3 DATA SALES POINTS YOU SHOULD BE EVALUATING
Data is important in all areas of business, especially when it comes to sales and customer service. When companies are trying to understand why there is a drop in sales revenue, data can tell a clear story of where the issues and concerns may be hiding. On the flip side, if a company is growing rapidly, data can reveal where the growth is coming from. Let’s take a look at three areas of sales data and what can be uncovered when you look a little deeper.
Sales team activity is an essential measurement for any company. Unfortunately, I often see people focusing on the wrong activities or they don’t give much thought to how they define what an “activity” actually is.
To start, you’ll need to determine which activities move the sale towards a close. Usually there are two or three key points in the sales process that are critical events in any industry. These are spots where the prospect makes a decision about your product or company. The event is an action taken by the prospect. For example, the prospect is asking for a trial, a quote, a presentation, a meeting with decision makers and so forth. These events require the salesperson to engage in some kind of activity to move the relationship along.
You’ll want to avoid picking activities that are too early in the sales process. Don’t be narrow in your definition. Select the critical events that every prospect has gone through to become a client. Once you have two or three activities defined, you’ll need a system to measure them.
Measuring activity is usually done through Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) or other kinds of software. In startups, even a shared spreadsheet will work just fine. Make sure everyone on the sales team records their activity consistently and in the exact same way.
This data is fascinating. You’ll discover patterns of activity for salespeople, showing both their strengths and weaknesses. You can see patterns based on the industries and prospects you are targeting. Measuring and auditing sales team activities will help you figure out who to promote, who to reward handsomely or who needs a harder push. If there is a turn of unfortunate events, and you need to lay someone off, this data will help to validate a decision.
2. Close Rate by Industry Vertical or Prospect Type
Sales close rates are an obvious data point to examine. I regularly find that companies look at a broad close ratio and don’t take the time to narrow down the data. They make inaccurate assumptions about their sales team’s abilities and company growth projections.
I encourage you to break out closed sales data by two different factors: industry verticals and prospect type. Every client I work with has at least two different industries or micro-verticals in their pipeline. A micro-vertical could be the difference between a direct single location business or a parent company that comes with the potential for multiple locations or departments. Industry verticals could be complementary or in very different markets. If you sell through resellers, wholesalers or channels, your data also needs to be broken out by these groups as well.
Prospect types refer to the different individuals that your sales team approaches. What are their personas, positions, responsibilities and decision-making power? It’s important to record which prospect type is searching for your product and generates the leads.
Examining close rate data by industry vertical or prospect type can solve two common revenue traps. Sometimes companies are struggling to gain revenue and are unsure if their product is being marketed to the right audience. In other words, they have a product, but they may be selling it to the wrong industry or individual. The data will help confirm if that’s true.
The second scenario is they’ve hit a sweet spot in a specific vertical and wonder where to innovate next? Should they go to market with the same product in a new industry, or do they need to create a different product altogether? Looking at close rates in detail will create a business case for the tough decisions your company will need to make.
3. Lead Quality
Regardless of how skilled your sales team is, the quality of your leads can directly affect your close rates. Today’s lead generation practices can define “quality” in a few different ways. However, it comes down to how engaged and qualified a suspect is before they become a prospect.
Engagement can be measured in all forms of marketing communication. For websites, you can track the number of pages visited, time spent on each page and clicked links. In email campaigns, we can see open rates and click throughs. Software can now track incoming phone calls to identify where someone is calling from and how many times they reached out. When you combine all of this lead data, you get a Marketing Qualified Lead (MQL) score of how engaged they are as a suspect.
Once marketing has passed the lead onto sales, whether it goes to inside sales, a Business Development Rep (BDR) or an Account Rep (AR), their job is to qualify the lead further. Part of my consulting agreement involves defining what the sales team is actually qualifying for. What qualities does that lead need to have in order to be an ideal fit and bring in the most profit? Once the suspect passes the criteria, they are a Sales Qualified Lead (SQL) and finally become a prospect.
Lead quality data can give insights to two opposite, yet very common, revenue challenges. Some companies are swimming in leads and discover, once they drill down the lead data, that the overall quality of the lead is very poor. What they thought was a sales performance issue is actually a mismatch between their product and the audience to which they are marketing. The sales team is overwhelmed following up on all of the leads, but their overall chances of closing them are relatively small.
As someone who consults on revenue growth, many companies I work with initially have very few leads and nothing is getting converted. Once we look at the lead quality data, we often discover the leads they do receive are amazing and should be converting. This situation clearly indicates that their sales team doesn’t have the skills needed to effectively sell and close the business.
I want to encourage you to take advantage of sales data when creating a company growth plan. Take the time to dissect the data elements with the same fervor and excitement as when you are talking with investors or board members. The sales data will tell a story. When you define and consistently track key parameters, the numbers will speak for themselves.