USING REVENUE FORECASTING INNOVATION AND PREDICTIVE ANALYTICS TO DRIVE GROWTH AND PRODUCTIVITY IMPROVEMENT

Transcription

1 USING REVENUE FORECASTING INNOVATION AND PREDICTIVE ANALYTICS TO DRIVE GROWTH AND PRODUCTIVITY IMPROVEMENT 1

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3 3 Adapt or die. Billy Beane General Manager Oakland Athletics

4 4 Productivity A measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.

5 5 48% of sales rep s fail to hit their target Off Target 48% On Target 52% Source: RPMG Revenue Performance Index 2011

6 6 Opportunity for Improvement? Sales that fail to close as forecasted = 88% Leads generated not followed up by sales = 68% Actual selling time by sales people = 31%

7 7 Every major step in the process is in trouble % of leads resulting in meetings / appointments % of meetings leading to presentations/proposals % of proposals / offers resulting in closed sales

8 8 End-To-End Sales Closure Rate now = 2.4% 4.0% 3.7% 3.5% 3.0% 2.4% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Source: RPMG Revenue Performance Index

9 9 Revenue creation use to be simple and linear Marketing Awareness Traditional Sales Process Opportunities

10 Buyers have now moved to new buying channels. Sellers have not. Internet-driven changes in B2B buyer behavior Your buyers go to the web to research business solutions... long before they will talk to your sales rep! 10 Marketing Leads The marketing-to-sales Black Hole +40% of your good prospects are lost or mismanaged in this process gap Opportunities Truncated Sales Process Leakage

11 11 How to fuel sales growth more feet on the street! Increase >20% 10% Increase 11-20% 27% Increase <10% No Change 15% 45% Decrease 3% 0% 20% 40% 60%

12 12 3,000 Response To Declining Sales 2,500 2,000 1,500 1, CRM Training

13 13 CEO confidence in effectiveness and direction of marketing Yes - 17% No - 83%

14 14 Customer buying processes have evolved in our world of ubiquitous, instant, global communications. But companies selling process have, for the most part, remained anchored in the dark ages. Fred Hassan CEO, Schering Plough

15 15 The Finance function has always had three essential duties in any organization: 1 Create effective and efficient financial operations 2 Leverage trusted information to understand the state of the business CFOs timeless and essential duties 3 Protect enterprise viability through careful cash and capital management

16 16 New dynamics put new pressures on Accountants Regulatory environment Higher levels of transparency New cybersecurity / information security regulations Focus on corporate governance 75% of security breaches are driven by financial motives (Verizon) Uncertainty and volatility Uneven economic recovery Growing shareholder expectations Changes to currency and financial institutions Globalization and demographic shifts...growth and job creation are still too weak. New risks are arising while several old risks remain. (IMF) Business model innovation Changing nature of transactions (e.g., mobile) Partnering for speed Growth in emerging markets Cash-rich balance sheets In the U.S., non-financial companies have a record $1.45 trillion in cash (Forbes)

17 The emergence of transformation forces are fundamentally changing how we live, work and interact and fueling an explosion of data a new economic asset that has become the basis of significant opportunity 17 Transformation forces New economic asset Pervasive connectivity Big data Sensors and devices Social We are here Percentage of uncertain data Mobile Analytics Cloud Social media VoIP Enterprise data

18 18 As a result, leaders are redefining their agendas and reprioritising investments 73% of CEOs are prioritizing investments in customer insights 82% of CMOs plan to increase the use of social media 70% of COOs identify supply chain visibility as the top challenge in delivering on their agendas? 74% of CIOs say mobile solutions are part of their vision for increasing competitiveness Finance Function s role?

19 19 While timeless responsibilities remain, Finance leaders are redefining imperatives and how they approach them 1 Create effective and efficient financial operations I Drive enterprise agility through enterprise integration 2 Leverage trusted information to understand the state of the business + II Help the business make better decisions by anticipating the future 3 Protect enterprise viability through careful cash and capital management III Lead business model innovation through a new discipline of performance

20 20 What input and throughput do you need, for the output you want? Strategy & Planning Marketing / Demand Generation Sales & Opportunity Management Account Mgt & Growth

21 21 Year 1 Year 2 A. Lead to Appointment (Top of Funnel) 35% 0% 35% B. Appointment to Offer (Mid- Funnel) 35% 0% 35% C. Offer to Close (BoAom of Funnel) 20% 0% 20% D. End- to- End Conversion (AxBxC) 2.45% 2.45% E. Sales $20,000,000 $20,000,000 F. Cost of Sales $13,200,000 $13,200,000 G. Gross Margin (E- F) $6,800,000 $6,800,000 Gross Margin % 34% 34% H. Overheads $5,800,000 $5,800,000 J. EBITDA (G- H) $1,000,000 $1,000, % 5.0% K. Value MulVple 4 4 L. ValuaVon (JxK) $4,000,000 $4,000,000 0%

22 22 Year 1 Year 2 A. Lead to Appointment (Top of Funnel) 35% 2% 37% B. Appointment to Offer (Mid- Funnel) 35% 2% 37% C. Offer to Close (BoAom of Funnel) 20% 2% 22% D. End- to- End Conversion (AxBxC) 2.45% 3.01% E. Sales $20,000,000 $24,586,122 F. Cost of Sales $13,200,000 $16,226,841 G. Gross Margin (E- F) $6,800,000 $8,359,282 Gross Margin % 34% 34% H. Overheads $5,800,000 $5,800,000 J. EBITDA (G- H) $1,000,000 $2,559, % 10.4% K. Value MulVple 4 4 L. ValuaVon (JxK) $4,000,000 $10,237, %

23 23 Marketing Productivity Lifetime Customer Value Campaign ROI Velocity Progression MQL s required

24 24 Marketers Problems Calculating ROI Source: Terradata

25 25 Life Time Customer Value

26 26 Sales Productivity Life Time Customer Value Qualified SQL s Velocity Progression Incentive Management

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29 Customisable to the requirements of any organisa;on s revenue process, Telemetry is agnos;c to and takes data feeds from any CRM, ERP or marke;ng automa;on plaiorm.

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34 Understanding Future Productivity

35 Driving Decisions Today

36 IBM has strong capabilities that can address Sales Performance Management, Market Performance Management and Revenue Performance Management leading to whole Distribution Channel Performance Optimisation. Key software capabilities: Incentive Commission Management Objective/quota management Territory management Hiring/ onboarding Appraisal/evaluation management Sales coaching systems Agent/ broker Performance/ Customer Experience Management Real Time Marketing Profitability Analysis Retention Analysis Channel/Access Method Analysis Configure/ Price/ Quote Compensation Analysis Relationship Referral Analysis Omnichannel communication Targeted marketing New Business Sourcing Analysis Cross Sell / Up Sell Analysis Agency collaboration Revenue Performance Management 36 Distribution Channel Capability hierarchy Distribution Channel Performance Optimisation Revenue Performance Management Marketing Performance Management Sales Performance Management Software products Cognos Incentive Commission Management Cognos Sales Performance Management Cognos TM1/ BI SPSS Enterprise Marketing (Unica, Coremetrics, TeaLeaf) Smarter Commerce (DemandTec, Sterling Commerce, ) Social Business SW Kenexa

37 37 Summary Business Development is tough The Buyers Journey has changed How we sell needs to change Everyone needs to be involved Accountants need to engage with sales and marketing as never before Measure the change you want to see Drive productivity from the start at conception Engage Through the process

38 38 Thanks Andrew France

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