I was a guest in the audience yesterday when Cloud9 Analytics came to Boston to meet with customers and talk about the releases that will be part of their offerings later this year. The presentation lasted a bit over an hour and included presentation of new sales management data by Jim Dickey of CSO Insights and a customer testimonial from Brainshark, EVP, Dave Fitzgerald.
Cloud9 CEO Swayne Hill spoke about the future releases and current status of the company. The company must be doing a few things right because Hill said they have more than 90 customers now and a 50% revenue increase quarter over quarter. That’s good news given that it’s so expensive to launch a SaaS company and capital is not exactly overflowing.
Last year was the worst year for VC investments since 1997, if you want to know. And the industry actually raised less money than it invested and I don’t know how long it’s been since that happened. Last year was also the year a competitor, LucidEra — another SaaS sales analytics startup — went to the boneyard. So, long story short, Cloud9’s advances in such a market speak volumes.
We also know that if last year had been terrible it would have been an improvement in most companies. Jim Dickey, whose company performs an enormous survey of sales and sales management professionals each year was there to talk about his most recent survey and analysis, which is due out shortly. Without giving away all of Jim’s IP (which I can’t do simply because it is so voluminous) some numbers that blew me away: Last year the win rate on forecasted deals was 44 percent. Forty-four percent makes picking red or black look like genius work. Forty-four percent makes a mockery of the whole forecasting process. It means you’re better off not forecasting.
But there is more. In the same year, in the face of an economic tsunami, 86% of the companies studied raised sales quotas. That’s right, they raised their expectations in the face of overwhelming odds against. I’m sorry but Tennyson is screaming in my ear about the Light Brigade,
Theirs not to make reply,
Theirs not to reason why,
Theirs but to do & die,
Into the valley of Death
Rode the six hundred.
Eighty-six percent is just about everybody. Now I can understand if the rise in quota had something to do with layoffs and consolidation of territories but you can’t have it both ways. If you jettison the underperformers in the face of the tsunami, you can’t simply put their quotas on the backs of others. If you have a realistic expectation that the quota can be attained, why get rid of some staff to begin with?
But I digress. Dickey’s big point, which I think is very good, is that too often management flips coins when it comes to forecasting and you can’t completely blame them. The sheer number of deals in a pipeline and forecast make it impossible to know much about any of them. That’s why Cloud9 Analytics makes so much sense.
The Cloud9 approach is to manage the exceptions. If nothing changes in a deal then it is assumed to be on track. When something does change notifications go out to relevant parties like managers and others who subscribe to a forecast’s or even a deal’s feed. The whole subscription and feed idea is very Sales 2.0-ish and a good thing to have.
But what Hill spoke of and Dickey gave numerical support for, is the next piece in a sales analytics maturity model that I see evolving. Hill’s contention is that we already use performance management tools in the back office for things like manufacturing. For instance, we don’t use spreadsheets to monitor quality or relationships with vendors in the supply chain but too often we do the equivalent in the front office.
Hill’s goal is to make sales performance management as rigorous as other performance management and his road map for additions and enhancements to the Cloud9 SaaS service point in that direction. All this reminds me of Davenport and Harris’s very good book, “Competing on Analytics” which discusses an organization’s need for an analytics maturity model ranging from tactical to strategic use of analytics to improve performance. Cloud9 appears to be on an interesting track to help customers do this and their further announcements for this year will be interesting to dissect.
I owe you an analysis of Dave Fitzgerald’s testimonial about how Brainshark is using Cloud9 as well as a broader constellation of tools but that will have to wait.