Making Strategic Decisions Utilising Sales Data ( Analytics )
Mark Lenthall
Chief of Sales, Director of Sales, Chief Revenue Officer - 20+ years in Sales & Business Leadership - Sales Innovator | Revenue Driver | Business Optimiser
How to Look at Sales Performance in a Different Way and Put Your Company on a More Strategic Path
Sales analytics is generally viewed as a single-purpose toolset and process for informing tactical sales decisions.
Most often, these analytical tools and processes are only being used to estimate financial results, measure budget attainment, identify deals that are “stuck”, zero-in on additional sales opportunities, and measure sales performance over time.
After all, that’s what the tools were designed to do, and that’s why the company implemented them in the first place.
But while these tasks are certainly valuable and worthwhile, they aren’t the only things these toolsets and processes can do. In the right hands, sales analytics can serve a very different purpose—a much more strategic purpose.
A Shortage of Strategic Decision-Making in B2B
The concept of strategy and strategic decision-making is sorely misunderstood in many B2B companies today.
?Some companies think strategy is about creating budgets and forecasts.
Others think it’s about sitting in room and filling in the blanks on a “Mission, Vision, and Values” template.
Some even think that any decision made by an executive is a “strategic” decision.
And still others believe that strategy is too complicated and time-consuming, preferring instead to cross their fingers in the hope of eventually finding their way, through trial-and-error in the marketplace.
As a result of these misconceptions, there are a lot of companies that either don’t have a strategy at all, or they have one that is completely meaningless and practically useless.
But strategy doesn’t have to be complicated.
At its core, strategy is simply a matter of answering some fundamental questions about what the company should be doing to become even more successful in the future.
It’s about figuring out where the company should focus its limited resources in order to serve customers better than the alternatives, and be financially-rewarded for doing so.
Now, people can ask and answer these fundamental questions using conjecture and opinion—which basically amounts to nothing more than guessing.
Or, taking a better approach, they can leverage their in-market performance data to provide a lot more objectivity and accuracy.
And where will they find some of the most telling and informative in-market performance data? In their sales analytics toolsets, of course.
Turning to Sales Analytics for Strategic Insights
In reality, sales analytics is one of best sources for information to improve a company’s overall strategy.
Why? Because sales performance is the ultimate signal as to what’s working and what’s not. In a sense, sales performance is a strategic scorecard.
When you think about it, everything a company does to serve customers and differentiate themselves from the competitive alternatives all comes to head when the prospective customer has to make a purchasing decision.
From product development and marketing through sales, delivery, and customer service, the ultimate test of every decision and every action is whether or not they result in profitable sales growth.
To be blunt, any company can rack up sales at money-losing prices.
And conversely, any company can command big, fat margins while closing just a miniscule number of sales. But it takes a real strategic competency and competitive advantage to be able to grow sales and margins, both at the same time.
For established companies, sales performance can act as a guide, highlighting where your company has real strategic advantages that can fuel even greater success into the future.
At the most basic level, strategy can be boiled down to making decisions about two things:
And the best strategic combinations of these two things are those where your company has competitive advantages that enable you to win a disproportionate share the business, at higher margins and levels of profitability.
Certain Performance Characteristics Are Telling
In many companies, sales analytics functions were initially established to help correct something that was deemed to be broken, or to bring rigor to something that was deemed to be out of control.
领英推荐
As a result, it’s somewhat typical for sales analysts to focus most of their time and attention on the “problem children”—i.e. identifying pipeline outliers, investigating sub-par performance, analyzing questionable deals, and so on.
To fuel strategic decision-making, however, you’ll want to look toward the other end of the spectrum—i.e. what’s working, rather than what’s broken.
Again, the areas that are working well, somewhat naturally and without a tremendous amount of intervention, can be indicative of your company’s strengths and advantages in the marketplace.
So you’ll want to identify the customer/product combinations that have the strongest blend of growth, margin, and magnitude:
Essentially, you’re looking for customer/product combinations that are somewhat significant in size already and showing signs of continued growth, where you’re able to win business at better-than-average margin levels.
The Best Recipes Often Have Common Ingredients
Once you’ve identified the best-performing customer/product combinations along the dimensions of growth, margin, and magnitude, you’ll then want to analyze the composition or definition of those combinations. Essentially, you want to look for the meaningful commonalities that exist in the composition of the high-performing combinations:
While you may have identified dozens or even hundreds of top-performing combinations, this type of deconstructive factor-analysis allows you to see the commonalities that exist between them.
And in doing so, it can effectively reveal your company’s strategic “sweet spot”—i.e. the best customers to target, and the best products and services to offer them.
Execution: Doing More of Whatever Is Working
With a data-driven and performance-validated understanding of your company’s real strategic sweet spot, you have a basis for aligning resources and activities toward those customers and offerings.
Sales, marketing, and service activities can be focused on acquiring and serving more customers like those you’ve identified. Product management and development efforts can be focused on going further with the types of offerings you’ve identified.
Simply put, once you’ve figured-out what’s really working, just doing more of it can be a very sound and pragmatic execution plan.
You should be aware, however, that the sweet spot(s) that you’ve identified may be different than what your company has traditionally believed.
There’s a tendency for companies to believe that their sweet spot is around whatever is generating the most revenue and volume today—even if it’s not very profitable, differentiated, or sustainable. And companies will tend to hold onto these beliefs and perspectives until one of two things happens:
Obviously, the former is far preferable to the latter. And by leveraging sales analytics in this way, you’ll be able to develop the credible evidence needed to foster a more productive and lucrative strategic perspective. It’s simply a matter of asking some slightly different questions as you analyze the data.
Our mission here at the Predictable Success is to research and disseminate leading-edge practices and innovations in sales operations.
Predictable Success accesses a world wide community in which we bring together B2B sales professionals to help navigate a rapidly changing world by sharpening sales skills, enhancing?strategies and practices and providing a system for personal and professional growth so that sales people can make more money, be more respected,?be more recognized, and more influential.
?So we’re always learning about different approaches, new technologies, changes in focus and priorities, what’s working well right now, what’s not panning out anymore, and so on.
Other people can teach you to sell.?We enable you to sell better!
These processes have worked with many of my clients for years and this systematic and disciplined approach has been a critical component to their success
The GOAL of every high-performance sales team should be to…… Proactively create the conditions where more deals, that are more profitable, with better customers, are the natural result.
This is achieved by engineering the overall sales process such that it reliably generates the desired outcomes as a matter of course.
Predictable Success can examine your sales processes and deliver an accurate road-map after determining where you’re on track and where you need a course correction and can provide a cost/benefit analysis and expert recommendations to improve your sales performance on every level.
Want help designing customised sales strategy road-map want to deliver predictability, consistency, revenue growth and sustainability to your sales operations, call for a chat on 0432 622 744 .