How to Create a Winning Data-Driven Sales Strategy
At least 40% of organizations indicate that scattered information and limited visibility (into data) impair their sales organization, and 56% of sales executives are dissatisfied with their ability to offer valuable data-driven insights. 76% of key business decision-makers are not confident about their data literacy skills.
This data-illiteracy prevents organizations from identifying and leveraging new business opportunities that might be easily available, but just slightly hidden from view.
Here’s everything you need to know to put together a winning data-driven sales strategy for your business.
What is a data-driven sales strategy?
A data-driven sales strategy is a strategy that involves collecting and analyzing data to make effective and relevant sales decisions.
“The goal is to turn data into information, and information into insight,” said Carly Fiorina, Former CEO of Hewlett-Packard.
Companies study the value of returns they receive from their marketing and advertising expenditure. However, sales expenditure is not always examined with the same scrutiny. A data-driven sales strategy can help analyze sales expenditure and increase revenue.
Why create a data-driven sales strategy?
A data-driven strategy has multiple benefits.
1. Data can help you increase revenue.
A data-driven sales approach can help your business become 6% more profitable than competitors.A data-driven sales approach can help your business become 6% more profitable than competitors. #sales #data #spm Click To Tweet
2. Data can help you find customers.
For example, demographic and behavioral data about people who interact with your ads and website can provide actionable insights and potential sales leads.
3. Data can help you identify and improve poor customer relationships.
For example, many Fortune 500 companies calculate Net Promoter Score, a real-time loyalty metric that measures a customer’s likelihood of recommending your product or service.Net Promoter Score surveys are one of the easiest and best ways to measure your customer's loyalty and whether you're living up to their expectations. #nps #salesintelligence Click To Tweet
Net Promoter Score warns you when your customers are less likely to recommend your product. Increasing customer retention by 5% can increase profits by 25%-95%.
4. Data can help you increase productivity.
According to research by Andrew McAfee and Erik Brynjolfsson, companies that inject big data and analytics into their operations increase productivity and profitability by 5%-6%.
3 Steps to a Winning Data-Driven Sales Strategy
Follow these steps to create and execute a data-driven sales strategy.
1. Define your data goals.
According to Harvard Business Review, “companies succeed in the big data era not simply because they have more or better data, but because they have leadership teams that set clear goals, define what success looks like, and ask the right questions.”
According to McKinsey, “many initial implementations of big data and analytics fail because they aren’t in sync with a company’s day-to-day processes and decision-making norms.”
Understand and define what you plan to achieve by collecting and analyzing data. For example, you can use data to negotiate financial arrangements. Kabbage, a venture that provides loans of up to $150,000, asks customers to share customer ratings, social media interactions, and electronic shipping records. Customers who have good ratings and high business volume might receive a better loan from Kabbage.
These are examples of data goals you can establish.
- Find efficiencies and reduce costs.
- Increase conversion rates
- Find new customers
- Improve customer satisfaction and relationships
- Develop new products
- Understand consumer behavior
- Identify areas of friction in the customer journey
- Identify new trends
2. Purchase software and train employees.
Only 24% of the global workforce is confident in their ability to read and analyze data. “To make analytics part of the fabric of daily operations, managers must view it as central to solving problems and identifying opportunities,” said McKinsey.
Purchase specialized software and learn how to use it effectively. For example, if your goal is to design and administer sales compensation programs, you can purchase Forma.ai’s software to collect, monitor, and analyze sales performance data.
Train your employees on how to collect and analyze sales data. Less than 45% of companies have a formal sales training process. However, constantly training your sales employees could increase net sales per employee by up to 50%.
3. Collect and analyze data.
To collect and analyze data, you need to decide what data you will collect. These are examples of data you can collect.
- Net Promoter Score
- Lifetime Value of Customers
- Revenue, Profit and Cost
- Revenue, Profit and Cost Per Sale
- Revenue, Profit and Cost Per Product
- Percentage of Revenue, Profit and Cost from New Customers
- Percentage of Revenue, Profit and Cost from Existing Customers
- Percentage and Number of Sales Representatives Who Reach Quota
Often, companies already have the data they need, but managers don’t know how to organize or analyze it.
Here are some ideas of how you can use data to drive better sales performance.
Coca-Cola collected data from dispensing machines to understand consumers’ taste preferences and create new products.
A shipping firm could improve the performance of its fleet by leveraging data about port availability and weather to minimize waiting times and reduce fuel use.
A bank could reduce duplicate interactions and improved customer service by combining ATM transaction data, online queries, and customer complaints.
The most successful startups develop customer-value tables early in their growth to help them identify their most profitable customer base. They determine the revenue, profit, and cost generated from each customer, looking for customers that require back-end work or additional resources that are not profitable at all. This data help startups understand what kind of customers to acquire and maintain and which to avoid.The most successful startups developed customer-value tables early in their growth to help them identify their most profitable customer base. #salesintelligence #startups #sales Click To Tweet
Collaborate with IT, operations, and marketing personnel to gather the already or easily available data. Social media generates data in the form of conversations, photos, videos, and comments. Cookie data can provide information about how visitors engage with your website. Sensors and equipment might be collecting data about usage and consumption. Analyze such data to find efficiencies and customers.
Should I develop a data-driven sales strategy?
In the last two years, sales enablement tool spending has increased by 69%. 93% of business decision-makers believe that data literacy is relevant to their industry, and it is important for employees to be data literate. However, only 34% of firms provide data literacy training.
If you want to run a successful and optimized business, develop a data-driven sales strategy.