As renowned physicist Lord Kelvin once said, “If you cannot measure it, you cannot improve it.” With sales leaders struggling to stand out in today’s increasingly demanding market and overcome decades of “art of sales” ideology, these words could not ring more true in the sales industry.
Having seen the growing importance of “big data,” some sales teams have begun haphazardly collecting and storing data within their CRMs and other sales platforms. Of course, this comes with its own set of problems, with 38% of sales leaders admitting that they simply don’t know what to do with their data.
To quote Facebook’s VP of Engineering Jay Parikh, “If you aren’t taking advantage of the data you’re collecting, then you just have a pile of data.” To start capturing data in a meaningful way that can be measured and make a true impact on your business, you must have a plan in place.
According to sales consulting firm LiquidHub, there are 4 types of data every sales team should capture:
- Contact: email, name, company, etc.
- Demographic: industry, location, etc.
- Transactional: communications, purchases, etc.
- Relationship: characteristics, likes, dislikes, etc.
So how do you capture all these different types of data? How do you know exactly what data points you need? And how do you use it to make smarter decisions? Let’s dive in.
Know What You Don’t Know
Taking a data-driven approach to sales is rooted in the discipline of the Scientific Method. Every sales leader has certain observations and assumptions about what’s going on with his or her sales performance, but the difference between the art and the science of sales is taking a step back and testing and analyzing these hypotheses.
For instance, don’t just guess that deals from one territory aren’t closing because your reps on that team aren’t up to par. What else could it be? What other data points could you collect to further analyze this situation? Perhaps you could look into seasonality, lead source, competitors – the list goes on. In taking this investigative approach, not only will you get the answers you seek, but you’re also likely to uncover some fresh insights that you didn’t have before.
Develop a Sales Process
Once you are aware of the data points you would like to collect, one of the best ways to capture that data is to formalize a sales process. A sales process outlines the exact steps reps must take to move a deal from one stage of the sales pipeline to the next. Imagine a business with a pipeline composed of the following stages:
A structured sales process might require reps to have an on-site meeting, complete a comprehensive industry analysis and receive confirmation that they’ve made the short list of competitors before moving a deal from the Evaluation to the Consultation stage.
As you capture the information necessary to complete each step of your sales process and develop a consistent data set, you will be able to measure, understand and improve performance over time. Research shows that there is an 18% difference in revenue growth between companies that define a formal sales process and companies that don’t. If you’re curious to learn more, check out this free eBook: 3 Keys to Unlocking a Scientific Sales Pipeline.
Maximize Data Quality
The only thing worse for your business than having no data is having bad data – in fact, According to Ovum Research, “dirty” data can cost a business 30% of revenue. So how can you make sure your sales team and tools are collecting the quality of data needed to yield true insights?
- Don’t force sales reps to use multiple systems to send emails, make calls or run reports. All-in-one sales solutions increase the likelihood of data input and completeness by boosting rep adoption and preventing data from becoming siloed across various sales tools.
- Make sure your sales tools are as seamless to use as Google or Yelp, even on mobile devices. If field reps can’t enter information on-the-go, the chances they will enter this data accurately and entirely is slim to none.
- Automate as much data collection as possible. The less data reps have to enter manually, the more data is captured and the lower the chances of human error impacting data integrity.
- Integrate with other key systems across your business, like Zendesk, Marketo or HubSpot. This ensures that you have a clear and complete view of your customers, including their lead sources, campaign participation or open support tickets.
Choose Your Metrics
As any sales expert ought to know by now, simply measuring revenue doesn’t offer much insight into sales performance, and certainly doesn’t tell you how to get better. Access to a high quantity and quality of data allows sales leaders to go beyond revenue and examine the many facets of sales performance. What’s more, new sales metrics are emerging that can measure performance across key conversion points within the sales funnel, providing specific steps that can be taken to impact growth.
For a full breakdown of these new metrics of sales, check out this white paper. For now, let’s use one of these metrics as an example: Lead Yield. Lead Yield is just one example of a Yield Measure, or measures that can help you understand how much value you get in return for your investments at each stage of the sales pipeline. Lead Yield can be calculated using the following simple formula:
Sales Revenue / # of Leads Generated
Understanding your lead yield enables you to more accurately score and prioritize leads from your various marketing channels and sources based on those that ultimately generate the most value for your business. It also gives you deeper insight into the data points and qualities you should be looking for when it comes to prospecting – i.e. contact title, company size, industry, other technologies in use, etc.
Building a sales data strategy is becoming one of the foundational components of a successful sales organization. But without the right information, data quality and metrics, your business won’t get very far. If you’re interested in learning more about applying scientific processes to your sales, check out our Sales Science Academy, and enroll today.