It often feels nowadays that you can’t turn anywhere without tripping over a Big Data message. Everybody seems to be jumping on the bandwagon. And there’s no doubt that big data is going to be important.
But if we’re setting priorities, I just have the sense that we could do better by making smarter decisions with the (relatively small) data we already have, or could collect if we set our minds to it. I think it's clear that our sales pipeline management and sales forecast accuracy could benefit tremendously from better data.
Smarter decisions, better choices
For me, the benefits of data driven selling in complex B2B sales environments are less about making deterministic predictions than they are about making smarter decisions regarding strategy and resource allocation that increase our chances of success.
If we're measuring and interpreting the right data in the right way, it ought to focus our attention on the things (and the choices) that could make a significant difference to our ultimate performance.
In many ways, this is a process of pattern recognition. All we have to do it to know which patterns to look for, and to develop a clear sense of how we should interpret and act upon what we uncover.
I’m going to assume that you’ve got the basics of overall sales pipeline value and volume mastered, that you can measure both by stage, and that your sales people are reporting these things accurately. If not, you really must get those foundations in place.
If your sales people can’t be relied upon to report on these things accurately, then frankly that’s more to do with corrupt data than it is big, small or smart data. You have to confront that issue - and show them that they benefit from accurate data just as much as you do. Call it enlightened self-interest
So what else ought we to be measuring?
Deal velocity is a strikingly effective indicator (not necessarily a predictor) of the likelihood that an opportunity will close. Research by the TAS Group and others has proved empirically what most sales managers know instinctively - that the longer a deal has remained at a given stage in the cycle, the less likely it is to ever close.
Start by looking at the progress of your winning opportunities over the past 12 months through the key stages in your pipeline - use this data to establish a benchmark. Compare all your current opportunities against these data points, and pay particular attention to those that have been “stuck in stage” for longer than normal.
The shape of the pipeline
I’ve written before on this subject - you can read the original article here. As well as average deal velocity (above), we’re interested in the stage-to-stage conversion percentages from the beginning to the end of the cycle.
Sales pipelines (actually the funnel analogy works better in this instance) that retain a large percentage of qualified opportunities until a late stage of the cycle, only to lose to competition or to “no decision”, are inherently inefficient. If you’re likely to lose, it’s always best to lose early.
Take a careful look at the characteristics of opportunities that are “lost late”: what could you have looked for earlier in the sales cycle that would either have enabled you to qualify out earlier, or adopt a more effective sales strategy?
Compare, contrast and learn
One of the real benefits of this sort of data-driven selling is the ability to compare, contrast and learn across different combinations of product, lead source, customer type and sales person. What are the factors that have the strongest connection to the ultimate outcome?
How can you encourage more of the effective behaviours, and progressively eliminate the unproductive ones? What can you learn from the winning habits of your top sales performers? If you’re not collecting the data, and you don’t ask the questions, the answers will remain hidden - and you’ll be missing some powerful opportunities to systematically improve your sales performance.
How are you using smart data to improve your organisation’s sales performance?
BTW, if you haven't already done so, can I suggest you take a look at our guide to the 10 winning habits of today's top performing B2B sales and marketing organisations? I think you'll find the ideas interesting. You can download a copy here.