, the best sales forecasts are those that are the most accurate. Accuracy is critical for businesses trying to use their forecast to make decisions around hiring, compensation, inventory, marketing and more. And accomplishing accuracy means having the right inputs and approach.  Your sales team and product managers will play a big role in getting your sales forecast right, making sales projections based on the sales pipeline, historical data and your product release schedule. The overall size of the available market and your organization’s share of it will also inform your final forecast. Why Is Sales Forecasting Important?  Forecasting is a critical part of your sales operations, but it can also impact your entire organization. It ensures you have the right resources in place—from product inventory to the appropriate staff at every level of your business—and helps you set the right quotas and keep your costs aligned. All of which ensures you’re making the most impactful business decisions and the best choices to meet your organizational goals. An accurate sales forecast, in other words, takes the guesswork out of your decision making—enabling you to address any challenges, make tough choices and schedule your product development to meet demand. Who Is Responsible for a Sales Forecast?  While the exact roles responsible for your sales forecast will vary from organization to organization, they usually consist of any or all of the following: Sales Managers and Executives Managers and sales executives have a big picture view of their sales team and operations—meaning they understand the kinds of numbers each sales representative can drive and the territories they’re best suited to take on.  Sales Representatives Sales representatives can offer data on their personal sales pipeline and historical success rate, contributing to your overall sales forecast and demonstrating current and future trends and opportunities. Product Leaders Your product leaders can offer input on when new products will be released and new inventory available—informing when new potential sales will be ready to be made. What Are the Benefits of an Accurate Sales Forecast? Sales forecasting can benefit your business in a multitude of ways. Here are eight benefits accurate sales forecasting can bring to your business: 1. It Helps You Set Quotas and Plan Territories Getting the most out of your sales operations starts with setting quotas and planning out territories for your sales team. But how do you know who to assign where, and how much to realistically expect from them? An accurate sales forecast can help, giving you a better idea of what territories need the attention of your best sales associates and how to segment them most effectively to meet your targets. 2. It Makes It Easier To Meet Your Targets Sales forecasting doesn’t just help you set better, more realistic goals for your business—it puts you in a stronger position to attain those objectives. An accurate forecast lets you better understand where growth is possible and where to hedge your bets—allowing you to create sales targets that are challenging but reachable. 3. It Allows You To Build a Better Budget When you know what to expect in the year or quarter ahead, you can better understand where to allocate your budget. As cost and revenue estimates become more accurate, you better understand when you need to allocate additional resources and plan for future income flow.  4. It Helps You Hire the Right Team When you know what to expect ahead, you can also hire or reallocate the team you need to support those plans. Whether it’s marketing staff, customer support or new sales associates, you can ensure you have the right people in place to meet market demand and make your goals happen.  5. It Lets You Better Understand Your Customers By looking at gaps in your customers’ product usage and identifying where they would benefit from additional enhancements or services, your sales forecast helps you better stay on top of the needs of your customers—and identify potential upsell and cross-sell opportunities. 6. It Helps Identify Obstacles to Growth An accurate sales forecast lets you look ahead to identify not just where your business has the most growth potential, but also where the biggest obstacles lie in attaining that growth. And by identifying problem areas early, you can correct your course before those issues affect your growth goals. 7. It Empowers Your Continuous Planning Efforts By allowing you to better allocate resources, hire more effectively and budget better, your sales forecast will help fuel your continuous planning efforts and manage risk along the way. 8. It Enhances Your Sales Performance Finally, with better data at your fingertips, your team will know where to prospect for new business and do a better job of keeping the sales pipeline moving at every stage.  How To Accurately Forecast Sales  There are a variety of sales forecasting approaches your business can use—or you can opt to combine methodologies depending on the sales processes and inputs you have in place. Some of the most popular methods include: 1. Historical  Forecasting With historical forecasting, your sales forecast pulls on historical data to make predictions for the time period ahead. Past data can help you understand the rhythm your sales take—how they change through the seasons and where demand for new products might fall. All of which can help you discern future trends. Just keep in mind that the past isn’t the future and adjust for market changes. Example: If traditionally you’ve seen sales volumes grow $150,000 per year and sales revenue was $1 million this year, next year you might forecast sales of $1,150,000. 2. Sales Funnel-Based Forecasting Funnel-based forecasting is based on your sales funnel, which can be a strong indicator of future sales success. With up-to-date data from your associates on the sales they’re pursuing, and how far along they are, you can begin to feed your forecast and create a picture of what your future sales will look like. Example: If you have 300 prospects in the funnel and know you're batting a 75-to-1 ratio—with 75 unqualified prospects entering the sales funnel for everyone that ends up buying—you can forecast for four sales. An understanding of how long it takes a prospect to make it through the funnel will let you know when to expect those sales to happen. 3. A Mixed Approach But why choose one single approach when you can take inputs and techniques from both for a more comprehensive look ahead? But while this may offer a more sophisticated look at your sales forecast, it can also become overly complex and hard to manage—so the trick is to find the right balance. Example: Historical data may lead you to forecast that your sales revenue will rise by $150,000 next year, but your sales funnel will let you know whether you have enough prospects making their way through the funnel at a fast enough rate to meet that goal. What Is the Difference Between a Bottom-Up Sales Forecast and a Top-Down Sales Forecast? Whatever forecasting approach you take, there are two different methods you can draw from as you put together your sales forecast. You can start from the bottom or go top-down. The method you choose will depend on your business needs. Let’s take a look at each in turn: Bottom-Up Sales Forecasts With bottom-up sales forecasting, teams start with low-level data such as customer and product information, moving up from there toward revenue. For instance, your team might start a bottom-up sales forecast by looking at your sales volumes over the last few years and the number of orders expected to be placed in the time period ahead. From there, you could look at how much you expect to charge for your products—enabling you to calculate expected revenue.  Top-Down Sales Forecasts Top-down sales forecasting, on the other hand, does things the other way around—working downwards toward revenue instead. For instance, you might start a top-down sales forecast by looking at the total addressable market for your product, from there moving down to determine an estimate of your business’s market share. With that in place, you can begin to forecast your potential revenue for the year or timeframe ahead.   What Are the Main Sales Forecasting Challenges and What Factors Can Impact Your Sales Forecast? Once you’ve figured out your approach and methodology, though, there are other challenges that you might find yourself facing as you try to build the most accurate sales forecast you can. These obstacles can come from inside your organization or reverberate from market and industry changes. Some possible challenges include: 1. Shifts in the Market, Industry or Economic Climate  A recession or any kind of economic uncertainty could slow down your projected sales cycle, as customers hold back on spending. Similarly, a shift in the industry—such as a new competing solution or a newfound market need—could also have an effect, good or bad. That’s why keeping on top of any changes to the market, industry or economy as a whole will help you create a more accurate sales forecast. 2. Changes to the Sales Team Sales representatives, like anyone in your organization, may choose to leave the business voluntarily—or may be terminated. Whatever the reason for their departure, this can temporarily create a hole in your sales operations or leave the rest of your sales team stretched thin as you work to fill the gap. You may need to alter your forecast accordingly as a result—at least until you’ve hired someone new and given them a chance to build up their sales funnel.  3. Changes to Your Sales Operations  A sales representative leaving, for whatever reason, isn’t the only change that can affect your sales operations and in turn, impact your sales forecast. Shifts in territories can slow down sales as your representatives get to know and build up contacts in a new area. Changes to your commission structure might also have an impact—either positive or negative—as sales associates react to the new incentives. Any shifts like these should be something you consider when putting your forecast together. 4. Changes in Product Demand Some products will last the test of time, with slow and steady demand, while others will see early interest but fall out of favor more quickly. Others still will have seasonal ups and downs. Factors like these are bound to impact your future sales—as will any changes you’ve made to your product that may affect demand, from pricing adjustments to technology enhancements. For a more accurate sales forecast, then, these product demand fluctuations and anything that affects them are worth taking into consideration.  How Can Forecasting Software Be Used To Overcome Challenges? The right technology can ensure your sales forecast draws on the best data and considers all of the trends that might get in the way of an accurate estimate of future sales. Vena Budgeting and Forecasting Software can help, with products and features that include: Top-down or bottom-up forecasting capabilities Flexible and dynamic forecasting options Ready-to-use templates Rolling forecast functionality, for projections on the fly An easy-to-use Excel interface Try our free, ready-to-use 12-month rolling forecast Excel template to help you get started on your forecasting needs.  Trust Vena To Optimize Your Sales Forecasts  An accurate sales forecast is a key tool in setting—and meeting—your future revenue and growth goals. By understanding your future sales expectations, you can better plan for all contingencies, for more accurate hiring, budgeting, quota setting and more. But building the best sales forecast for your business means choosing the method and approach to sales forecasting that works for you. And to overcome the challenges and create the most accurate sales forecast possible, the right technology is also key.  That’s where Vena can help. Excel at Optimizing Your Sales Forecasts Vena’s feature-rich financial forecasting software empowers you to make bottom-up or top-down adjustments to your forecast so you can meet those last-minute deadlines—and build budgeting agility with rolling forecasts.

The role of finance in pricing is a powerful one and for several reasons. For one, no one else within the organization has quite the influence of the finance department. They work closely with all departments and can leverage their insights to achieve better pricing success.  Finance teams can take the lead in valuation to direct and oversee all pricing activities within the company. They proactively find and fix all profit loopholes, including sales, product lines and even accounting.  Let’s explore how finance plays a key role in sales and marketing strategies. 💡Key Takeaways:  Finance, sales and marketing teams can work together to set disciplined price execution, implement new processes and define price boundaries to avoid reps arbitrarily giving differing prices.  Finance professionals know what owners, investors and stakeholders expect in overall returns. They use margin guidance and the margin floor to meet targets.  Pricing committee participation ensures effective price monitoring. It is also how finance professionals become price leaders, vital to the overall success of the companies where they work. The Role of Finance in Sales and Marketing Strategies In some companies, sales managers make pricing decisions based on feedback from salespeople working in the field. Without effective pricing processes, salespeople often make intuitive pricing decisions. Source: Green Light Unfortunately, sharp price drops are common, but chaotic due to the pressure of closing new deals and reaching sales quotas. Set pricing based on insights from analytical data and industry standards, not on whether the sales reps are giving special discounts to close deals.  Working closely with sales and marketing, finance teams can support the repair of faulty systems and bring discipline and transparency to pricing decisions. Here's how finance professionals can help sales and marketing teams with pricing decisions: Disciplined Price Execution: With so many factors influencing a company's bottom line, choosing the best method to price any given product and achieve its desired profitability can be challenging. However, disciplined price execution depends on the price sensitivity of particular products or the willingness of customers to pay different prices for products without impacting demand. When they leverage their business acumen and analytical abilities, finance teams can help develop sophisticated business rules and tools to quantify price sensitivity, assess customers' willingness to pay and improve prices. Documenting and Implementing New Processes: Without robust processes to guarantee disciplined pricing and price execution, the consequences of not adhering to pricing principles for the organization are too significant to ignore. Finance can help create processes and tools for documenting, monitoring and communicating incentive systems, appropriate discounts and spreads. That way, sales teams submit and substantiate any pricing changes for approval. Define Price Boundaries: Businesses often use historical data, such as cost information, to set prices. On the anniversaries of each contract and when considering the price, most of the time, these companies rarely calculate the "costs to serve" each customer. It is a simplistic approach that disregards the consumer's perceived product value as an essential factor in determining the final prices. Finance can monitor to see if price points are too high or too low. With scenario planning activities, the finance department can execute test-and-learn plans that help set pricing limits.  How Finance Guides Pricing Decisions One of the key financial metrics constantly measured and monitored by a business is profitability growth. For any company, profit and positive cash flow are critical, and with a company that does not initially have investors or financing, profit may only be its capital. For these organizations, product pricing is vital for their financial success. Fluctuations and special deals granted by sales for target attainment are detrimental.  Business failure is imminent for these companies without sufficient cash flow or the financial resources to operate and maintain a company. Finance teams play a critical role for these companies when setting pricing.  Large corporations also focus on profitability growth. While pricing isn't as critical to keep the doors open, ensuring maximum profits for the company and its stakeholders is vital.   Source: YouTube   We've reviewed the role finance professionals play in helping salespeople better understand the importance of sticking to the pricing set by the organization. Let's review how finance professionals guide pricing decisions based on what's best for the organization. Margin Guidance Finance knows what owners or investors expect regarding overall returns. They can offer this guidance to price managers who can ensure that their gross margins across all of their products meet that margin target.  Margin Floor Some businesses set margin floors and will not accept any deal with a margin lower than this floor. Most finance experts are not big fans of margin floors as occasionally businesses are willing to take a loss in some area to gain profits. However, one of the roles of finance is to reduce risks for companies. Pricing Committee Participation Some businesses have a valuation committee where participants from various departments occasionally meet to confer and enhance pricing practices. Finance professionals should be part of the pricing committee. When changes in valuation methods get proposed, finance plays an essential role in forecasting the financial impact of such changes. Price Monitoring Price monitoring is where financial and valuation managers can and should work closely together. Finance continuously collects and analyzes business data. Both teams must consider pricing data to help them comprehend the business's health.  For example, tracking average discounts per product can indicate that market conditions are changing. Another indicator of market movement is the win/loss ratio. There are multiple KPIs or metrics that financial and valuation managers need to track. Source: Vena Agile Scenario Planning for Improved Business Decisions Test your business decisions with Vena’s agile scenario planning. Check your current product pricing against several possible scenarios so you can determine the best course of action when market conditions change. You'll still have some unknowns, but those variables will become more manageable with Vena.   Excel at Product Pricing Plan for future profits with confidence. With Vena Scenario Analysis Software, you'll understand how your pricing decisions today affect tomorrow's profits.

An effective sales compensation plan will incentivize sales professionals to reach their goals by outlining their earning potential during the deals they close. Compensate your teams fairly. Pay top performers more while ensuring poor performers don't find ways to manipulate the system and offer competitive pay. Also, consider the financial wellness of your organization. Incentive compensation management requires planning. Let's discuss some ways to develop your compensation plan for your sales professionals but first, consider a few questions that will help you create your plan. 💡Key Takeaways:      Sales compensation plans are essential factors in motivating your sales reps. Design a plan that aligns with your organization's values and industry standards—along with a few perks. Around 61% of sales professionals feel underappreciated and believe that the companies they have worked for didn't create a clear path to advancement. Each is due to poor compensation plans. To develop an effective sales compensation plan, you need a team who can manage it and a plan that benefits the reps (and the company) and rewards top performers well. Key Questions To Ask When Developing a Sales Compensation Plan  A sales compensation plan is an essential factor in motivating your sales teams. Design one that aligns with your organization's values and industry standards (we recommend adding a few perks your competitors aren't.) When developing your plan, consider what will help you keep your top talent happy and motivate those still learning to improve their skills. Here are some questions to consider when developing your compensation plan: What behaviors do you want the sales compensation plan to encourage? What are your organization's performance standards? What is the right compensation based on specific demographics? What objectives of the job role do you want to highlight? What compensation aligns with your sales professional engagement strategy? How To Create An Effective Sales Compensation Plan Nearly 61% of sales professionals feel underappreciated. In a survey published by Pipe Drive, sales reps also stated that around 42% of companies they have worked for did not create a clear career path for them to advance.                    Source: Sales Xceleration  With labor shortages plaguing companies across every industry, you can no longer take the value sales reps bring to your organization for granted. Creating effective sales compensation plans is essential to your sales professional engagement strategy. That can mean the difference between superior retention and high attrition of talent. Here are some key strategies for building an effective compensation plan: 1. Establish a Sales Compensation Plan Design Team Developing or updating a sales compensation plan should include getting input and support organization-wide, especially those at the highest levels. Form a sales compensation design team that involves C-suite executives and representatives from the sales, human resources and finance teams. They can provide insight into how the organization's plan aligns with goals and the impact of the sales professionals on business success. 2. Create a Win-Win Compensation Plan Typically, sales compensation plans only benefit one party—the organization. A sales compensation plan should be a win-win for both the company and the sales reps who work for them. To do this, you will need a well-crafted plan with compensation tied to no less than two of the following three key factors:  Company sales performance Departmental performance Individual sales performance If your plan ties the salesperson's compensation solely to performance, the business could perform poorly, but the sales professional will still get paid well. In addition, if your organization achieves its sales target, each sales professional will profit from achieving the company's overall goal.  Most companies typically specify which portion of employee compensation relates to the impact they can have on departmental and business sales objectives. Imagine an environment where every sales team member has concerns for common goals.   3. Focus on Balance and Achievability Companies offer various types of compensation plans. Design the plan that works best for your organization. It should be easy to understand, have achievable elements and fit each sales position whenever possible. If your teams have to work too hard to hit a quota and get a commission, you should expect high turnover and low morale. 4. Make the Plan Easy To Administer and Understand That old acronym K.I.S.S.—keep it simple, silly—applies to effective sales compensation plans. They must be easy for your management teams to implement and for your sales teams to understand. If your compensation plan involves a lot of tracking (especially if they have to do it manually), sales teams may spend more time figuring out their compensation than earning it. 5. Make Sure To Reward Top Performers Reward top performers with extra compensation. You can offer additional incentives if they achieve 100% of their sales quotas along with all plan requirements. We have outlined the reasons why: They did as you asked: When sales professionals achieve 100% of their sales quota, offering additional compensation above the standard commissions makes workers feel valued and want to work harder in the future. Incentivize them to be the highest earner in the company. They stop "sandbagging" deals: Sales professionals will continue to close deals even at the end of the year. Reps who get escalated commissions and bonuses above their sales quota work harder. Do not limit their earning potential. They will not limit their work.   You attract better talent: Organizations that offer escalators and bonuses at and beyond 100% of the quota attract great salespeople. If sales professionals are not focusing on potential earnings by meeting 100% of their quota and above, you do not want them.            Source: Incentive Compensation Management Software - Vena  Automate Your Sales Compensation Plan With Vena Solutions Get a central database, Excel templates and workflow automation with Vena's Incentive Compensation Management (ICM) solution all on one platform. Benefit from efficient and transparent sales compensation plans and improve payment accuracy, visibility and sales performance. Manage your entire compensation process, automate compensation calculations and spend less time auditing. Use the insights from our ICM solution to develop your sales compensation plan. Excel at Sales Compensation Planning Let your sales teams know that you value them while also ensuring the financial wellness of your organization with Vena Incentive Compensation Planning Software.

Payment operations transfer money to a business, also known as B2B payments. It comprises transaction initiations, approvals processing and managing issues. Payment operations have been an expansive challenge for companies for decades. Before digital transformation and automation, volume and frequency alone meant we needed an entire team focused on inbound and outbound payments.  These roles require exceptional management, customer service, compliance processes and accounting skills, and they need AR automation tools that simplify their accounting operations while providing multiple accounting solutions.   💡Key Takeaways:      Integrating with AR automation tools is the quickest way to optimize your payment operations. These integrations increase the functionality of your organization's ERP system. The benefits of integrating your AR processes for payment operations include faster processing times and improved DSO—the days a sale is outstanding. It will free up time and financial resources. Payment operations best practices include defining operational needs, determining usability, training and testing and optimizing your processes to ensure data security compliance. AR Processes Integration With Payment Operations   Integrating with AR automation tools is the quickest way to optimize your payment operations. These integrations are essential for increasing the functionality of your organization's ERP system and rapidly expanding your methods.  AR integrations come in numerous forms. The best ones integrate seamlessly with your entire tech stack. You'll have the ability to automate your AR processes. Along with convenience, AR integration can support your operation beyond standard automation, including: Offering various forms of payment Managing fees to encourage certain payment methods Sending sales orders, custom invoices and billing reminders Creating custom collection programs and adding notes to the finance team to improve AR management Sending branded interfaces for checkout and toggling payment options   Adding multiple entities and subsidiaries Top 3 Benefits of Integrated Payment Operations There are numerous reasons CFOs choose to invest in integrated payment operations, especially regarding vital AR functions. The reality is that the time, resources and cost savings are purely unmatched. Image Source: PYMTS  Let's discuss the top three benefits:  1. Speed Up Processing Over 87% of businesses with automated payment operations report quicker processing and improved team efficiency. AR integration automates your team's tedious manual workflows while making checkout processes more convenient for users. That means quicker and more precise payments.  2. Improve Days Sales Outstanding (DSO) Rates Companies that handle large volumes of invoices profit the most from a shorter DSO turnaround time. But even small businesses that process between 500 and 15,000 invoices monthly may still save days or weeks waiting for payments. Image Source: PYMTS  3. Make Time and Free Up Resources Your accounting and AR teams shouldn't spend valuable hours on data entry. As drivers of business, finance professionals must have the time and resources to take on a more strategic role. AR automation tools free up time for your teams  so they can spend time focusing on what matters, the strategic management of your company's financial resources. Payment Operations Best Practices While the advantages are obvious, executing a fruitful integration of payment operations automation is often unclear. There are so many choices that it takes months to sift through them all. Here is a list of payment operations best practices to assist you in finding your ideal solution as soon as possible: 1. Define Your Operational Needs Once you determine what your organization needs regarding B2B payments, it's much easier to review all your options and find the right solution. Additional features are great, but whichever program you invest in, you must have the necessities. While these basic features may seem a bit broad, let's refine them into small sub-features. For instance, you'll want to automate recurring billing and tracking with AR. But you'll also want suppliers to save payment information for fast and straightforward payments. Your payment operations solutions should feature the following: Partial payments acceptance Allow buyers to pay several invoices at one time Automate cash application, reporting, revenue recognition and reconciliation of payments Access reduced transaction fees with credit and debit card processing rates Take payments securely over the phone using a virtual terminal Accept invoices in multiple currencies Support e-commerce operators 2. Determine Usability Test the usability of the product on the customer and staff sides. In this scenario planning, the process is proactive, with a minimal learning curve. User-friendly interfaces and processes, such as integrating a "checkout now" feature for fast checkout, can support streamlining your payment processes. It's often easier to understand the usability of a particular integration with a product demo. That's because seeing how the system works firsthand makes all the difference. 3. Notify Users When you find the ideal solution, notify users of the upcoming change. You'll also want to notify customers that a change in your system may impact their user experience. If you are integrating a new system and not replacing a current one, make sure you offer how-to materials and forums to ensure your customers don't experience issues with automated payment operations. They should understand how to use your system with minimal instruction if they have done their digital transformation. Provide training courses and materials for your employees and post how-to videos on your website and social media channels.  4. Test To Optimize Data Security Test your integration to make sure everything works properly. Customizations are typically tested and debugged in a sandboxed environment, but you'll always want to try live testing to ensure processes are working efficiently. Also, track payment data to further optimize your payment operations security. Likewise, compliance with data regulations will require data security features your automation solution must offer. Stay Compliant With Vena  At Vena, we focus on developing solutions that make payment operation tasks simpler and easier to do at scale. We work to streamline the reconciliation process, deliver alerts when specific payments come through and create workflows to manage customer service inquiries as well as other inquiries. See why companies love our user experience. Excel at Payment Operations Initiate transactions, ensure timely AR and AP payments and streamline AR processes using Vena's payment operations automation tools. .

Any new business or established company aims to increase revenue and expand its customer base. That’s all but impossible to do without a comprehensive understanding of your sales pipeline data. With the available sales pipeline technologies, it’s also possible to have a surplus of data. This makes it difficult to distill the important data and act accordingly. Gaining insight into your sales pipeline pinpoints weaknesses while underscoring pipeline strengths. Instead, you can strategically monitor these five sales pipeline metrics to improve lead conversions and reach new markets. 💡Key Takeaways: Any successful Customer Relationship Management (CRM) system provides insights into a business’s sales pipeline—but an information overload can be unwieldy. Instead, focus on the sales metrics important to your industry and particular business. Your sales pipeline should track leads through the sales process, from generation to conversion. Collecting data from each step (as relevant to your business) allows you to allocate resources to the areas most in need of improvement. Change your strategy from one of reactivity to proactivity. When you know your customer pain points, you can implement a business response and marketing strategy addressing the issues. What Are Sales Pipeline Metrics? To understand your business’s health, you must understand the sales pipeline in all its complexities. But you can’t get the information from one metric alone.   Instead, business analytics professionals need to identify and track data around their key performance indicators. The more advanced your CRM platform, the easier it is to determine what causes some leads to convert and drives others to a competitor. You can analyze your sales pipeline to reach sales targets—or maintain current goals. Source: method You can predict revenue, anticipate lead conversion and plan for market expansion by tracking key indicators. Tracking metrics also: Allocates resources to improving your worst-performing metrics Develops an advertising strategy that highlights how you’ve improved those metrics Provides training to staff members who contribute to the data of key metrics 5 Sales Pipeline Metrics To Monitor Don’t try to manage all metrics at once—it’s difficult to devote enough resources to fixing one problem when you spread yourself among multiple issues. A more effective approach targets the metrics important to your particular business and industry as a whole. 1. Customer Acquisition Cost (CAC) The customer acquisition cost (CAC) measures the time and expense of gaining a new customer. Even though this customer likely brings in new revenue, the expense required to attract and cultivate the relationship offsets that revenue. Factors to evaluate include: Marketing expenses Advertising expenses Employee costs (e.g. salaries, commissions and salaries) A “good” cost depends on your industry and product. The lower the cost, the more efficient the pipeline. If your CAC is too high, consider analyzing the efficiency of marketing staff or devoting more time only to those potential customers most likely to convert. 2. CAC Payback Period After determining your business’s CAC, the next step is to determine how long it takes to regain the expenses of new customer acquisition. This metric establishes your company’s baseline profitability by highlighting the point at which the customer turns a profit. Knowing the average period allows you to plan for a predictable and consistent income. For some SaaS companies, a CAC payback period of 12 months or shorter is preferable. But as with your sales pipeline metrics, the most acceptable timeline depends on your business. FREE Revenue Projection Template for Excel Plan your revenue, quantity of units sold and cost of sales for all of your products. 3. Opportunity Cohorts Each point in your sales pipeline plays a designated role. How do you know at which points leads convert to customers? Through an opportunity cohort.  This sales pipeline metric tracks the frequency at which a lead becomes a customer at each step of your pipeline. Analyzing this metric requires software that measures leads and sales as a function of time. A quality CRM program can determine the conversion rate at any point.  However, you can determine this by hand with the following formula: (Total Conversions / Total Leads) x 100 An opportunity cohort may convert based on: Type of business  How you define each point in the sales pipeline The amount of effort dedicated to each stage  4. Average Sales Cycle Similar to the opportunity cohort metric—which groups customers by the point at which they convert—the average sales cycle tracks the time required for a sale to close. Source: SuperOffice Tracking this metric will reveal when you can expect to earn revenue. With this point in mind, you can forecast more efficiently and accurately. For example, one study estimates that the average sales cycle length for businesses in the SaaS industry is 84 days. You can improve your average sales cycle by: Developing marketing content that communicates the benefit of hiring your company Reducing your free trial period to encourage leads to convert  Determining the points in your sales pipeline at which users experience the most frustration To determine your average sales cycle, divide the total days in your tracking period by the number of sales closed. 5. Pipeline by Sales Rep You don’t have a sales pipeline without sales representatives. Tracking total sales or negotiations by sales rep illustrates the effectiveness of each rep.  To calculate pipeline by sales rep, first determine the conversion rate at each point in the pipeline for each sales rep. Then, calculate the average at each point for your company. This will underscore those reps falling behind and highlight the most successful ones.  Compare the insights gleaned from each set of employees to determine the type of training that would be most beneficial. For example, if a particular sales rep loses leads at the negotiation stage, they may be playing too much hardball. A session on negotiation tactics could be appropriate. Building a More Effective Sales Pipeline Harness the power of SaaS-oriented software that’s pre-configured to meet your unique analytics needs with Vena Complete Planning. Through our award-winning platform, you can integrate data sources into a single source of truth, use scenario planning to create multiple growth plans and gain total confidence with easily accessible metrics.

What are your company’s revenue goals? How do you achieve them? Undoubtedly, there’s some sort of sales process involved—as well as a team that drives it. But what drives them? How do you empower your team to meet the goals you’ve set out—and optimize your sales process along the way?  That’s where sales performance management (SPM) comes in. From the territories you map out and the quotas you define, to the incentives that drive your team to meet their goals at every stage, your sales performance management program ensures all of the pieces are in place to move sales forward. Driven by data, it lets you better plan, manage and analyze your sales program from start to finish.  To find out how to build the best SPM for your organization, start with the following: 1 What Is Sales Performance Management? 2 Why Is SPM Important? 3 What Are the Components of Sales Performance Management? 4 The Sales Performance Management Process 5 How To Manage Your Sales Pipeline 6 How To Manage Sales Territories and Segment Accounts 7 SPM Best Practices 8 Aligning Sales Enablement With Sales Planning and Forecasting What Is Sales Performance Management? The performance of your sales team is critical to the success of your business as a whole. Sales performance management (SPM) recognizes that, employing a data-driven approach to planning, managing and analyzing your sales process. In doing so, it helps you drive your sales team and gives leadership the insights they need to make the best decisions around future goals. In other words, SPM helps you make more informed, data-driven decisions, visualize how well your sales teams are meeting their targets and lets you stay agile in the face of change. In doing so it helps you move your entire organization towards its revenue goals. Why Is SPM Important? SPM lets you use data—from historical data to pipeline data—to determine the best sales territories, calculate appropriate quotas and optimize the sales process—all with the ultimate goal of maximizing sales and profitability. It can offer insight into the way you incentivize your sales team, enable your scenario modeling and future planning and provide insightful feedback that allows you to continually improve sales within your organization.  And, with the right SPM process and tools in place, SPM lets you do that with a clear line of sight and a single source of truth by which to track your progress. All of which puts you in a better position to meet your revenue and sales goals. Sales Performance Management With Vena Accelerate your sales performance management program with Vena.   What Are the Components of Sales Performance Management? Most sales performance management programs will incorporate three main components: sales planning, sales incentives and sales insights. Consider each in turn, as well as some of the elements that drive them: Sales Planning What markets are you looking to target? How can your sales team best meet their needs?  Sales planning starts with questions like these, as you segment your accounts, set your sales targets and align your team. An offshoot of your revenue planning—which helps determine revenue expectations and create goals around them—your sales planning allows you to align your sales team and processes in a way that makes those revenue goals possible.  A couple of key elements of the sales planning stage include: Quota management and planning: Quota management and planning allows you to set the right quotas for your sales team. That is, quotas that will motivate your reps and align their goals with your business objectives and strategy. It draws on historical and pipeline data to do so, as well as top-level revenue targets—optimizing quotas over time, tracking key metrics and using the insights you achieve to make sure you have the best plan in place. Territory planning: Sales territory planning enables you to map out your sales territories for maximum impact, ensuring that you’re targeting the best leads. Segment and historical data helps you map your territories out in the best way possible for your business and assign the right sales representatives based on their experience, strengths and weaknesses, as well as the sales potential of the territory in question. Capacity planning: Once you have your revenue targets and territories set, capacity planning lets you know whether you need any additional sales staff to meet those goals. Is the sales team you have in place able to bring in the revenue you’ve targeted or do you need additional sales reps to help?  Sales Incentives Most organizations motivate their sales team in some way to help inspire them to meet their quotas. Bonuses, commissions and other incentives—paid out when targets are met—can give reps the extra boost they need. How you structure those incentives will depend on your organization and team. Key parts of your Sales Incentives program include: Incentive Compensation Management: Incentive compensation management draws on ongoing sales and revenue data to help you determine the right incentives to motivate your sales reps. When aligned with your business goals, it tracks how close your team members are to reaching their overall quotas, while letting you visualize how everyone is contributing to your overall company objectives. (More on this later!) Gamification: A sense of competition can be a strong motivator for your sales team, which is why many organizations use gamification as a driver within their sales programs. By offering sales reps opportunities to win prizes or to earn first place on the leaderboard, gamification can give them an extra reason to succeed.    Sales Insights Through constant measurement and ongoing analysis of your sales program, organizations can continue to optimize and update the processes, levers and teams in place to improve results. Your Sales Insights may include: Advanced analytics: The better data you have and the more you’re able to put it to work, the more information you can glean on how to make your sales program better. By choosing the right metrics and keeping track of sales trends, advanced sales analytics help you create specific objectives for every member of your sales team and ensure you have all of the best targets in place to meet your company goals. Sales forecasting: Once you’ve planned out your territories and understand their sales potential, a sales forecast gives your entire sales and operations team something to plan against—letting you keep on top of future needs.  Sales Planning With Vena Learn how to make sales planning easier with Vena.   The Sales Performance Management Process Sales performance management takes the mystery out of sales, giving your sales team clear goals to strive for, the right motivation to get there and whatever resources they need to achieve their objectives along the way. In doing so, it lets your entire sales team work together to help your organization meet and exceed its revenue goals.  But how do all of those different elements come together into a cohesive SPM process? And what kind of team do you need to move that process along? Here’s a step-by-step guide: Step 1: Sales and Revenue Management The SPM process starts by looking ahead, to predict projected sales growth and consider the territories or markets that will help you meet your goals and/or expand your reach. Sales forecasting and advanced analytics will help you get a more precise view, to better inform the decisions ahead. Step 2: Territory and Quota Management Next up: defining your territories and setting the sales quotas that will maximize the potential for each. This step will ensure you’re putting your sales reps in the best possible position to meet their targets successfully. Step 3: Workforce Management and Capacity Planning Now that you’ve figured out your territories—maybe determining additional potential in one or deciding to move into new territories altogether—it’s time to make sure you have the right team to back those plans up, including the roles below: Step 4: Incentive Compensation Management At this point you’ve built your territories and paired them with the right sales team and quotas. Motivating that team to meet their targets, though, is where your incentive compensation management (ICM) program comes into play. By incentivizing their success, you put your sales team on the right path to meeting their targets. Step 5: Profitability Management It’s time for more analysis—to look at how the decisions you made affected your overall profitability and what more you can do to better meet and/or improve on your revenue goals. Which means, once you’re done, starting up with step one again, to take another look forward and set new goals. How To Manage Your Sales Pipeline  To help visualize every step of the sales journey, organizations turn to their sales pipeline. Your pipeline follows the stages you use to lead someone through that journey so that you can better understand the steps needed to make that happen and ensure you have enough leads to make your ultimate goals.  Here’s an example of what your sales pipeline might look like: A strong sales pipeline stands at the heart of every sales program. Building out yours takes a combination of recent sales data, an understanding of your audience and sales territories and a process that works for both. Consider each in turn:   Data An analysis of your recent and historical sales data will give you valuable insight into the types of conversion rates your sales teams achieve, your average deal size, velocity, actuals versus forecasted results and stage conversions. Together, these allow you to better predict future needs and build out targets and goals at every stage of the pipeline so that you always have enough leads flowing through to accomplish your ultimate objectives. Audience A clear understanding of your target audience allows you to better understand where to source new leads and how to identify a solid lead once you find it. That insight, in turn, will allow you to build out the best sales territories to meet your objectives, determine the best sales reps for each and align quotas according to each territory’s potential. (We’ll dive more into sales territories in the next section.) Process An established sales process will provide your sales reps with a framework to help them make their quotas and reach your sales goals faster. Training, clear selling points and differentiators from your competitors will help back that up. Measure the results of your process and keep a close track of your sales pipeline to see how prospects are moving through each stage. By doing so, you can continue to optimize both your process and pipeline to get the best results.  Your pipeline helps you make better decisions and ensures your team is taking every action possible to move your best leads along. It’s a powerful tool in your SPM program.  Find out how to build a sales pipeline that empowers your business goals. How To Manage Sales Territories and Segment Accounts  Territory planning is also critical to any sales program. After all, how you segment your accounts will play a large role in the potential of your sales pipeline and how well your sales team manages the leads you have.  To manage your sales territories effectively and to segment your accounts for the best results, there are a few do’s and don’ts you should understand first: Do Align Your Territories With Your Goals Before planning out your territories, thoroughly understand your organizational goals. Are you looking to explore new territories or expand on those you already have? Are there new products coming down the pipeline that will affect your overall target audience (and therefore the segments you sell to)? Are you looking to go more upmarket or explore a small business or midmarket solution instead of concentrating on enterprise? Decisions like these will affect your sales teams’ efforts—which means you want to keep them front of mind when you’re mapping out your territories and quotas. Don’t Get Stuck on the Status Quo Territories are usually based on geography, but can also be separated according to other criteria—from industry to customer type. So don’t just fall back into what’s always been done. Instead, determine what’s best for your team and goals. By thoughtfully planning out your territories, you set your sales team up for success—and put your organization on track to reaching its sales goals.  Do Recognize Your Biggest Sales Potential  Not all territories are created equal—and neither is every sales rep. Some account executives are simply more experienced, or better at their job, and your sales program will be more successful if you recognize their different strengths. To get the most out of your most promising territories, assign them to your most promising reps—and give them the quotas and incentives to inspire them to make the most of that potential.    Don’t Change Anything Without Careful Consideration First Before making major changes, though, understand your customer base. Look at sales data over time to understand what the sales trends are and what segments have the most growth potential. Analyze your current segments, identifying the strengths, weaknesses, opportunities and threats that exist in your current territories. Then make any changes thoughtfully—so that they’re decisive and iterative. Too much upset too often can make it more difficult for your sales team to develop relationships and accomplish their goals. With the right territories in place, though, you set your sales team up for success. Of course, there are other best practices you can also draw on to make your entire SPM program thrive. Let’s look at those next.  Learn how to segment your sales accounts using territory planning. SPM Best Practices A few best practices can help you achieve your best SPM results and ensure your program runs successfully and gets the best results. Keep these tactics in mind as you build out yours: 1. Make Everyone Part of the Process Quality communication is a mark of any good business process, and the same can be said for your SPM program. By keeping communication open between your sales leaders, reps and other team members, and by considering everyone’s ideas on how to make your program and processes better, you can better learn what’s working and what’s not. This will improve your decision-making abilities and help you make changes to your sales process along the way.    2. Stay Transparent Giving your entire sales team access to the numbers they need to keep track of their progress will let them see how well they’re meeting their goals and what still needs to be accomplished to get there. But more than that, letting them in on your sales management strategy and telling them why you’re focusing on specific products or markets will help them thrive as they do.  3. Align Your Incentives to Your Team Culture In order to use incentives to motivate your team, you first need to know what exactly motivates them. Are they ultra competitive? Some type of gamification may push them to come out ahead. Are they team driven? Team incentives that take into consideration every person who helps push a sale through could be the best bet. Just don’t forget your own organization’s code of ethics along the way. You want to inspire your team to meet their goals without losing sight of what your company stands for in the process. 4. Constantly Ask “What if?”  Scenario modeling and what-if analysis can be powerful tools for your sales leaders, helping them better understand whether or not you’re on track to meeting your targets, whether deals are likely to be made or not and if the right goals were set in the first place. But to effectively make scenario modeling an integral part of your SPM program, you first need software to support it. Which is where number five comes in ... 5. Embrace the Right Technology The right technology can help you keep track of your SPM program and measure its results. You’ll be able to see in real time how much progress your sales reps are making at meeting their targets, calculate incentives and understand where prospective deals are in the pipeline—and how likely they are to result in a sale. Your technology should let you keep track of sales data as it happens, turn that data into insights and look ahead for future planning—hopefully with the help of a sales dashboard that lets you visualize everything more clearly.  6. Don’t Stop Optimizing Your Efforts You don’t want to let your SPM program get stagnant. Markets change and your sales process needs to change with it—which means your SPM program should always be a work in progress. As you measure your results and analyze what you could be doing better, you’ll be able to identify new territories and markets worth exploring, sales reps that aren’t up to the task, quotas that are too high or too low and so on.  Of course, there’s another critical best practice: making sure your sales enablement efforts align with your sales planning and forecasting. By doing so, your sales team becomes better prepared to take on whatever goals and challenges they’re set to face next.  Incentive Compensation Management With Vena Empower your ICM program with Vena.  Aligning Sales Enablement With Sales Planning and Forecasting By enabling your team with the content, training and processes they need to move prospective customers through the sales pipeline, you make it easier for them to reach their quotas—and, in turn, make it possible to meet your organization’s revenue goals. But all sales enablement programs aren’t the same. The best ones are aligned with your entire SPM program—starting with sales planning and forecasting. To make sure yours is fully aligned, start with the following: 1. Consider Your Future Goals Dropping your future plans on your sales team without any preparation isn’t going to help them achieve their best results—or get you to your sales goals quickly. Introducing new goals, products or markets can come with a learning curve. That’s why it’s important to give your team the time and resources they need to get through it. As soon as you understand your future goals, design and build out an enablement plan that will put your team on track to achieve it—including any training or content they need and plenty of time to absorb it.  2. Don’t Stop With Your Sales Team Enabling your sales team is just the start. Marketing needs to be pursuing the same goals as sales so that they can assist them in the best way they can. Your customer success team has to understand your sales initiatives so they’ll be ready to support the new customers you sign. And everyone from strategy to your product team should be ready to support your efforts, ensuring that everyone is working towards the same objectives. That might mean expanding your enablement goals beyond sales to include other key teams as well. 3. Keep the Training Coming Sales training should be a regular part of your enablement process. That means it should never stop. Training on new products will get your reps up to speed and ready to sell. One-on-one coaching and call shadowing can help new sales reps pick up your process and learn more about your market. And a virtual sales enablement platform can let your sales team stay up to date on any new services, processes or content you have available to them. Together, this kind of training can empower your entire sales team to meet their goals and keep moving your organization forward.  Learn how forecasting can help you align your sales and operations goals. Developing the Right Sales Incentive Plans  Another piece to the SPM puzzle? Your sales incentives.  When done right, your incentive compensation management (ICM) program will motivate your sales team to move leads through the sales pipeline and meet their quotas—ultimately helping you achieve your business goals and better financial results. But there are several different types of ICM programs to choose from and not all will be right for your business. The trick is to choose the program (or programs) that best meets your needs as well as your organizational culture: Sales commissions offer your sales associates set sums at specified times of the year based on the targets they’ve met. Spot awards are usually paid spontaneously after the completion of a project or task. Sales Performance Incentive Funds help drive short-term sales, often when inventory needs to be cleared or specific products aren’t selling well.  Annual incentive plans are often tied to your performance review cycle, rewarding employees for accomplishing a specified list of goals. Team incentive plans are tied to the performance of a team and usually used when a cohesive group effort is required. Management incentive plans motivate managers and might be organized around a pay-for-performance model, stock options or gain sharing. By drawing on ongoing sales and revenue data, an ICM program can help you determine just the right incentives to spur your sales reps on, while tracking how close they are to reaching their goals. And by giving sales reps visibility into their progress and letting everyone view changes as they happen, the best ICM programs offer a clear line of sight throughout the entire process. They also measure the effectiveness of your incentives to ensure they’re contributing to your overall SPM objectives.   Find out how to build an incentive compensation strategy that will motivate your team. What Are the Most Important SPM Metrics?  As with most modern business processes, SPM relies on measurement to keep performance on track. The sales metrics you follow will help you make better decisions as you continue to drive sales and profits forward. Here are some of the most critical metrics for sales performance: 1. Average Deal Size Understanding your average deal size—calculated by dividing your total number of deals by the total dollar amount they represent—can help you understand the potential of new deals in the pipeline as well as the risk they represent. It also lets you track changes you want to make to your target audience and market. Large deals that exceed your average deal size, for instance, may seem like an excellent opportunity but are also more likely to fall through—making it more difficult for a sales rep to make their quota. By comparing the opportunity to your average deal size, you’ll recognize that risk early on. On the other hand, if you’re purposely looking to land larger deals, you can use your average deal size as a way to track that goal. 2. Quota Attainment Quota attainment can be a useful metric in determining the successful implementation of your SPM program—telling you whether you’re setting the right goals, building the best team or mapping out the right territories. Tracking how many of your sales reps are meeting their quotas can help you evaluate whether those quotas are set too high or too low, whether territories are mapped out in the most effective way possible and whether you’re offering the right incentives to motivate reps to meet their goals.  3. Win Rate Your win rate—otherwise known as your conversion rate—looks at the percentage of leads that become actual sales. The win rate you’re able to accomplish will depend on your product, price and the market you’re selling in. Upmarket or higher-priced products, for example, often come with lower win rates.   Understanding your win rate will help you better feed your sales pipeline and determine how many leads you’ll need to accomplish your sales goals. It can also help you better visualize when sales are changing—if your sales team is achieving better sales results or the opposite—allowing you to identify any new challenges or market evolutions that might be affecting your results.     4. Revenue  Not surprisingly, revenue is a critical metric for any sales team. In fact, there are several revenue metrics that can help you determine the effectiveness of your sales team, including profit, the percentage of revenue attributed to new business, the percentage of revenue attributed to upsell and cross-sell and the percentage of revenue attributed to renewals. By examining metrics like these, you can better ascertain your sales team’s strengths and weaknesses, decide where to focus your energy and resources and calculate realistic growth goals—while making more accurate future predictions against them. 5. Sales Productivity To accomplish your sales goals effectively, it’s important that your team stays productive. That’s where sales productivity metrics come in—helping you determine whether everyone on your sales team is putting in the work to make your targets happen. Popular sales productivity metrics include percentage of time spent selling, percentage of marketing collateral used by sales reps and percentage of leads being pursued. Overall, a successful Sales performance management program can help make the difference between sales success and failure. Which means getting it right is critical to your business. Keeping it running smoothly will help ensure your business stays on track toward your revenue goals.  Sales Performance Management With Vena A Complete Planning Platform for Sales Performance Management Recap The Ultimate Guide to Sales Performance Management Sales performance management (SPM) uses a data-driven approach to planning, managing and analyzing your sales process—helping you drive your sales team and make the best decisions around future sales goals. The right sales pipeline helps visualize the process they take to move prospects through, ensuring there are enough leads at every step to meet ongoing sales targets. Territory planning and the quotas you set play a large role in how well your sales reps manage the leads making their way through the sales pipeline, while your incentive compensation management program helps incentivize your team to meet those quotas.  A variety of sales metrics—including revenue and sales productivity metrics—can help you track the success of your SPM program and optimize your decision making as you continue to drive sales and profits forward.  

Your salespeople don’t trust they’re compensated accurately—so your payroll administrators are occupied with resolving pay disputes. Your sales leadership isn’t accurately forecasting their team’s performance—so your company isn’t forecasting compensation expenses accurately. Your company isn’t tracking sales representative performance in real time—so your executives make decisions based on outdated information. Sound familiar? These problems happen when you and your team use incentive compensation templates that don’t drive results. So how can you implement your compensation strategy effectively, accelerate sales performance management and make smarter data-driven decisions? In this post, we’ll cover five best practices for creating incentive compensation templates that will help you get the most out of your incentive compensation strategy. 1. Establish a Single Source of Truth With Data Automation Ensure every user works with the latest numbers. This entails the centralization of incentive compensation data with data automation and incentive compensation templates that will automatically integrate your data sources, such as CRMs, ERPs and HRISs, and calculate complex compensation calculations. This removes tedious, manual and error-prone data consolidation to ensure your stakeholders work with the latest numbers. When your sales performance, accrued bonuses and expected earnings are available in real time, this means: Your salespeople will know what they’ll earn next paycheque and worry less about their compensation’s accuracy. Your company can use the most up-to-date numbers to forecast compensation with greater accuracy. 2. Implement Audits for Transparency and Fewer Disputes Gain trust from your salespeople in your incentive compensation reports with greater transparency. Without a clear and comprehensive view of sales compensation, your salespeople may focus more of their time calculating their own compensation rather than closing deals, which can plummet your sales performance. Your incentive compensation plan should track compensation and quota changes to minimize compensation disputes and eliminate shadow accounting. 3. Customize for Productivity Variables Consider how your company motivates and evaluates each salesperson’s performance. Which productivity quotas and metrics will align with their sales variables, fuel competitive spirit among your salespeople and maximize their productivity? These are some common metrics: Win rate Average deal size Percentage of new business Percentage of renewal Your incentive compensation plan should include a wide range of productivity quotas and metrics—to drive sales performance—as well as include criteria to categorize revenue. 4. Customize for Business Intelligence Align your salespeople’s productivity metrics with your company’s KPIs. For example, tracking sales by region can show how your company is performing in a new market, and tracking sales by product can show the success of a new release. The selection of these productivity quotas and metrics for your incentive compensation template can deliver valuable business intelligence to your company. Knowing your sales team’s performance—with more accurate estimates of commissions—will not only inform revenue planners to forecast with more precision, but also inform sales leadership to forecast commission expenses with greater accuracy. 5. Personalize for Security and Better Stakeholder Experience Give your stakeholders access only to the information that’s pertinent to them so they can trust that no one else can view their own sensitive data. Your incentive compensation template should filter overlays by these stakeholder levels: Payroll staff: To administer payments with greater accuracy. Individual salespeople: To view their own compensation and performance against their quotas and benchmarks. Managers and their team members: To view their team’s performance against dimensions and benchmarks to optimize performance. Executives: To make smarter, data-driven compensation decisions. Your Incentive Compensation Plan When your organization’s incentive compensation templates reflect your compensation plan, every stakeholder benefits. Your salespeople submit fewer pay disputes. Your sales leadership forecast performance, quotas attained and incentives paid with greater accuracy. Your payroll administrators aren’t overwhelmed with disputes and your executives have a clear view of company performance. Incentive Compensation Software Vena’s Incentive Compensation Management solution manages your entire compensation process. By improving payment accuracy and automating complex compensation calculations with unified data, your company can implement its compensation strategy to its full potential to accelerate sales performance management and make smarter data-driven compensation decisions. Get started with Vena's free payout and approval template below.  

Every member of your sales team has their own quotas and targets—and like a well-oiled machine, they work together to build towards your greater company goals. Sometimes, though, you need a little extra oil to grease the wheels and keep everyone moving in the right direction. For many sales teams, that means putting an incentive structure into place that will motivate your team and keep them on track to meeting their goals. That’s where incentive compensation management (ICM) comes into play. Your ICM strategy, whatever it looks like, should keep your sales team focused on meeting their quotas and ensure your overall organizational objectives remain attainable at the same time. To start planning your sales incentives, consider the following: 1 What Is Incentive Compensation Management? 2 Benefits of an ICM Strategy 3 Types of Sales Incentive Compensation Plans 4 Putting Your Incentive Compensation Plan Into Action   What Is Incentive Compensation Management? By drawing on ongoing sales and revenue data, a well-managed incentive compensation management program can help you determine just the right incentives to spur your sales reps on. It tracks how close they are to reaching their overall quotas and any goals along the way. It also lets you visualize how everyone is contributing to your overall company objectives. To get the most out of your incentive plans, you’ll want to align them with your business goals—especially those that most contribute to your company’s financial success. By aligning targets to goals your entire company comes out ahead.  But just as importantly, the best ICM programs provide clarity along the way—not just by giving sales reps visibility into their progress, but by letting everyone view changes to your incentive plans as they happen so that they have a clear idea of what they’re trying to achieve. If your ICM program has sliding compensation rates that escalate with sales volumes, for instance, they can track that in real time—and continue achieving their best results. Of course, there are other benefits a well-implemented ICM program can accomplish as well. Benefits of an ICM Strategy When implemented well, with clear sightlines to the data and calculations, an ICM strategy can help you achieve a variety of benefits for your sales team and organization as a whole—starting with the following: 1. Better Financial Results Put simply, ICM programs can act as strong sales accelerators—and that has obvious financial results. By keeping your reps focused on sales performance and ensuring results are visible so that they can adjust and reprioritize their tactics and focus as required, you’re empowering your team to meet and exceed their sales quotas. That has repercussions on your organization’s revenue goals as a whole, building higher overall performance. 2. Improved Visibility Into Profitability While obviously a critical metric, sales aren’t the same as profit. There are costs along the way that will affect the profitability of your sales team. And the various products and services you sell will each have different net profit levels that go beyond their selling prices. Warehousing, advertising, labor and the expenses your reps accrue in the process of making a sale all factor in. A well-driven ICM program can help you identify your most profitable products and services, allowing you to set your targets appropriately to focus on the most profitable among them. Which leads us to number three ... 3. More Nuanced Incentives  The most effective ICM programs understand that not all sales are created equal—and will let you focus in whichever way you choose. Perhaps you want to prioritize specific product lines or services that you know earn the best profits, want to bring attention to a new addition to your offerings or hope to make better headway into certain markets. If those are more difficult sales for your reps to make, they aren’t likely to prioritize them without the right incentives. An ICM program can help you do that, allowing you to use different rules or incentives to prioritize certain markets and/or products and put your sales team’s attention where you want it to be. 4. Motivation for the Whole Team   While it may be most common to incentivize your core sales team, they’re not alone in making significant contributions to your overall sales. With a structured ICM program in place, you can start to identify the other team members who contribute significantly to sales, from business development reps (BDRs) to after-sales support—and determine whether the entire process would benefit if they too were rewarded with some kind of incentive structure. It can also help you split incentives fairly when multiple team members contribute to a single sale.   5. Optimization Opportunities You can also use your ICM program to get a clearer view of whether the territories and targets you have in place are effective in meeting your company objectives or are in need of improvement. Through a clear line of sight into current and past sales results and a view into ongoing metrics, you’ll be able to continually tweak your sales goals and ensure you’re offering the right incentives and sales commission rates to continue building toward your overall financial results.  6. A Way To Look Ahead Finally, with all of your data in one place and easy to analyze, an ICM program can help you look ahead, to determine whether you’re applying the right targets for your future growth goals. Tools such as predictive analytics can help as you determine the best ways to set quotas and incentivize your sales team, while scenario modeling can assist you in predicting future sales and determining how to optimize your results and maximize profitability. Types of Sales Incentive Plans Of course, there are different ways you can incentivize your sales team and different types of ICM programs you can use to help you do so. So start by determining the plan type (or combination of plan types) that will best meet your business needs and match your organizational culture.  Sales commissions are among the most common, offering lump sums to your sales team based on the targets that they’ve met. Spot awards tell an employee “job well done” and are usually paid shortly after the completion of a specific project or task. They’re more spontaneous (and often more frequent) than other types of plans—though they’re also usually smaller in terms of value. SPIFFs (Sales Performance Incentive Funds) help drive short-term sales and are often used when inventory needs to be cleared out or specific products aren’t selling well. Tied to a set time period—whether it’s days, weeks or months—SPIFFs are rewarded if reps meet certain targets during the time allotted.  Annual incentive plans are often tied to your performance review cycle, rewarding employees for accomplishing a set list of goals laid out for them at their last performance review. Team incentive plans tie incentives not to the performance of individual employees, but of teams. They’re usually used when a cohesive group effort is required to meet the goals set out. Project bonuses are tied to specific projects and are paid out when a project is completed successfully and on deadline. Management incentive plans are meant to motivate managers and to help align their performance with company goals. They could be organized around a pay-for-performance model that offers pay rates based on performance or may come in the form of stock options or gain sharing instead. Profit-sharing plans offer your team members a share of your company’s yearly profits, investing employees in overall business success.   Putting Your Sales Compensation Plan Into Action Once you have a sense of the goals you want to achieve and the type of sales incentive plan(s) you want to put into action, a few other things will help you keep your ICM program on track and build your sales momentum.  Communicating Your Plan No incentive plan is going to get far if you don’t communicate it properly—which means getting the word out is critical to its success. That starts by clearly outlining performance goals to individual sales reps so that they know exactly what they need to do to get rewarded and what the incentive structure looks like. It also means communicating your larger company goals so that they know what they’re contributing to and what their part is. Choosing the Right Technology A spreadsheet-based ICM program can be cumbersome and time consuming, making it difficult to track your goals, keep a clear line of visibility into incentive calculations and bring in data from disparate sources. With the right technology in place, you can help save sales managers’ and administrators’ time while empowering your sales team with dashboards that offer the real-time insights they need to keep track of their targets and incentives. Leadership, too, can easily track overall sales goals to see how they’re keeping up with company objectives. Measuring Your Plan Measurement is a key component of any incentive plan. After all, if you don’t measure performance, it’s going to be hard to reward it. Also key is measuring how well your incentive plan is working so that you can understand what really motivates your team and make changes as necessary for best results. Maintaining accurate data on how your reps are faring and how their accomplishments are adding to your overall company objectives is key to your plan’s success. With the right ICM program in place, you can build a more effective sales team and create a clear line of sight into how they’re achieving their goals—motivating your team and putting everyone on the path to success.  Vena’s Incentive Compensation Management Software Find out how you can better manage your ICM program.

Sales don’t just come to you. At least not as often as you’d like if you want to meet your targets.  Your sales and marketing teams need to go out and find them. To identify leads and qualify them. To let prospective customers know why they need a product or service like yours. There are calls to make and proposals to send and eventually, in some cases, deals to close. Then it’s all about keeping customers happy so that they stick around long after the contract is signed. Organizations rely on their sales pipeline to visualize all of those leads and prospects and keep the entire process moving. Getting it right, though, relies on strong pipeline management to ensure there are always enough leads at every stage to meet your sales quotas. With that in mind, consider: 1 What is a sales pipeline? 2 Stages of a sales pipeline 3 5 steps to building a successful sales pipeline 4 Managing your pipeline What Is a Sales Pipeline? Chances are, even if you aren’t in sales, you’ve heard of a “sales pipeline.” And for those that are in sales, you know how important a tool it is. Your sales pipeline helps you visualize the journey you take prospective buyers through on their way from initial brand awareness to final sale and further on, to retention. For example, a sample sales pipeline may look something like this: The sales pipeline is often confused with the sales funnel—but while both have important roles to fill, the two actually take different perspectives. While the pipeline looks at the sales journey from your own organizational perspective—the stages you follow to build a sale—the sales funnel represents the journey from the prospect’s perspective instead. How do they get to the purchasing decision and what can you do to facilitate each stage? A sales funnel example, then, might look something like this: While good sales pipeline management relies on an understanding of your sales funnel, building a successful pipeline also requires an understanding of your own sales goals, territories and Ideal Buyer Profile—as well as a clear idea of how leads funnel through your sales process from beginning to end.  To make your sales quotas possible, it pays to put the work and thought into building the right pipeline for you. Stages of a Sales Pipeline Before you start putting the steps in place to build out your sales pipeline, take a moment to revisit every stage along the way. Here’s a quick overview of what they might look like: Stage Description Prospect This stage is all about lead generation. That means finding prospects that meet your Ideal Buyer Profile and building awareness and interest within that target market.  Qualified Lead A qualified lead is one that your team has identified as worth pursuing. To identify a lead as “qualified,” you’ll want some kind of program in place that allows you to score leads or determine what makes up a quality lead. Sales Call The sales call, or calls, may not be a call at all—maybe it’s an email or in-person meeting (or a combination of all three). Either way, it’s when your sales team initiates contact in order to further determine the quality of a lead and answer any questions to determine specific needs. It’s also where the prospect gets an in-depth look at what it is you’re selling. Proposal This is where you get down to the details. At this point, you’ll send a proposal and pricing quote to the prospect, to discuss the specific terms of sale.  Closed Sale Finally, any last-minute negotiations are taken care of and the sale is closed, converting the prospect into a customer. Retained Customer But of course, closing the sale is just the start. Retaining the customer is just as important if you want to continue building revenue. That makes retention an important (but often overlooked) stage of the sales pipeline. Not surprisingly, the prospective revenue represented in your pipeline will decrease the further you move through it, as leads fall out and prospects go cold. Ensuring you have the pipeline coverage you need to make your revenue goals takes a steady flow of leads at every stage. For that to work, you need a solid sales pipeline management process that will take prospects from beginning to end and ensure there are always enough leads to follow. It’s time to get to work building that sales pipeline.  6 Steps To Building a Successful Sales Pipeline Building a successful sales management plan means putting the steps in place to identify and nurture your leads and move them down the sales pipeline. For that to happen, you need to start with a strong sense of who your ideal customer is—that is, who needs your product and is likely to buy it—and to always look ahead at each stage of the pipeline and how it affects the others.  With that in mind, the following steps will help you build a strong sales pipeline: 1. Look Back To Look Ahead Look back over the trajectory of your most recent sales to better understand your historical conversions, average deal size, velocity, actuals versus forecasted results and stage conversions. How did you calculate previous targets and where did you land? This can help you build out your targets and goals, helping to guide your sales pipeline going forward. 2. Identify Your Ideal Customer Using data you have on your current customers, along with your team’s market knowledge, create an Ideal Customer Profile. Understanding who exactly buys your product and who your target audience is will allow you to better understand where to source new leads and how to identify a solid lead once you find it. Using that Ideal Customer Profile to pave the way, begin to build out a list of target accounts—companies and prospective customers that would be a good fit with the products or services you sell. Identify the best contacts within each of those target accounts for your sales team to approach.    3. Segment Your Sales Territories Use those past results and Ideal Customer Profile to inform your sales territory planning in order to determine the best way to segment your target accounts. From there, build out the ultimate sales quotas your team will be working towards to accomplish your overall sales goals. 4. Build Out Your Process Provide your sales reps with a framework they can work with to guide prospects in their territories towards final sale. Having clear selling points and differentiators from your competitors will help—allowing your team to better sort opportunities based on need and demonstrate how your product or service stands out. Ongoing pipeline data can help iterate this process over time, for even better results.  5. Continue Adding Leads  Build an integrated effort between marketing and sales to ensure leads are always flowing into the pipeline and moving through each stage. This will also help you keep sales increasing over time. 6. Measure and Refine Continue to measure your results to see how leads are maturing through your sales pipeline and whether you need to tweak your process or change your targets in order to achieve the overall goals you’ve set out. Evolve your Ideal Customer Profile as new trends emerge in the pipeline sales data and as market changes occur in order to recognize new opportunities that pop up. It’ll probably take some time to get every stage of your process right, as well as constant adjustments to keep up with new opportunities and goals. Managing Your Pipeline A healthy pipeline is critical to your sales success, so understanding exactly how yours works and how to keep leads flowing into sales is a key part of any sales team’s role. As is juggling those leads and managing leads at different stages, to continue moving them through your pipeline. The right technology can also help as you manage those leads, prioritize the best ones and update the sales pipeline over time, to ensure it’s as efficient as possible.  Just remember—your sales pipeline is a constant work in progress. Measure its effectiveness and make changes when necessary to keep leads flowing. The ultimate objective is to support your sales team and to build towards your goals—not to create a static pipeline that never needs to change. Find out more about how Vena can help your sales team with our sales performance management solutions.