Sales teams can no longer rely on intuition to guide them through the sales process. And luckily, they don’t have to.
As data continues to power nearly every aspect of businesses today, it’s also becoming an indispensable asset when it comes to sales.
Research shows companies that inject data into their sales process and operations are 5 to 6% more profitable and productive than their competitors.
This alone is reason enough to deploy a data-driven sales strategy. But before we dive into why you should be using a data-driven sales approach, let’s define it.
What is data-driven sales?
The definition of data-driven sales is fairly straightforward. “Sales teams collect data and use it to inform every decision they make, from the products they sell to the time of day they reach out to prospects and customers.”
What is data-driven sales?
Data-driven sales is an approach to sales in which sales teams collect data and use it to inform every decision they make, from the products they sell to the time of day they reach out to prospects and customers.
For example, you have a ton of data about your prospective and current customers. A data-driven sales approach means you leverage this data and information to personalize your messaging, anticipate needs, and replicate success with other similar customers.
In theory, this is an easy concept to understand, but in reality, it’s significantly more difficult to put into practice.
In fact, 40% of organizations indicate that scattered information and limited visibility into data impair their sales organization. Even more concerning, 56% of sales executives are dissatisfied with their ability to offer valuable, data-driven insights.
“It’s easy for leaders to say they embrace data-driven sales management, given the sheer volume of data and reports available. It’s an entirely different proposition to actively embrace the power of data, leverage the insights from analytics, and prepare for the digital transformation that all salespeople, managers, and leaders will face this year and beyond.”
Having transparency into what leads, prospects, and customers are doing on your website allows you to create more personalized and relevant messaging.
For instance, let’s say you’ve analyzed the past click history of a lead and discovered they’ve downloaded every resource you have that’s related to a certain product or service you offer. Knowing this will help you determine their sales readiness, what the best next step would be, and what follow up actions you need to take.
Based on data about how a prospect is interacting with your brand, whether the interaction has increased (or decreased), you can change lead scores and use these scores to make decisions about who you should spend your time on.
What is lead scoring?
Lead scoring allows you to use demographic and behavioral data to place a numerical value on your contacts and prospects so that you can use that data to prioritize your marketing and sales efforts.
Prospecting and lead generation requires a lot of trial and error. Testing to see what messaging and communication channels get the best response, or not, and then learning from those findings is an important step in refining your approach.
What patterns did you see in your prospecting efforts? Maybe you uncovered a specific time of day that’s a sweet spot for reaching your target audience. Or perhaps your subject line boosted your email open rate.
Having insight into what your current customers are using, or not using, creates opportunities to explore “add-on” features, service expansions, or what the next phase of delivery could be.
For example, let’s say you have SaaS solution and you’ve just learned your client added a number of new employees in a certain region. This region has limited access and a set number of licenses to your platform. Based on what you know from the data in your CRM about this region and the usage of the current employees, you can make a compelling recommendation of what your client should do to include these new employees.
Improve Your Product, Service, or Solution
The ability to analyze the various aspects of your product, service, or solution is invaluable. Data about how well one product or service is doing over another, or who is actually buying your solution versus your intended audience, will help you make more informed decisions about your price, positioning, and target personas.
Reduces Churn and Increases Client Retention
You can use your data to identify signals or variables that affect the health of your clients. There are certain ‘at-risk’ signals that indicate customer discontent and there are ‘at-opportunity’ signals that indicate customer satisfaction. You can use both to guide your decisions about how and when to communicate with these types of customers.
For instance, perhaps you analyzed your top clients and realized they are actually two times more likely to purchase elsewhere than your other customers. Or maybe you discovered that the more products a customer had, the more likely they were to remain a loyal customer.
Reason #3: Fosters Learning, Growth and Improvement
Data has created an entirely new way of looking at learning and development. It’s created a window into performance, productivity, and priorities.
Key Performance Indicators (KPIs)
Believe it or not, some sales reps aren’t given access to sales reports. This information is vital when it comes to tracking progress, making smarter decisions, and reaching goals. You’ve worked so hard to collect this data, and it’s imperative you have access to it so you can make improvements and grow.
For instance, you can conduct a win/loss deal analysis to understand why some prospects buy your products and why some don’t. You can also analyze the data regarding how you're spending your time. Are you spending too much time on admin work? Emails? Data entry? Use this information to guide your time management efforts.
When you’re able to see sales goals, forecasts, and call outcomes, you’re better equipped with the tools and information needed to succeed.
Great sales managers are constantly coaching, but in a lot of cases that includes more coaching around soft skills like questioning, listening, and tone of voice on calls and in meetings, etc.
Yes, you absolutely need feedback in these areas, but with the rise of data comes the need for more quantitative ways of coaching.
Data-driven sales coaching uses data to identify areas for improvement. For example, you can analyze the conversion rates of sales reps at different stages in the sales funnel. A rep with high conversion rates in the top of the funnel but lower conversion rates in the bottom of the funnel may need additional coaching on questioning, qualifying, and closing deals.
Embrace a Data-Driven Mindset
The term ‘data-driven’ refers to what data you collect, how you collect it, and then what you do with it once you have it.
Sales organizations can derive value from KPIs such as conversion rates, call rates, win rates, marketing collateral usage, average deal size, sales cycle length, and deal response time.
These data points are essential for any sales team to understand what factors impact success and advance sales, how to deliver the right content at the right time, and what changes will improve performance.
When you embrace a data-driven mindset and focus on understanding your data, you can determine which content, tools, and techniques serve you best – everything from lead generation, up-selling, and cross-selling to learning, training, and development.