How to end the war between sales and controlling
Why Controlling and Sales cannot be friends?
Conflict is unavoidable, even necessary in business. “For good ideas and true innovation, you need human interaction, conflict, argument, debate.” – writes Margaret Heffernan, an internationally renowned author, businesswoman, interviewer, and TED speaker.
Conflict will arise in any company, regardless of whether sales controlling and key account management belong or not to the same structure or share the same culture. Conflict is natural – even required. At the same time, predictive analytics is gaining in importance to avoid disputes in and with sales.
A 2006 Harvard Business Review article by Philip Kotler, Neil Rackham and Suj Krishnaswamy brought exceptional attention to the perpetual conflicts between sales and marketing. In a similar, yet limited fashion, we would like to highlight here the challenges between sales and controlling.
The struggle between sales and controllers arises when companies, mainly unintentionally, put them in a situation in which both organisations are involved in multiple interests, financial or otherwise, and serving one interest usually consists in working against another.
The Sales KPI that controllers and analysts measure is often the first battlefield. Key Account Managers tend to disregard the chosen metrics. Companies and sales leaders should not underestimate – neither overestimate – their importance.
Importance of sales controlling in B2B.
How often do you hear “data is the new gold.”? What value can you extract, however, from that “gold” when you cannot understand and use the information it contains?
Without a Sales Controller doing the interpretation job, sales executives don’t get any single answer, conclusion, call-to-action or insightful recommendation from sales data. Companies can measure as many as KPI as they please, none of them will compensate for lacking a competent sales controller.
One of the most important jobs of a sales controllers is to extract wisdom from sales data. They face exponential amounts of data and possible data sources nowadays. There is also an almost infinite pool of data analysis methods to choose. Only competent and experienced sales controllers can provide critical insights to and into any sales team.
Sales Controllers importance is currently raising. Over the last years, the same amount of key account managers needed 8 % more controllers.
Why are sales controllers in critical in B2B? For several reasons. First, in Business-to-Business, with long sales cycles and valuable customer relationships, sales controllers ensure that sales teams keep budgets and risks under control.
Second, sales controllers are the magnifying glass for sales efficiency. Because the B2B sales team is one of the most valuable resources of any business, controllers ensure that it invests its time where it makes the most sense.
Besides, sales controllers are regularly the middleman between the mined field of sales and the finance department. In many cases, surmounting the political and operational differences between these two agencies needs a combination of rare analytical skills and a human touch.
Lastly, sales teams in B2B are also facing an increasing amount of sales data. They need support in moving upward in a cognitive system: from data to wisdom.
Sales data are just numbers, lacking per se any use or goal. Executives should use data to extract valuable sales information. This critical process represents the first understanding of utilisation and objectives that any sales data can achieve.
Why Controlling and Sales cannot be friends?
Sales and controlling should have a common goal: the financial success of their company. They have a whole different viewpoint, however, and usually various tools and methods.
The current working environment of B2B sales is uncertain and complex. Sales is radically changing. E-commerce and artificial intelligence are chipping away from traditional sales jobs. The last thing your sales rep wants now is someone spying over the shoulder.
Sales controllers and business analysts push for an unrealistic one hundred per cent planning security. Higher management wants them to. However, the forecasting and planning is inherently an exercise on predictive analysis. Sales plans and forecast are born to be wrong.
Customers change requirements, sales cycles get longer, and new competitors enter your market. Sales management can influence these external conditions only to a limited extent. It is natural, therefore, to see how sales controllers and sales reps head to clash.
They are, however, not entirely destined to work worlds apart, for their goals should be the same. Aligning sales activities and controlling must be an urgent priority of any sales leaders. When sales and controlling work well together, companies see substantial improvement in performance.
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Crystal Clear: Measure the sales KPI that matter most.
Key account management – or just called “sales” – is responsible for the success of key accounts and further business development. In most cases, this “pure” sales function is not a cost-centre and has no supervision over budgets other than sales and revenue budgets.
On the other hand, sales controlling oversees sales operations. It brings together subjective and objective sales indicators from sales about customer-facing activities and related sales operations. Sales KPI are the language they use to communicate with management and sales reps. Based on this, executives can assess the company’s prospects and risks.
More often than usually believed, sales and controlling compete for resources, the measurement of key performance indicators and the setting of priorities. It is the sales leader’s responsibility to separate inherent conflicts from internal politics and to achieve sales goals.
Sales management should request specific KPI to the sales team, together with the kind of sales data that controlling needs. Reporting and controlling sales is not a free activity. It is, therefore, necessary to avoid overly complicated, redundant or not-well-thought sales reports and KPI.
To reduce conflicts between sales and controlling, sales management should determine the scope of the sales information to be collected and reported reasonably and practically. This reporting system should be future-oriented and help to focus on resources. Predictive sales analytics plays here a decisive role.
Most companies invest significant resources in reporting lagging sales KPI such as sales and margin. The focus on the past usually fuels conflict between sales and controllers. Predictive analytics offers a set of data mining methods to assess what is possible in the future and where to prioritise.
How to end the war between sales and controlling – Summary.
The conflict between sales and controlling is inescapable. This situation is due to the very nature of their roles. It is even necessary for business-to-business.
However, too much conflict damages morale and reduces the financial performance of companies. Sales teams lose focus on what matters to grow sales. Increasing customer lifetime value comes second to keeping the sales controllers happy with their reports.
Reporting and controlling sales in B2B are of extreme importance. Sales controllers are the augmenting glasses of any organisation. They should work to improve sales efficiency and to increase customer lifetime value.
Higher management can expect sales and controlling in B2B to clash over prioritisation, KPI, forecasting and sales operations in general. Although both Controlling and Sales should pursue a similar ultimate set of goals, the principles and the activities they implement are different.
Company management and sales leaders have the responsibility to reduce this conflict by setting clear expectations and goals. They should also prioritise which KPI to measure and take advantage of available predictive analytics methods.
Do you have any further questions about modern sales controlling? We are happy to help!
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Further Read:
Die vorausschauende Komponente – Strategisches Vertriebscontrolling – Springer (in German).
Prof. Dr. Martin Klarmann. Konflikte durch Analytics vermeiden. Springer Professional (in German)
Ending the War Between Sales and Marketing. Philip Kotler, Neil Rackham, and Suj Krishnaswamy.
Image Header: Claude Monet – The Magpie
