There is no more denying it- we live in a world dominated by data. A recent GE survey showed that "61% of senior innovation executives now use big data to inform decision-making –that’s up from 53% in 2014." This demonstrates that the most successful businesses out there are using big data to make their decisions, and their numbers have only been growing since 2014. If you'd like to join them then you'd better do the same.
But how exactly do you begin doing this? Where do you start? It's one thing to say "you'd better start using data" and another to actually give the reader something valuable to do with that admonition.
That's what we're here to do. What follows is a step by step guide to analyzing the data coming in from your sales teams. We will tell you which KPIs you should be looking at and then give you suggestions about real actions you can take to start improving your bottom line with that information. We've pulled the following information from our own years of experience in the sales data analysis field as well as real stories from business leaders like you.
1. Start gathering your data
Luckily, this is the easiest thing in the world to do nowadays. Frankly, any digital CRM tool is already collecting mountains and mountains of data for you. This post is more concerned with providing you actionable insights on what to do with that information, but it's good practice to give all readers the right starting point- and that means collecting the data first.
But what if you don't have a digital CRM, are you out of luck? The short answer is yes. Investing in a CRM is an absolute must for the modern business. We'd recommend starting with the most prevalent CRMs out there- Salesforce, Hubspot, Oracle, and SAP.
2. Get the big picture with the following KPIs
In a previous post, we talked about the 5 KPIs you must be tracking. We didn't just blindfold ourselves and pick those KPIs at random, we chose them because they were the single best KPIs to give you a big picture.
Why start off with the big picture when this whole blog was supposed to be about giving you actionable insights? Because if you don't understand what is wrong with your big picture then you won't make the right kinds of actions to improve. It's like turning on the light before you find the thing you are looking for.
So look at these KPIs to get the best idea of where your sales engine is misfiring.
- Lead Response Time
- No matter what your industry is, look for a lead response time of under 24 hours. If you are over 24 hours then you need to revise your processes ASAP to start reaching out to leads within that time. If you can capitalize on every lead that comes through then you will undoubtedly see positive movement in your bottom line.
- Efficiency Ratings
- Here you are looking at which activities lead to the most won deals down the pipeline. What you need to do here is connect won deals to daily activities. The actionable item is obvious- do more of those activities that win you deals, and fewer activities that don't. This will greatly improve your daily efficiency and make the entire organization more profitable.
- Sales Cycle
- This is the biggest of the big picture, you are going to look at your entire sales process and determine how long it is, on average, from when a deal enters your pipeline to when it is either won or lost. The actionable item is less obvious- don't go making sweeping changes to your sales process before you look at all the facts. Bigger deals take longer to close than smaller ones, and your industry might have a longer sales cycle.
- Successful Steps
- This is a bit of a deeper dive- you are going to take the data related to how long each of your deals spent in certain steps of your pipeline and average that time out. Doing so you will discover which stage in your pipeline is holding up the works. Once you discover that your way forward to action is clear- you don't need to overhaul the entire sales process, just take it one step at a time. This way you waste less time and resources.
- Representative Outliers
- Here you are looking at the big picture of your sales teams. Which teams are succeeding and which are failing? Your actionable item here is simple: once you identify your top performers you use them as trainers for the rest of the crew. You will undoubtedly see more sales as a result.
3. Dive deeper with the following metrics
Okay, if you are looking at those KPIs you already have a number of data points and actionable items for them, but that's not enough. There are more actions you can take by interpreting the data you are getting from your CRM.
It comes in the form of looking for the following items in each of the following metrics. These are smaller items, but by taking action within each of these sales metrics you can improve your day to day operations and start seeing immediate positive impact on your bottom line.
- Specific Action Activities
- This metric tracks what actions each of your representatives are completing on a daily basis. Most modern CRMs track this information, and you can take action on it in a really simple way. By this point you should have already discovered who your top performers are- simply look at the action activities they are completing every day and make that standard practice throughout your organization. It's essentially a micr0-efficiency rating for each employee that can only positively impact your bottom line.
- Lead Flow
- Much like efficiency ratings and specific action activities focus your sales team on the performance of their activities, this metric focuses your marketing department. Marketing will be sending you data (likely from Hubspot or other CRM) about how many leads they are generating, and where they came from. With that information in hand the actionable intelligence is clear: make sure that your marketing team is focusing on the most fruitful avenues for lead generation and abandons less successful campaigns- saving you money.
- # of Qualified Opportunities Created
- However, simply telling marketing to focus on avenues that give the most leads is a bit too simple, and the situation is more complicated than that. What you really need to do is get sales and marketing together to talk about what makes a qualified lead. For example, a few qualified leads are better than a dozen unqualified leads- have your marketing department focus on what gives you qualified leads.
4. How to take action
Quite frankly, the action needs to begin with the VP or C-level. While many of these metrics, KPIs and actionable items can be taken by sales managers or VPs if the executive suite does not buy in to the project then any action taken is doomed to be minimal and transient.
Panorama Consulting writes "Without executive support, it can be very difficult to procure the employee resources that are needed to make a project successful. Only by having true buy-in to the project will executives understand the importance of ensuring the right people are available to make the project successful."
So how do you take action on the data that is coming in? Read steps 1-3 above and make sure that the initiative is starting from the VP or C-level executives. We've already given you the specific action steps you need to take to start turning your sales metrics into profits, but the VP or C-level is the key to making sure that the actions get taken.
5. Keep up the good work
Too often in our experience data analysis and interpretation are completed passionately for a week or two and then, as soon as things get difficult, the initiatives go by the wayside.
What you need to do in order to really turn your data into profits is stick with any data initiatives you begin. This step is closely related to step 4. When a data initiative comes from the VP or C-level and has a longer range view than just expecting returns in the short term then it has a significantly higher chance of success.
What we are talking about here is nothing less than changing your organization's culture to focus on using data more effectively. But what is an actionable step you can do to actually make sure that these initiatives will stay active within your culture?
- Gamify your data. Now that you know the metrics and KPIs, share them out with your teams to inspire healthy competition.
- Communicate your changes. Data works best when everyone knows it and has it to work with. Put your data in a public place in your office in an understandable format so everyone knows the day to day changes.
If you would like to dig deeper into your data, it starts with understanding what metrics matters most. Download our free guide "Sales KPIs that Drive Performance Outcomes" to find out.