An Overview of the Sales Management Technology Landscape: Part 2
In part 2 of this series on our Sales Management Market Guide, TOPO focuses on how these technologies deliver value to sales leaders, key considerations when evaluating sales management technology, and the increasing demand for insights and engagement.
An emerging market poised to deliver real value to sales leaders
The sales management category is still evolving, with completely new segments like planning and the more mature but evolving segments like pipeline and forecasting. We anticipate that the category will continue to grow before becoming part of another product set or category. The obvious choice for this category would seem to be as part of a larger CRM platform. However, the future direction of the category will partially depend on whether the larger FP&A-focused vendors, such as Anaplan and Workday-owned Adaptive Insights, continue to invest and grow in the space. In that scenario, key elements of this stack would end up in the financials category.
Another group of vendors to watch are the sales engagement platforms. Two factors to consider: the sales engagement platforms have become a preferred user interface for sales reps (taking over from the CRM) and they own most of the sales engagement reporting. InsideSales.com is an example of this today, with forecasting and reporting functionality to go along with their sales engagement platform.
In the near term there are a lot of possibilities for growth, from new segments emerging to expansion from incumbent segments. There are a number of key trends happening in the market today:
- Planning. Planning is a new growth segment in the category and one that we are watching as Anaplan and Adaptive Insights—mature, successful vendors in the FP&A space—invest in sales management. Their investments will help create buying cycles, and ultimately, opportunities for other vendors in the space. The planning category is seeing new market entrants such as start-up fullcast.io and the more mature LeanData. We don’t anticipate significant growth in this segment yet. Vendors will spend the next year educating the market on sales planning before notable growth begins. Ultimately, planning is not a stand-alone segment as vendors today offer planning as part of their overall solution. We believe this will continue to be the case going forward.
- Sales engagement reporting. One of the biggest realizations over the last couple years has actually been more of a reminder—that the frequency and recency of engagement is as important as any factor in forecasting. Sales engagement reporting is part of sales engagement platforms such as InsideSales.com, Outreach, and SalesLoft. Clari, currently considered a forecasting and pipeline vendor, is making a significant investment in engagement reporting, bringing sales engagement data together with marketing automation data, and continues to rapidly add integrations to new engagement data sources. We expect Clari and InsideSales.com to continue to capitalize on their ability offer the potent combination of engagement reporting and predictive forecasting.
- Pipeline and forecast. The pipeline and forecast segment started this category. This segment has been around for some time and has not become a big market. The biggest lesson in this segment is that the market isn’t necessarily attracted to AI/machine-learning messaging…yet. The market has finally seen recent traction with key factors such as the integration of engagement reporting, the ability to standardize the forecasting process, and sales activity automation, which continues to make the process of data capture seamless.
- Next best actions. The sales management category becomes extremely relevant once the automation can analyze the data and make compelling recommendations for next steps. Some applications have already begun to make recommendations. The functionality will continue to grow as organizations invest in capturing and managing their data.
- Sales activity automation. One of the biggest impediments to forecasting was the ability to capture data, which is increasingly being solved via sales activity automation. For example, capturing activity data used to be dependent on the sales reps’ ability to log it in the CRM. Now that activity is automatic. Automation of sales activities is not necessarily stand-alone—it is found in sales engagement platforms, forecasting platforms, etc. Sales activity automation will take an even bigger step forward once voice assistants enable reps to enter data without typing.
Most of the technology mentioned above falls outside the CRM. In reality, the biggest vendors in the pipeline and forecasting segment are CRM vendors or reporting and visualization applications such as Tableau, Looker, and Domo.
Salesforce offers Sales Cloud Einstein Forecasting, which was announced during Dreamforce 2016 and was the result of the PredictionIO and MetaMind acquisitions. Salesforce’s solution took disparate key concepts in the market—such as lead and opportunity scoring—and brought them all together.
Einstein doesn’t go quite as deep as some other forecasting solutions on the market, but it is generally a sufficient solution for 70% of today’s market.
Salesforce’s solution includes a number of key features:
- Einstein Activity Capture: Salesforce’s version of sales activity automation
- Einstein Account Insights: an auto-generated snippet on why the rep will or will not close the deal based on activity or engagement in the account (at the opportunity or account level)
- Einstein Forecasting: a prediction whether a rep will hit their number based on historical averages of the business and run rates
- Einstein Lead Scoring: a predictive number designating whether a lead will become an opportunity
- Einstein Opportunity Scoring: a predictive number indicating whether an opportunity will convert into a customer
- Einstein Analytics: a numeric prediction regarding whether an opportunity will convert into a customer
Sales Management Technology Market Landscape
Key considerations when evaluating sales management technology
Sales management technology is in the early days of growth. As more customers come online, more buyer recommendations will emerge. The general rule is the more complex the sales organization, the greater the need for the sales management solutions.
Sales Management Solutions
The forecasting category is a fit for inside and direct sales but not yet for channel or OEM. Inside and direct sales have their own challenges (inside has shorter sales cycles, for example), but the benefits of using forecasting software to predictively manage the forecast has been proven in both settings. On the other hand, channel and OEM have experienced more difficulties in this area due to the lack of visibility from third parties.
Like all success software implementations, strategy, people, and process come first. In the case of forecasting, technology must support a standardized forecasting process reinforced across leadership of all levels. To achieve this, the following best practices are critical:
- Develop and train on a common forecasting methodology (terminology, expectations, etc.). This includes setting and managing performance against core metrics, such as pipeline coverage, deal velocity, and conversion rates from stage to stage.
- Provide hands-on software training. Sales operations should train individual reps and follow up weekly for the first 3 or 4 weeks to ensure proper adoption. Once a successful pilot group is established, continue to roll out training to other individuals. TOPO recommends holding training sessions for newly-deployed solutions at SKOs (sales kickoff meetings).
- Hold separate forecast and pipeline meetings to ensure that both are intentionally managed and measured. The forecast meeting is to discuss deals closing in the near term while the pipeline meeting centers on building early-stage opportunities for future quarters.
- Involve key stakeholders from marketing so that they can act quickly to address any shortfalls. With the right visibility, marketing can launch programs to generate additional pipeline in struggling areas or hold live events to engage stakeholders from stalled opportunities.
The growth of sales management is driven by increasing demand around engagement and insights
Most sales tech categories start with early adopters from the high-tech industry, primarily in tech centers such as the Silicon Valley, and then spread industry-wide and geographically. The sales management market is still young and, as such, most of the buying activity will be primarily with these early adopters from the tech industry.
That said, TOPO has seen small pockets of growth in life sciences, healthcare, and manufacturing. This is a good sign for the category. The market is still very much emerging and behind other sales tech categories such as engagement, but it will continue to grow. We forecast a number of key factors that will promote the category’s growth:
- Sales activity automation will be the unsung hero of sales AI as technology continues to make data usable. The success of the sales management category hinges on the growth of another— sales activity automation. Sales activity automation has wide appeal for at least three reasons:
- It promises to make the day-to-day life of a sales rep much less manual.
- It’s a feature in multiple applications such as the sales engagement platform.
- A growing number of sales activity automation vendors receive funding (for example, the $30M Series B for People.ai).
Since sales activity automation improves data’s reliability and visibility, and since the sales management category depends on reliable and accessible data, the growth of this type of automation is strengthening the ability of sales management to deliver better data-driven recommendations. Things are already getting better. With continued investment in the sales activity automation space and the ubiquity of the functionality in a wide variety of sales tech applications, they should continue to improve.
- Voice assistants will play a huge role in data collection and rationalization. Sales activity automation will get an even bigger boost as voice assistants allow sales reps to use voice to send data back to the CRM. Microsoft Dynamics, Salesforce, and Tact.ai already have voice assistants in market now. While nascent today, conversational AI is heavily funded, will continue to grow, and has the potential to become the primary channel for data collection in sales. As another sales activity automation source, voice assistants will boost the usable data and make the sales management market even stronger.
- Eventually, all engagement data will be captured in one source and become usable from sales management tech (and others). Multiple tools and applications generate engagement data today, but the data is currently is not captured in one place. There are pockets of valuable engagement data captured by the sales engagement platforms and from sales management tech such as Clari, which is collecting data across sales engagement and marketing automation (e.g., Marketo). We believe a race has begun to develop the repository that will secure all engagement data across all touch types (marketing, SDR, sales, customer, and even finance).
In the B2C space, this type of technology is called the customer data platform. In B2B, sales engagement vendors, sales management tech in sales, and account-based platforms in marketing all have the opportunity to be the single source of engagement data. And of course, the CRM looms large in this market. With the right data, the sales management category can skyrocket and ultimately pave the way for AI-driven recommendations.
- The ability to recommend next-best actions (the NBAs) moves the market from merely providing visibility to becoming truly actionable. As the data volume and quality improve, so does the opportunity for automation to recommend credible NBAs. Here is an example of what it will look like: in a one-on-one deal review meeting with a rep, a sales manager will have a trusted analysis of the deal and recommended next steps based on proven tactics quantified by data. This type of robust insight speeds up decision-making and moves recommended actions from gut-feel to data-driven.
The data-driven sales management technology market is potent
The still-growing market is poised to not so much disrupt as radically boost sales organizations’ every activity. From automation of insight collection to establishing one source of sales truth through enabling forecasting with effortless visibility, this category—more than any other today—has the potential to transform the effectiveness of sales reps and leaders.
The extent to which sales organizations tap the power of this data-harnessing market will be the determining factor in their ability to correctly forecast revenue, meet quotas, and thrive.