Written
by Allie Decker
Why
data in sales is important, what sales data to track, and how to create a
data-driven sales team.
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Sales
has traditionally been an intuition-driven profession.
What do
I mean by this? Well, salespeople conduct research on potential customers and
then engage the best-fit prospects in conversation. This allows reps to feel
out each prospect’s interest and determine whether or not they’re an ideal
customer.
In
recent years, however, sales data and technology has changed the way that sales
teams think and feel — no longer does intuition sit in the driver’s seat. Sales data has taken the
wheel, and for good reason.
Today’s
businesses need to make sales decisions in response to market changes,
competitor activity, customer preferences, and company-wide campaigns. Plus, as
the cost of acquiring new customers continues to rise, sales teams
need to focus on targeted efforts to preserve resources.
Sales
Data
Data is
an indispensable component of successful sales teams. Sales data can help representatives
avoid pursuing bad-fit customers, and it can inform new opportunities that
sales teams wouldn’t detect otherwise.
But
data on its own can be intimidating, especially for teams who are getting used
to such an analytical culture.
Moreover,
sales teams don’t need to make use of every single metric. Before I dive into
the types of sales data your team should track, let’s start with how to
approach sales data so it benefits your team and company goals.
How to
Approach Sales Data
First,
set your business objective(s). (This step isn’t about what data can do for
you; it’s about the goals within your business. So, focus on what you want for your
sales team.)
Example:
We want to shorten our sales cycle in Q2.
Next,
make a note of what questions arise from your objective.
Example:
How long is our current sales cycle? What’s causing it to be at this length?
How long would we like it to be? How much money would this save us? What do we
need to shorten the current sales cycle?
Finally,
identify which sales metrics are needed to answer these questions. (We’ll
cover the types of sales data below.)
Now
your sales team should know which specific sales metrics to leverage as you
work to meet your objective. Over time, as your objectives change, you may need
to add or remove various data points based on need.
The
following section will cover the types of data your team should know.
Types of Data a Sales Team Should Track
1. Total
revenue
2. Total
sales by time period
3. Sales
by lead source
4. Revenue
per sale
5. Revenue
by product
6. Market
penetration
7. Sales
per prior activity
8. Percentage
of revenue from new business
9. Percentage
of revenue from existing customers
10. Year-over-year
(YOY) growth
11. Average
customer lifetime value (LTV)
12. Net
Promoter Score (NPS)
13. Number
of sales lost to competition
14. Percentage
of sales reps attaining 100% quota
15. Revenue
by territory
16. Revenue
by market
17. Cost of
selling as a percentage of revenue generated
In this
section, I cover the most common sales key performance indicators (KPIs). These are important
for covering company-wide performance as well as tracking how your sales team
is impacting your broader company goals. Let's look at them in more detail in
the following chart. We'll talk about how to actually
collect this data later.
(For a
list of over 50 sales metrics as well as a breakdown of sales KPIs per team
type, check out our Ultimate Guide to Sales Metrics.)
|
Sales kpi
|
what it tells you
|
|
Total Revenue
|
How much revenue your sales team is
generating
|
|
Total Sales by Time Period
|
How your sales team is performing (i.e.
improving or worsening) over time
|
|
Sales by Lead Source
|
Where your sales are coming from and what
lead generation sources are or are not working
|
|
Revenue per Sale
|
How much revenue is generated by every sale
you make
|
|
Revenue by Product
|
How much revenue is generated by each
product, product line, or service that you sell
|
|
Market Penetration
|
How much your product or service is being
used by customers as compared to the total estimated market
|
|
Sales per Prior Activity
|
How many sales were made for each prior
activity (e.g. phone calls, email outreach, in-person meetings, etc.)
|
|
Percentage of Revenue from New Business
|
How much revenue is generated from brand new
customers
|
|
Percentage of Revenue from Existing
Customers
|
How much revenue is generated from existing
customers (i.e. cross-selling, upselling, repeat orders, expanded contracts,
etc.)
|
|
Year-over-Year (YOY) Growth
|
How your 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
|
|
Net Promoter Score®
(NPS)
|
The degree to which people (e.g. your
customers) would recommend your company to others
|
|
Number of Sales Lost to Competition
|
How many sales in a given time period are
lost to competition
|
|
Percentage of Res Attaining 100% Quota
|
How many representatives on your team are
attaining 100% of their quota
|
|
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
|
|
Cost of Selling as a Percentage of Revenue
Generated
|
How much your company
is paying to generate sales
|
Data-Driven
Sales
Data-driven
sales is a sales approach that involves collecting and using specific metrics
to inform all sales decisions, from lead prospecting to people
management to churn reduction and pricing.
Using data in sales can help your representatives improve
productivity. It can also save them precious time and energy pursuing customers
who aren’t a good fit or are uninterested. Implementing a data-driven sales
approach can also make your business more profitable — up to 6% more profitable than their competitors.
This
approach sounds easy enough, right? Well, it’s one thing to say you embrace a
data-driven sales strategy … and it’s quite another to use that data to
influence, develop, and empower your sales organization.
Let’s
talk about what a data-driven sales approach looks like in action.
Building
a Data-Driven Sales Team
A sales team that relies on data observes a handful of distinct
practices. Read through these to see how your sales team can start following
the same approach.
1) They
align on goals and mission statements.
A
data-driven sales team is aligned on everything — from big objectives to
day-to-day goals. This alignment is the responsibility of sales managers to
communicate and execute. It’s also good practice to develop those objectives
and goals with your entire sales team, so loop them in on any planning or
goal-setting meetings.
This
process mirrors the questions I
discussed above about figuring out what sales data to use. They help
determine what goals your sales team are pursuing, what data can help you
achieve those goals, and what each team member needs to do to stay aligned in
your pursuit.
2) They
build and follow a sales process.
A
data-driven sales team follows a distinct sales process — a repeatable set of actions your team does to
close a new customer. A sales process allows you to see which parts of your
sales approach are working and which parts aren’t. 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.
When
making changes or updates to your sales process, do so slowly and with one
change at a time. This lets your team get used to the change and allows you to
clearly see if that change is benefitting or hurting your overall sales
process.
3) They
use existing data to inform strategy.
A
data-driven sales team doesn’t only use new data; they also use any data
they’ve already been collecting (even if it’s never been put to use). Existing
data can be a goldmine of insights and untapped ideas — just take a look at how Harley Davidson used old data to increase new sales by almost 3,000%.
Before
diving into a new data tool, do some analysis on any existing sales data, such as information about
past buyers and prospects. Gather your sales team and chat about what existing
data you have and how you can use it to inform new decisions or strategies.
4) They
work with a CRM — and they make data accessible.
A
data-driven sales team works closely with a customer relationship management (CRM) tool, such as HubSpot’s free CRM. A CRM database is highly valuable. It
effectively replaces cluttered spreadsheets and disjointed tools — and it
generates helpful sales reports (which you can also find in HubSpot’s SalesHub).
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 your sales
team aligned, making all of your sales data equally accessible.
5) They
track all prospect interactions to learn what works and what doesn’t.
A
data-driven sales team treats every prospect interaction with equal importance.
Whether a prospect never responds or becomes a customer, every interaction can
give your sales team valuable data and insight into what’s working.
Prospect
interactions can tell you a few important things:
·
Where that prospect came from
·
Why your sales rep reached out in the first place
·
How your sales rep made contact and what form of communication
they used
From
initial contact, you can also track either 1) the sales cycle for the specific prospect, or 2) which competitor
you lost the prospect to. You can also gather demographic and psychographic
information from each prospect that becomes a customer to further build out
your buyer personas.
6) They
only engage with leads and prospects that fit certain criteria.
A
data-driven sales team only pursues leads and prospects that prove to be
good-fit customers — something that proper data can tell them. As I said above,
sales data has the potential to save your sales team precious time and energy,
as well as make your company more profitable.
To do
this, your team must make use of the data it collects. Once you qualify
good-fit leads, your team should know what data to look at to understand
whether they should engage a new prospect. Perhaps you’ve defined a good-fit
lead as a customer with a certain monthly revenue as well as a certain minimum
of marketing team members. Encourage your team to focus their energy on prospects that
fall into this category.
7) They
communicate about best practices and approaches that don’t work.
A
data-driven sales team is constantly sharing best practices with one another.
Perhaps one of your sales reps has learned a new way to use their sales data.
Perhaps another has found a new approach that almost always guarantees a
prospect response. Regardless, your sales team should always be chatting about
their best practices and approaches that don’t quite work. You can share this
information through team-wide meetings or via one-on-ones between managers and
reps.
Not
only will this strengthen morale and act as a means of sales coaching and training, but it will also help you
continually keep your data — and how you use it — up-to-date. Sales data is an
iterative process, and your sales team can help you constantly improve on how
you use and apply it.
Sales
Data Helps You Grow Better
No longer
does intuition lead the charge on your sales team; sales data is the new kid on
the block. A data-driven sales team can save your organization time, energy,
and money — resources that your company likely doesn’t have to waste. Data in
sales can also align your sales team and streamline your sales process in a way
that maximizes revenue and business impact.
Take a
look at your existing sales data, get started with a free CRM, and dive into
how data in sales can help your organization flourish.
Originally
published Sep 27, 2019 7:30:00 AM, updated September 27 2019
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