The Hidden Advantages Data-Driven Sales Teams Have
Entrepreneur's New Year’s Guide
The first sales pitch I ever delivered went surprisingly well. For hours, I agonized over what to include in my email until I mustered up enough courage to hit "send." Within the hour, my prospect responded, and before the week was over, we had our first exploratory call.
By the month’s end, I had sold a quick four-figure monthly contract.
This seemed unbelievable. Had I somehow found the perfect formula to sell my services?
I decided to test this theory by replicating it. I turned my original email pitch into a reusable template and repurposed the questions I had, to turn my first-client-sales-pitch-ever into a standard questionnaire I shared with future prospects.
To my chagrin, I wasn’t able to maintain my "100 percent close rate." In fact, my first business deal had been a fluke. Using the same subject line and email, I was unable to attract new customers.
When I analyzed my template’s performance, I noticed that my email had only a 25 percent open rate. Beyond that, about one in three recipients responded to my request for a call. Yet, even with that, none were willing to purchase the services I offered at the time.
Dismayed but not deterred, I decided to try a few different approaches. I used warm LinkedIn introductions, Twitter outreach and cold calls to connect with new leads; and I shared unique pieces of sales collateral to persuade prospects to purchase.
Roughly 400 pitches later, I had discovered that the combination of Twitter outreach, targeted case studies and mid-day phone calls was the most effective way to secure new business. Using data, I identified the sales strategies that yielded the best results.
Of course, this was a small-scale effort. But for companies with more than just one salesperson, clever use of data can have a profound effect on overall sales performance.
Below are three practical ways salespeople can utilize data to improve their sales efficiency and effectiveness.
1. Reallocate sales efforts.
Smart sales teams use data to find predictable, high-impact patterns for sales success. To do this, they dive deep into their analytics. Unfortunately, this is not the case for everyone. “While many teams have basic metrics to determine rep performance, most aren't tapping into data to determine which prospects they should spend time on, or how to enhance existing customer relationships,” business journalist Lauren Horwitz has written.
Indeed, some salespeople fall into the trap of treating all leads equally. This occurs even when there is clear data indicating that the majority of their time is being wasted on contacts that may never convert.
A 2014 survey from Implisit found that leads from customer and employee referrals converted 3.63 percent of the time for the study sample, compared to website leads, which had a 1.55 percent conversion rate. Webinar leads, meanwhile, converted at a meager 0.44 percent rate. In this instance, the data showed that sales organizations should allocate more time toward sourcing, engaging and nurturing referrals from customers and employees.
2. Benchmark sales performance.
Sales managers often benchmark a rep’s performance against that the rep's coworkers. In turn, those sales reps measure their own success using an internal leaderboard. Yet these actions can create a competitive and uncooperative atmosphere among salespeople.
Instead, upper management should compare internal data against industrywide benchmarks.
For example, Tenfold’s 2016 Mortgage Lender Follow-Up report discovered that the mortgage lenders studied, attempted, on average, nearly nine follow-ups over the course of two weeks. The most aggressive lender sent out double that amount, while the least aggressive lenders made only one attempt to reach out.
The data also revealed that lenders who sent more follow-ups to prospects were more likely to have a higher market share. That said, biz-dev professionals and sales reps in the mortgage lending industry should aim to increase their follow-ups to a minimum of nine if they hope to stand toe-to-toe with or outdo the competition.
3. Identify upsell opportunities.
A fatal flaw among many companies is an over-reliance on a limited number of high-paying customers. At the same time, they may be in denial about the fact that they would be better off spreading more of their earnings across a larger client base.
Growth strategist Dev Tandon has explained: “Everyone on your team knows who your big buyers are. Your reps assigned to these companies already take good care of these accounts (or they definitely should be). However, major sales opportunities are often hidden within small accounts -- customers who order sporadically and/or very little at all.
"What’s keeping them from purchasing other items to bulk up their orders?" Tandon continued. "Have your sales reps managing these accounts conduct a structured interview process to gather key data insights on why they don’t spend more with your company.”
With most of your customers, you likely leave a ton of money on the table. Run an audit of your client roster and their spending habits to identify customers that may benefit from other products you sell or more of the same services you currently offer them. This will allow you to increase your average deal size.
Added Tandon: “Pair this with sales data analysis within your commercial data to develop enhanced customer-segmentation models and determine which products to leverage for cross-selling and upselling strategies. By increasing your 'share of wallet' for smaller accounts, you can drive more sales quickly for sustainable revenue and margin growth.”
Ultimately, you will want to make data collection and analysis a priority for your sales organization. After crunching the numbers, you are guaranteed to uncover new and unique ways to grow your business.