Using Numbers vs. Gut Feeling in Sales
Every year, companies create a marketing plan and budget for the current year’s activities (ours included). They would spend money to create more awareness for their branding in the hopes to ultimately bring in more sales. The problem is that most companies don’t know which marketing campaign is bringing them the most return. This is especially true in Asia; most companies repeat their marketing campaign because they would say “it’s a tradition” or “last year we had it so we should have it again this year” even though they don’t know if those campaigns are bringing them any returns or not.
For example, big exhibitions are held in Jakarta every year in the field of Information Technology (Indocomtech, Tech in Jakarta, etc). Most companies join those exhibitions just because their competitors are there as well or because they want to have their presence felt. Everyone hopes that it would help increase sales however no preparations are made to analyze or evaluate whether joining an exhibition will accomplish this or not.
The problem is that they don’t know how to analyze the data (not that they don’t have it!). Data is everywhere – but meaningful ones are rare. Today, information and insights derived from data are changing the world in every way possible. Using different tools can help you understand what’s going on in different things (in the example – whether it is worth it to join that exhibition). Data and analytics are already changing how sellers sell but we are only at the tip of the iceberg. We call this changing trend the “science of sales”.
Numerous people like to talk about how sales are just about grit, focus, determinism and your gut feeling. Those things are important but there is now a new way to ensure further sales success—utilizing the data that you have and transforming them into readable insights.
The idea is to track marketing campaigns and leads with extreme precision. The logic is simple: if you could track and analyze your leads (prospects), you can start predicting where you can find more revenue. For example, if you know that joining an exhibition will bring you more quality leads than a magazine ad therefore you should put more money, time, and resources into that exhibition. The implication is that sales process itself needs to change. Sales process and salespeople would need to be more organized in capturing data and make the process more efficient.
Here are 5 steps to start using science in your sales process.
1. Proper storage of your database
You probably have a lot of prospect list in your database. The question becomes: where are you storing them?
If you are storing your leads manually like most people are (ie. in your notebook or in Excel), then you are setting yourself up to fail. The more leads you have, the messier your excel file will be. You cannot neatly write updates on your leads. I’ve seen a company whose excel file has 15,000 rows and 24 columns (that’s A-X in excel!). It is confusing as to how the manager or the team could know which leads to follow up. Furthermore, these databases are probably offline – meaning that it’s not easy to share these data to other people in your team.
The solution is to implement a small system. You could use Google Drive for starters; it will help you to at least easily share information with other people in your team. Ideally, invest in a CRM system that would make your life easier.
2. Clean your database
Once you have properly stored your data, it’s time to do some housecleaning. If you have a database that’s been around for more than 2 years, chances are you need to do some updating. Most of the data would be invalid by now – a change in phone number, a change in the contact person, different address, and others.
Delete unnecessary data. If you find a lead that is outside of your target market, delete it to make your database as accurate as possible. Categorize your database to make it easier to search. A good CRM system does this for you already.
3. Set and measure results
Once your database is up to date, it is time to set and measure results. If you don’t put a clearly defined target for your sales team then there is no benchmark to go off from. Let your team know what you expect from them. These can be:
- Weekly number of leads from different sources.
- Weekly number of opportunities from different sources.
- Number of opportunities with >60% probability.
- Leads-opportunities conversion %.
- Number of calls per day.
- Number of meetings/events per day.
- Total revenue per month.
These are just examples of what your KPI (key performance index) can be. With these set, you can now start measuring the effectiveness of your sales team.
4. Align sales process
Once the target is set, it is time to create a sales process. This will vary with the nature of your business. An example can be:
- Input data into system (determine which information are mandatory).
- Change status to “contacted” once a contact has been made.
- Change to “qualified/unqualified” (determine what counts as “qualified” and “unqualified” leads).
- Follow up leads and change their probability as leads progress. You need to equate different stages of a lead to probability percentage. Example: 30% probability if you have “determined decision maker”. 50% probability if you have “sent proposal”. 85% probability if you have “sent draft contract”.
- Close leads/opportunities and mark them as “won” or “lost”.
If you have done steps 1-4 regularly, you will be able to create usable reports to analyze and determine your next marketing strategy.
For example, you could analyze how many leads you receive from a particular source. Like the example above said, if more leads come from an online advertisement than from a newspaper ad, spend more money on the former. If most of the opportunities were leads that came from joining an exhibition, then focus your marketing campaign on the exhibition. This will create a habit of making decision from numbers and not just from your gut feeling. You could potentially save lots of money from not spending on a campaign that doesn’t bring you much result.
So where does this leave us?
These changes are not difficult to make and can be done incrementally. Start from cleaning your database hundreds at a time. Talk to your team and convey the target you’d like them to achieve. You could provide some creative incentive if they achieve their target (ex. dinner, movie tickets, water rafting activity, etc). Most importantly, you need to start to look at the numbers and what they are telling you. You will likely need some tools to help you do this effectively but the rewards are apparent and are continuous and substantial.
Business is always changing. What worked for you yesterday may not work for you today. By making your decisions based on data, allow yourself to deal with the current reality of things and become a company that would stand the test of time.
Is your business committing the same sin of ignoring the numbers? Do you even have the proper tools to create structured data that can be converted into meaningful information? Do you agree or disagree? Let us hear your thoughts and send us an email to firstname.lastname@example.org.