What’s On Your Dashboard For Tracking Sales Performance? Top 10 Metrics for Effective SPM Jim Lazarz Former AVP of Compensation, CUNA Mutual Group Lazarz Consulting

Agenda Value Proposition of Sales Performance Software Profitable Revenue Growth Model Top 10 Metrics Revenue / Expense Profit / Product Mix Data is King Sample TrueAnalytics Metrics

Value Proposition of Sales Performance Software

Profitable Revenue Growth Model

Top 10 Metrics

Revenue / Expense

Profit / Product Mix

Data is King

Sample TrueAnalytics Metrics

The Sales Performance Challenge Increasing Profitable Revenue Growth through Better Management of the Sales Channel

Increasing

Profitable Revenue Growth

through Better Management

of the Sales Channel

Sales Performance Software Suite EIM Dispute Resolution Quota Management Territory Management Analytics

Value Proposition of SPM Software Accuracy an Timeliness of Payments Lower Administrative Costs Better Reporting Lower Technology Costs More Nimble Administration of New Plans Faster to Market Better Management of Sales Plans and Producers

Accuracy an Timeliness of Payments

Lower Administrative Costs

Better Reporting

Lower Technology Costs

More Nimble Administration of New Plans

Faster to Market

Better Management of Sales Plans and Producers

Hidden Treasure of SPM... Robust Data for Analysis of: Incentive Plans Producers Sales Channels Revenue Results

Robust Data for Analysis of:

Incentive Plans

Producers

Sales Channels

Revenue Results

Data Drives Analytics Timely and Trusted Data Provides Information Through Metrics Actionable Metrics Drive Strategic and Tactical Sales Decisions Timely Decisions Drive Increased Sales Performance Sale Performance Leads to Greater Revenue and Profit

Timely and Trusted Data Provides Information Through Metrics

Actionable Metrics Drive Strategic and Tactical Sales Decisions

Timely Decisions Drive Increased Sales Performance

Sale Performance Leads to Greater Revenue and Profit

Profitable Revenue Growth Model Driving Profitable Revenue Growth Manage Product Mix & Profit Margins Enhance Total Sales Revenue Control Sales Expenses (& Incentives) Sales P&L

Driving Profitable Revenue Growth

Revenue and Cost: The Starting Point Driving New Revenue Controlling Sales Division Costs Sale’s Divisions P&L Incentive Pay a Leading Expense Factor

Driving New Revenue

Controlling Sales Division Costs

Sale’s Divisions P&L

Incentive Pay a Leading Expense Factor

Most Critical Sales Metric Metric #1: Total Sales Spend to Total Revenue Reflects overall efficiency of Sales Division Includes all types of Sales expenses Audience: Sales and Finance leadership

Metric #1:

Total Sales Spend to Total Revenue

Reflects overall efficiency of Sales Division

Includes all types of Sales expenses

Audience: Sales and Finance leadership

Secondary Sales/Spend Metrics Metric #2 Incentive Spend to Total Quota Achieved Total Incentive should match total quota Uncovers problems with quota setting or incentive plan design Audience: Sales leaders and Comp Design professionals

Metric #2

Incentive Spend to Total Quota Achieved

Total Incentive should match total quota

Uncovers problems with quota setting or incentive plan design

Audience: Sales leaders and Comp Design professionals

Secondary Sales/Spend Metrics Metric #3 Individual Incentive Earnings to Individual Quota Achieved Shows how well incentives pay for sales Distribution of earnings to quota should make sense Identifies poor incentive design (ramp-up) Audience: Sales leaders and Comp Design professionals

Metric #3

Individual Incentive Earnings to

Individual Quota Achieved

Shows how well incentives pay for sales

Distribution of earnings to quota should make sense

Identifies poor incentive design (ramp-up)

Audience: Sales leaders and Comp Design professionals

Secondary Sales/Spend Metrics Metric #4 % of Quota Achieved by Region Shows regional differences against quota Highlights problems with quota setting, seller’s performance, or marketing strategy Audience: Sales and Marketing leaders

Metric #4

% of Quota Achieved by Region

Shows regional differences against quota

Highlights problems with quota setting, seller’s performance, or marketing strategy

Audience: Sales and Marketing leaders

Secondary Sales/Spend Metrics Metric #5 % of Quota Achieved by Market Segment Indicates market segment response to product design, pricing, promotion, etc. Highlights misappropriation of quota Audience: Sales, Marketing and Product Management leaders

Metric #5

% of Quota Achieved by Market Segment

Indicates market segment response to product design, pricing, promotion, etc.

Highlights misappropriation of quota

Audience: Sales, Marketing and Product Management leaders

Secondary Sales/Spend Metrics Metric #6 Sales Rep Expenses to Territory Revenue Shows how effectively a rep is producing revenue Indicates poor territory design, poor decisions on discretionary spend Audience: Sales leaders and Financial Analysts

Metric #6

Sales Rep Expenses to Territory Revenue

Shows how effectively a rep is producing revenue

Indicates poor territory design, poor decisions on discretionary spend

Audience: Sales leaders and Financial Analysts

Profit (and Product Mix): The Rest of the Profitable Sales Growth Equation Revenue and costs are only 2/3 of the story Profit is largely determined by product margins and product mix

Revenue and costs are only 2/3 of the story

Profit is largely determined by product margins and product mix

Most Critical Profit Metric Metric # 7 Profit as Percent of Revenue by Product Measures overall profit margins by product Highlights pricing decisions, discounting and price realization in the marketplace Monitors profit margins against plan Audience: Sales, Finance & Product Management Executives

Metric # 7

Profit as Percent of Revenue by Product

Measures overall profit margins by product

Highlights pricing decisions, discounting and price realization in the marketplace

Monitors profit margins against plan

Audience: Sales, Finance & Product Management Executives

Secondary Profit/Mix Metrics Metric #8 % of List Price Achieved by Product Highlights problem with product pricing Identifies excessive discounting by sale reps Must balance competitive pricing to discounting to achieve quota Audience: Sales and Product leaders

Metric #8

% of List Price Achieved by Product

Highlights problem with product pricing

Identifies excessive discounting by sale reps

Must balance competitive pricing to discounting to achieve quota

Audience: Sales and Product leaders

Secondary Profit/Mix Metrics Metric #9 % of List Price Achieved by Sales Rep Shows profit margins by territory Identifies sales reps who discount excessively Audience: Sales Managers

Metric #9

% of List Price Achieved by Sales Rep

Shows profit margins by territory

Identifies sales reps who discount excessively

Audience: Sales Managers

Secondary Profit/Mix Metrics Metric #10 Product Mix Compared to Sales Plan Margins vary by product Product mix critical to overall profit Identifies product mix variations from plan Audience: Sales, Finance, Product and Comp Design leaders

Metric #10

Product Mix Compared to Sales Plan

Margins vary by product

Product mix critical to overall profit

Identifies product mix variations from plan

Audience: Sales, Finance, Product and Comp Design leaders

Secondary Profit/Mix Metrics Metric #11 Product Mix Achieved by Sales Rep Identifies which reps are selling a product mix different from plan Territory differences or bad quotas may be to blame Audience: Sales Managers

Metric #11

Product Mix Achieved by Sales Rep

Identifies which reps are selling a product mix different from plan

Territory differences or bad quotas may be to blame

Audience: Sales Managers

Key to SP Metrics: Quality Data Accurate Complete Timely Fact-Based Trusted

Accurate

Complete

Timely

Fact-Based

Trusted

But…. Most organizations lack data for analysis 80% of Sales Organizations will face data quality issues (Gartner) “ The inability to quickly access insightful data prevents us from making mid-course corrections…by the time we have the data out and analyzed , it is three months old”…Global High Tech Manufacturer

Most organizations lack data for analysis

80% of Sales Organizations will face data quality issues (Gartner)

“ The inability to quickly access insightful data prevents us from making mid-course corrections…by the time we have the data out and analyzed , it is three months old”…Global High Tech Manufacturer

Barriers to SP Data Scarcity of Compensation and Sales Data What’s been sold Where Quota attainment Product mix Price realization Consolidating data from spreadsheets or multiple comp systems

Scarcity of Compensation and Sales Data

What’s been sold

Where

Quota attainment

Product mix

Price realization

Consolidating data from spreadsheets or multiple comp systems

SPM Software to the Rescue Complete, Timely and Trusted Data Reflects what Has Really Happened A Single Version of the Truth!

Complete, Timely and Trusted Data

Reflects what Has Really Happened

A Single Version of the Truth!

Using the Data: Analytics Great Data Just the Start Powerful Analytical Tools Create Information & Knowledge Knowledge Drives Insight into Opportunities and Risk Metrics become Actionable…and Sales Performance is Enhanced

Great Data Just the Start

Powerful Analytical Tools Create Information & Knowledge

Knowledge Drives Insight into Opportunities and Risk

Metrics become Actionable…and Sales Performance is Enhanced

Summary Timely Strategic and Tactical Decisions Timely Decisions Achieve SPM Provides Timely, Trusted Data…. Trusted Data Delivers Actionable Metrics… Actionable Metrics Drive Greater Sales Performance

Timely Strategic and Tactical Decisions

Timely Decisions Achieve SPM Provides Timely, Trusted Data….

Trusted Data Delivers Actionable Metrics…

Actionable Metrics Drive Greater Sales Performance