Building a Data-Driven Sales Strategy in 5 Steps
“Without big data analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway,” said Geoffrey Moore, author of Crossing the Chasm and business advisor, on his Twitter account back in 2012. Ten years after, this phrase is even more evident than ever. The number of organizations relying on data and analytics is only increasing, with 95% of C-level executives stating that data is an integral part of their business strategy formation.
With the rapid growth of digital solutions and remote teams, forced by the COVID-19 pandemic, the sales process has changed too. A McKinsey report states that about 80% of B2B decision-makers actually prefer digital and remote engagement with the seller instead of in-person interactions. This means only one thing: In order to stay profitable and compatible, companies need to find a new formula for winning customers online by implementing data-driven sales strategies.
What Is a Data-Driven Sales Strategy?
A data-driven sales strategy is a method of data collection of all sales interactions with potential and existing customers in order to enhance the sales team's performance. In other words, the data-driven sales approach implies gathering all the stored information on your product and sales activities and transforming it into unlooked-for insights to improve the sales process of the company in general.
In fact, the sales department is the second most data-driven in their decision-making (42%) after finances (62%). The emails you’ve sent, the time of the phone calls you made, the pieces of content you linked to, and the targeted ads you placed—all of these can become enlightening sales data to help you build better communication with your prospects.
By analyzing which templates received the most answers, what time of the day your sales reps close most deals, what the average deal size is, what part of the sales funnel needs improvement, etc., you can accelerate your team’s effort and build a more efficient sales cycle.
Main Benefits of a Data-Driven Sales Strategy
There are multiple reasons to start using data for sales in your organization. The Global Data Management Benchmark Report by Experian identifies the top ones:
There are also other motives why data-driven sales is a must for a B2B organization in 2022:
1. Better targeting
The more data points on your prospects you can collect, the more precise your targeting strategy can become. In fact, more than half of sales professionals (56%) are already using data to more accurately target the prospects they are most interested in. By knowing the exact location, industry, and business size of your ideal customer profile (ICP), you can forget about the spray and pray approach and thousands of dollars spent on ads in vain.
2. More efficient outreach
Data-driven sales help to better understand your prospect: the challenges they are most likely to face, pain points they have, and their business goals. By finding answers to these and many other questions, your team can build a more personalized outreach strategy without investing hours on researching for information manually.
3. Higher productivity of the sales team
By automating certain aspects of the sales representative’s workflow with the help of big data, you can expect a boost of your team's productivity too. McKinsey’s Marketing and Sales report proves this point: “Companies that inject big data and analytics into their operation show productivity rates and profitability that are five percent to six percent higher than those of their peers. That’s an advantage no company can afford to gnome.”
4. Increased profitability
Sales data is extremely beneficial for the company’s revenue too. According to the BARC research, data-driven sales solutions allow increasing the company’s profits by 8% while also reducing the total cost of operations by 10%. This is quite impressive, considering that after the COVID-19 pandemic, many businesses are still looking for a way to optimize their processes and decrease expenses.
How to Build a Data-Driven Sales Approach
Every organization has to work on creating its own data-driven sales depending on the company’s resources and future goals. If you are looking into transforming your usual sales routine workflow into a data-collection process to provide better services and maximize your profit, here are five main steps you can follow to ensure a successful shift.
Step 1: Get everyone on board and coordinate your actions.
Establishing a data-driven sales mindset isn’t an easy goal to achieve. Thirty-nine percent of professionals indicate that lack of internal communications between teams is one of the major obstacles to data culture implementation.
Therefore, the very first step to data-driven sales is making sure that all departments are on board with it and fully understand the benefits of this approach. Convincing sales, marketing, IT, finances, and other teams to communicate better and switch to a new strategy simultaneously may sound easy on paper, but it is way more challenging in real life.
Very often, certain team members (and especially the management) are not fully ready to accept the change. For them, it is always easier to keep the processes the way they were before than to learn something new from scratch. However, even if a certain strategy worked well for you in 2018, it will not necessarily be effective in 2022. The change to sales data is inevitable, and the earlier your team accepts it, the better it will be for your business.
Once you’ve managed to convince your team members about the value of data-driven sales, the next step will be to coordinate your actions:
- Define the main goals you want to achieve with the help of sales data.
- Operationalize these qualitative goals into quantitative metrics that you can measure and track over time to see progress.
- Decide on the type of datasets needed to achieve these goals.
- Choose a strategy to collect the needed data.
It is essential to have the entire company working together, combining their efforts, skills, and resources to secure a successful transition into a data-driven sales strategy.
Step 2: Decide who and how to collect the data.
To avoid any possible mistakes during data collection due to miscommunication between different departments, you need to assign this task to someone in particular. In most organizations, the IT department is in charge of data gathering, recording, presenting, and storing.
However, you are free to choose any department to handle this job if they have the needed resources to perform these tasks. It's also acceptable to create a new position inside a certain team specifically for sales data processing. The main thing at this stage is to ensure that whoever is in charge of this important task has all the essential tools and knowledge to complete it.
When assigning data handling to an in-house team, you have to also remember about the data quality. The impact of low-quality sales data is dramatic. You are risking wasting your team’s time without getting anything in return, losing large sums of money on inefficient decisions, and even harming your company’s reputation by reaching out to the wrong people.
As the biggest contributor to data inaccuracy is a human error (49%), make sure to automate most processes with the help of sales automation tools and minimize the chances of a mistake.
Step 3: Make the shift to data-driven solutions smooth and gradual.
Applying even the smallest modification in the company’s workflow takes a lot of time. Changing the entire approach to sales requires even more time. Building a data-driven sales approach means not just coming up with the perfect strategy on paper but successfully implementing it in real life. This might include restructuring the entire sales department, educating your team from scratch about new technologies, tracking their progress, and searching for a weak spot in your sales cycle to work on.
Don’t expect to have the completed strategy being ready to go in a couple of weeks. Data-driven sales is about constant improvement and the search for new solutions. The more time you allow yourself and your team to adopt the data-driven sales set of mind, the more thriving the results will be. Don’t rush this process but better encourage your team to use data for sales step-by-step.
Step 4: Review the data collected by your team already and scale it.
You might not even realize this, but if your team uses customer relationship management (CRM) tools, you’ve already started the process of data collection. The voice messages you’ve left, the follow-ups you’ve sent, the meetings you’ve conducted, and the leads you’ve converted—all of this can be easily combined into a large dataset to help you get established with a data-driven sales strategy.
The better you tracked all your sales interactions before, the easier it will be to extract high-quality data from it. In fact, the top 3% of best-performing salespeople are more confident in their CRM data than their less successful colleagues. The pattern is obvious—the higher conversions you want to get, the better your data has to be recorded.
Unless your data is completely outdated, or you’ve developed an entirely new product for a niche market you want to conquer, you can always convert the data you already have access to into important insight about your sales routine and target audience. Define the data points your dataset lacks and complement them with the necessary information.
Step 5: Keep collecting data and track your progress.
The sales data collection process never ends. Once you start it, you have to keep doing it, searching for more incisive and thoughtful facts to improve your team’s operations each time. Thus, you can define what time and day of the week work best to send sales emails, how many interactions it takes to set up a discovery call, what industries purchase which products, and what sales activities drive the most results.
To ensure that your data-driven strategy drives results, you need to measure your progress with a help of a few main KPIs like conversion rates, customer acquisition costs, customer lifetime value, return on investment, etc. You are free to add any other metrics that are essential for your business to ensure that all sales operations are gradually developing.
Embrace the Power of Data for Sales
Data can become a very powerful tool in the hands of a talented sales manager. If you know how to read it correctly and how to extract valuable information out of it, you can open the door to completely new business opportunities in the digital sphere. With a well-implemented data-driven sales strategy, you can become a better company for both your clients and employees. Offer more personalized solutions, optimize your sales team workflow, drive higher conversions, and move with the data-oriented times of 2022.