As the marketing lead for C9’s predictive sales applications, I often hear my customers and prospects ask, “What does predictive really mean, and can I really trust sales predictions made by a software application?”
This is one of the reasons we teamed up with analytics expert Martin Butler for a recent webinar (“Is Forecasting as We Know It Dead?”). Butler, who holds a degree in theoretical physics and has worked as a data advisor to many of the world’s largest corporations, truly understands why predictive analytics are a game-changer for sales organizations.
What Does “Predictive for Sales” Actually Mean?
If you’re wondering what makes predictive applications so powerful, Butler explained it in a nutshell: because they’re powered by sophisticated algorithms, they can run through millions – perhaps billions – of hypotheses to find the best ones. The best hypotheses show up as patterns. And the patterns can tell sales teams critical information about their sales processes and activities.
For example, predictive analytics can give you new insight about things you’ve been doing for years. Imagine if you knew whether or not a customer was likely to
- make a new purchase with you?
- make that purchase within the next five months?
- jump to a competitor?
How exactly does this kind of information translate to making better sales leadership decisions? Imagine these two scenarios.
Scenario #1: A customer has been with you for more than 10 years and has spent a total of $100,000 with you in the past. Based on that data, a predictive application would be able to tell you that this customer has a certain likelihood (let’s say 55%) of buying another product from you. As a sales leader, you can then decide how to prioritize your efforts to expand business with this customer.
Scenario #2: You’re a salesperson working on a deal. Traditionally, you have no real way of knowing when or if that deal will close. You and your manager must prioritize your time and activities based on your gut instinct. But predictive sales applications can tell you whether or not your pipeline deal has a low or high probability of closing. This can help you make better, more informed decisions about how to spend your time.
Our clients use C9 OppScoreTM to identify the probability of deal closings with more than 80% accuracy. Early C9 OppScore deployments have identified more than twice as many winnable opportunities as conventional forecasting systems based on committed deals.
Can You Really Trust Predictive Insights?
Once you become a predictive sales organization, do you turn your decision-making authority over to predictive applications? The short answer is no. These tools are meant to enhance your decision-making process; they’re not intended to replace it.
As Butler said, predictive sales applications provide probabilities, not certainties. Even if a predictive model says your deal has a 45% chance of closing, you might still choose to pursue the deal. The difference is, you’re making an informed choice based on data and probable future outcomes rather than your best guess based on gut instinct and/or past outcomes.
One final tip: learn to crawl before you walk when it comes to predictive applications. After you implement a predictive tool, monitor initial results closely so you can gain confidence making strategic decisions based on predictive models.
Wondering how predictive analytics can help your sales team? Learn more.