The data is in on data-driven sales—and the results are clear: companies that integrate data into their sales process are more effective. In fact, statistics from Salesforce show that high-performing sales teams are 3.5X more likely to use a data-driven approach, and companies that integrate data into their sales operations are, on average, 6% more profitable than their competition.
With more data available to organizations than ever before, now is the perfect time for companies that haven’t yet taken advantage of this tool to leverage data in their sales process. Here are some of the benefits you can see from doing so, along with some advice on the steps to do it the right way.
Benefits of a data-driven sales process
The sales landscape has shifted in recent years. Businesses today often need to view sales as an iterative process, making quick adjustments and improvements in response to a changing market and shifting customer preferences.
Letting data drive your sales decisions can help companies to do this more effectively. Some of the specific benefits of using data in your sales process include:
- You’ll see better returns on your sales and marketing investment – Customer acquisition costs have skyrocketed over the last decade, increasing by 222% from 2013 to 2022 and 60% just in the last 5 years. Using data can help companies to make more informed, more targeted sales outreach, increasing the odds these efforts will be successful and making the most of the money you spend to attract and land customers.
- It’s easier to identify and avoid bad fit customers – Not every lead is going to be valuable or result in a sale. By analyzing customer data to spot trends and patterns, your team can focus their time and energy on the most promising prospects, improving their efficiency and productivity.
- You can get ahead of sales trends – If you’re chasing trends, you’ll always be one step behind the people at the front of the pack. Making smart use of customer data can help you to instead be one of those leaders who’s blazing the trail.
- You can identify hidden opportunities – From new markets you could enter to growing customer demands that you can meet, there are often a lot of ways that your sales process can grow and evolve—and, by doing so, can help you to grow your business.
- You’ll be more profitable – A report from McKinsey Global Institute shows that companies that make use of data are 19 times more likely to increase their profitability than non-data-driven organizations. This means that integrating data into your decision-making process can have a big impact on your bottom line.
Now that you know some of the reasons why data can be beneficial for improving your sales process, how do you go about leveraging that tool? Here are some steps you can follow to implement these kinds of data-driven sales process improvements.
Step 1: Clarify your sales goals.
There is a lot of data in the world, and not all of it is going to be valuable for every business or situation. Understanding what you want to achieve can help you pinpoint the right information to get you there.
This process starts by evaluating where you are currently. Review your current sales and revenue figures to identify the places you are most looking to make improvements. Once you have this information, determine measurable, actionable, and timely goals that you can set in those areas. This will help you to home in on the specific data points that will be the most useful, as well as which data sources are likely to be of most value.
Step 2: Identify which sales metrics are the best to leverage.
As we mentioned in the step above, knowing your sales goals will help you to target the right metrics to track and analyze. Not every organization will benefit from the same set of metrics—and, in fact, the right metrics to use can often vary on a case by case basis. This is why it’s a good idea to select the data points you’ll use in a targeted way, based on your current situation and what you hope to achieve in the future, rather than falling back on the same data for every situation.
Some of the most commonly useful metrics for improving a sales process include:
- Sales by lead source – This shows you which lead sources are the most productive for closing sales, and which ones are underperforming. Reviewing this data can help you determine which channels may provide the best return on further investments, as well as which offer the most opportunities to expand your market share in new areas.
- Revenue by product or service – Breaking down sales and revenue on a product or service level can yield insights into which of your offerings are the most popular and profitable.
- Market penetration – A company’s market penetration shows what percentage of the total potential market is already utilizing their product or service. This can be valuable for determining your overall position in the market, as well as identifying which markets offer the most potential opportunity for growth from further investments.
- Net Promoter Score – This metric puts a number on how likely your customers are to recommend you to others. It is calculated by subtracting detractors (people who actively advise avoiding your company) from promoters (people who suggest using your company) and can give you a sense for your brand’s overall standing and reputation with consumers.
- Average customer lifetime value – This figure tells you how much revenue you can expect the average customer to generate over the course of their relationship with your business, and it can be very useful in determining how much you should reasonably spend to attract a new lead. If your typical lifetime customer value is high, spending more to acquire a new lead can be worthwhile since you still stand to see a return on that investment.
- Revenue by market or territory – Breaking down your revenue by its source, either demographically or geographically, can yield valuable insights into which markets to target with future sales efforts. Combined with market penetration, it can show which markets or territories are currently underutilized and could offer the most opportunity, as well as which you’re well-established in.
Step 3: Gather robust data points.
The right place to source data to inform your sales process will depend on which specific metrics you are most interested in tracking and utilizing. In some cases, the best source for this information will be your internal records and systems, such as a CRM, where you can easily pull data points related to your past sales, revenue, and customer and prospect interactions.
In other cases, you’ll want to gather new data from the broader market, either to use on its own or in conjunction with internal data. For instance, you may find it useful to conduct market research to determine current demand shifts or trends in customer behavior that could inform your future sales efforts. Competitor research and analysis can also be a useful part of this process, particularly if you’re interested in breaking into new markets or increasing your market saturation.
Step 4: Analyze and visualize the data.
Data is not particularly useful in its raw form. In order to derive actionable information from it, you first need an effective system for comparing data points and bringing meaning and order to the chaos of information.
Modeling and visualizing data points using graphs, charts, or dashboards can be very helpful here. It can be difficult to derive useful insights from a large bulk of text-based data. Putting it into a visual format helps to clarify meaning, allowing you to easily spot patterns, trends, correlations, and outliers that you should investigate further.
Step 5: Implement what you learned (and track the results).
Using data to drive sales decisions isn’t just a one-and-done prospect. To capture the full potential of data for improving sales, keep gathering this information as you make improvements to your process. You can then analyze how it changed—or didn’t change—as a result of your efforts and use that to refine your sales process moving forward.
The bottom line is that data can be an exceptionally valuable tool for growing your sales and revenue and making incremental improvements to how you approach the sales process over time. The idea of integrating data insights can be confusing at first, but once you establish a strategy for identifying and gathering the right data for your needs, it can have a transformative impact on your sales success.
