In recent years, with technological advancements like Big Data and Advanced Analytics, more emphasis is put on ‘data’ in businesses and ‘Sales’ is no exception from this. Sales is no longer intuition driven wherein traditionally the sales reps did research on the prospect and got a feel of their interests and determined whether or not they are ideal customers. Today sales data is an indispensable component for the success of the sales team. In this blog let us discuss the significance of sales data, what sales data to track and how to create a data-driven sales team.
Data-driven Sales
Data-driven sales are the art of using data to make smarter decisions and the effort of continuously optimizing the sales processes through analytical insights. A data-driven sales process is just like any other, besides the fact that the core of what, how, and when is derived from data instead of intuition or gut feel.
One of the biggest advantages of data-driven sales teams is increased profitability. According to research presented by McKinsey, companies that inject data into their sales are 5-6% more profitable than their competitors, That alone is enough reason to deploy a data-driven sales strategy, but it can also help to:
– Identify the real needs of customers at different touchpoints
– Improve Lead Generation Efforts
– Maximize Customer Lifetime Value
– Fosters Learning, Growth, and Improvement of the sales team
– Provide ways to customize the customer journey
– Identify customer pain points
– Reveal strengths and weaknesses of sales reps
– Identify areas of improvement within the current sales strategy Market changes and consumer preferences drive sales decisions, and sales data underpins those changes and preferences, allowing sales leaders to make more informed judgments. Data-driven sales also help sales leaders to determine their ideal customers, enable effective prospecting, identify loyal customers, and optimizing the sales process.
What Sales Data to track?
The sales team need not make use of all the metrics available in the sales data. Below are the few key types of sales data (also serves as KPIs) that the sales team should keep track of, as these are important for covering company-wide performance as well as tracking how the sales team is making an impact on the company’s goals.
– Total revenue: How much revenue the sales team is generating.
– Revenue by Territory: How much revenue your sales team is generating by territory.
– Revenue by Market: How much revenue your sales team is generating by market.
– Revenue per Sale: How much revenue is generated by every sale.
– Revenue by Product: How much revenue is generated by each product, product line, or service.
– Percentage of Revenue from Existing Customers: How much revenue is generated from existing customers (i.e. cross-selling, upselling, repeat orders, expanded contracts, etc.)
– Percentage of Revenue from New Business: How much revenue is generated from brand new customers.
– Total sales by time period: How your sales team is performing over time.
– Sales by Lead Source: Where your sales are coming from and what lead generation sources are or are not working.
– Year-over-Year (YOY) Growth: How sales team performance is growing as compared to the previous year.
– Average Customer Lifetime Value (LTV): How much revenue you can expect one customer to generate throughout your business relationship.
– Cost of Selling as a Percentage of Revenue Generated: How much your company is paying to generate sales.
Building a Data-driven sales team
The sales team that relies on data observes below distinct practices:
1. Align on goals and mission statements – It is vital to persuade the sales team to take a data-driven approach, and it is the sales managers’ obligation to communicate and implement the strategy. This helps to keep everybody on the same page and determine what goals the sales team is pursuing, what data can help achieve the goals, and what each team member needs to do to stay aligned in this pursuit.
2. Build and follow a Sales Process-A sales process allows evaluating which aspects of sales strategy are effective and which are not. By repeating the same actions across your team, you can make a note of where you can incorporate and track new KPIs and sales data.
3. Take stock of the Quality of data- Sales directors frequently scrutinise the quality of leads coming in from marketing and outreach initiatives, but it’s also important to check the data flow in the opposite direction. This means the marketing department will have few clues about why a campaign or effort was unsuccessful. Giving a reason, on the other hand, helps marketers spot a pattern, allowing them to double down on successful initiatives while cutting back on unsuccessful ones, allowing the budget to be spent more wisely.
4. Use existing data to inform strategy- Before diving into fresh data, some examination of existing sales data will provide valuable insights, such as information about past buyers and prospects. This helps to form new decisions or strategies.
5. Work with a CRM — and they make data accessible– A CRM can track all prospect and customer activity and automate even the most menial tasks, such as email follow-ups and contact updates. It also keeps the sales team aligned by making all of the sales data equally accessible.
6. Track all prospect interactions to learn what works and what doesn’t – Prospect interactions can tell a few important things like – where that prospect came from, why the sales rep reached out in the first place, how the sales rep made a contact and what form of communication they used. This helps to get an overview of the entire sales process and also gather demographics and psychographic information to further build buyer personas when the prospect becomes a customer.
7. Engage with leads and prospects that fit certain criteria- Sales team working only with Good-fit companies saves their precious time and energy, as well as makes the company more profitable.
8. Communicate about best practices and approaches that don’t work – the sales team should always be talking about their best practices and techniques that don’t quite work, this boosts morale and serves as a form of sales coaching and training. This also encourages to continuously keep the data up-to-date and use it effectively.
Thus, building a data-driven sales team focused on quality data and growth is the only way to fully exploit sales data. Sales teams can no longer rely on intuition to guide them through the sales process. Instead, through data, sales teams have access to an endless supply of information about their leads and can target exactly who they want from the start. Seems like a no-brainer! We at VAST Tec, help our clients in managing their Sales data by Data Cleansing and Data Enrichment services. Through our Sales Enablement services, we help the client take the next steps in their lead generation and enable them to target only the target (good-fit) companies.
Are you Sales Enabled?