For company leaders, the phrase ‘working on the business, not in the business’ should be a familiar one. Working on the business covers the strategic side, where management focuses on the longer-term outlook for the organisation. The alternative is to work within the business, dealing with the tactical challenges that exist in running the business, such as driving the sales process or managing existing customer relationships.
These issues exist for the sales leadership function, as well. On the one hand, planning and strategy sessions can help the sales team ensure that its efforts and focus are concentrated on the right places. On the other, getting directly involved in current sales opportunities can be essential when converting that potential business into revenue. Getting the right balance is difficult, particularly when short-term targets and goals are looming large.
Recognising this problem is the first step on the road to getting the most out of sales reporting and analytics. By knowing the needs of different members, the sales function can improve overall results across the team.
Step #1 – Bringing all the right data together
This might seem like an obvious step, but sales is not as simple as it once was. Many applications can hold data that is vital to the sales team.
Applications such as Customer Relationship Management and Quote To Cash will be used every day by sales team members as part of their work. These applications will hold vital data around day-to-day activities and results. However, looking at this activity on its own will only provide so much value back to the sales leadership team. Instead, it is important to look at the whole sales process from marketing engagement to revenue.
Taking information from Marketing can help show how many and where leads are being created, as well as demonstrating how successful the Sales and Marketing teams are at converting interest into pipeline. Similarly, using data from the Finance and Operations teams can show how well Sales is doing at converting opportunities into paying customers.
Getting all this information into one place does not mean comparing spreadsheets, or cutting and pasting data, but instead enabling sales professionals to intuitively explore his or her data themselves. This use of analytics can help everybody on the team get better insights and results, regardless of whether they are working in Sales or on Sales.
Step #2 – Aligning across the business
So the Sales team now has data on what’s working, and what’s not. Going further, this can become an opportunity to improve the whole customer acquisition process. The use of the term ‘Sales and Marketing Alignment’ has been bandied about for years, but getting both teams to really work together is often more difficult than it sounds.
The reason for this is that both departments usually have their own goals. While these should be aligned, they can often result in real-world distractions rather than collaboration. For example, having Marketing focus only on the number of leads generated can result in lots of the wrong type of prospect being put into the pipeline. Preventing this often leads to Marketing targets being based on ‘Leads accepted or qualified by Sales. However, this also can lead to arguments between the two teams on what constitutes a qualified lead in the first place.
For Sales leaders, this state of affairs is not just unacceptable – it’s positively wasteful. To solve this, it’s worth looking at providing an overall metric on which both teams can collaborate and strive to achieve. Getting this right will depend on what the company sells and how the business model is structured, but this approach will help remove some of the friction that exists between teams.
Each department may have its own targets and goals that will be rolled up into this overall metric. Marketing may still look at lead volume while Sales will look at revenue targets. However, both teams will be more than aware that they can no longer point to just their own figures as evidence of success.
This can include analysing what the ‘right customers’ look like in the first place. Asking which customers are the most profitable for the business or which industries convert at higher rates will help focus Sales and Marketing activity where it can produce the best results. Using existing customer data can show where it is easier to sell, based on criteria such as company size and market sector. For example, retailers may buy stock much quicker to close than manufacturers or companies involved in pharmaceuticals. Gearing campaigns to this vertical market may, therefore, result in more revenue achieved for the same amount of effort and time.
Step #3 – Getting insights out to the business
This information provides real value back to the Sales team in terms of ensuring the most return on effort. It can be simple psychology within the Sales department. If a Sales professional thinks that he or she is much more likely to be successful in a deal, this can create better chances for success in the first place. It can also be used to dispel myths. Many sales organisations will have perceptions that are not backed up by the data.
However, this information can also be shared with the broader management team within the business, as it can help define Sales goals and metrics. Information on target markets and specific sector success can be shared with the CEO and the Board. This can and should help guide their decision making, too.
For example, a company may be targeting large enterprise deals because of the revenue opportunity and size of the deals involved. These big deals can have a material impact on how successful a business is. After all, more money in equals more profit, right? This strategic decision would lead to gearing Sales and Marketing campaigns toward these large enterprises.
However, selling to small and mid-sized businesses may actually be more profitable over time. The cost of customer acquisition may be lower, while ongoing maintenance and support costs may also be lower too compared to those large enterprise customers. Over time, signing a higher volume of smaller deals can therefore add up to more profit. However, without the right data in place, this can be difficult to spot and ever harder to justify. For companies selling to smaller businesses, the opposite might be true. Focusing on higher value deals rather than volume may provide higher profitability.
For Sales leaders, being able to influence company strategy and decisions can help them achieve future goals and targets. Too many times, these decisions can be made without getting insight from front-line Sales staff. Using data, sales can help the wider company management team make better decisions.
This might seem to be a world away from the day-to-day activity of prospecting and selling. However, getting the right data in place can ultimately make it easier for both front-line Sales professionals to feel confident in their work with prospects, and assist Sales leadership in directing those efforts. Effectively, better use of data can help Sales combine that ability to work both in the business and on the business. By looking deeper, Sales can lead the business to greater success.
The preceding article was originally published on April 25, 2016 in Sales Initiative.