Last weekend I read the book “Data Driven: How performance analytics delivers extraordinary sales results.” by Jenny Dearborn (a leading authority on sales enablement and training, with expertise in big data and predictive analytics), and I thoroughly enjoyed the reading.
The book introduced me to some of the most important variables when measuring sales success. Now I have an overall idea of how the different units of a business relate to sales, and I’m familiar with the variables that have a bigger impact on the sales reps performance.
Moreover, by analyzing the example given in the book, I learned how different data analytics tools can be applied with the objective to increase business revenue.
In the last section of this post, you’ll find a set of slides that summarize the steps taken to implement a complete data analytics approach in sales.
Data Driven: How Performance Analytics Delivers Extraordinary Sales Results, aims to be a practical guide on how to apply data analytics to increase sales in your business by improving sales rep performance.
It’s a very engaging book. Each chapter starts with a fictional story and ends with a section of analysis, comments, and practical suggestions to enable a solution for the problems presented.
The story is about the fictional company called Trajectory Systems. Trajectory had a few years of continuous growth in revenue, however, in the past year, the number of sales started to show a flat-line, and at certain point, they even started to decline alarmingly. A new Chief Sales Officer is hired to turn the situation around.
As it’s expected from the title, data analytics will be the hero of the story. The important takeaway is how to implement this approach.
The story starts in a conference room. The CSO is meeting with seven members of her leadership team, the directors of the departments of: sales enablement and training, sales, presales, sales operations, development, marketing, and HR.
The director of sales operations introduces tables and charts, giving an overview of sales rep performance, rep booking distribution, and pipeline performance. All the numbers are discouraging.
Then the blame game starts. Everyone has somebody to blame for the poor performance of the company. This is a schematic of how the different divisions accused each other:
What I found fascinating is how all departments are related and how, in the end, all of them could measure their results regarding sales effectiveness.
One of the problems that the author highlights in the example is that the departments are measuring efficiency, when what they should be looking at is effectiveness. E.g. in the story, the HR business partner judges his performance on how efficiently he fills job requisitions, but he doesn’t know how individual reps are performing after they’re hired.
Why increasing budget may not be the best solution
At Trajectory, the first solution proposed to increase the number of sales is to increase budget.
- The VP of sales asks for more sales reps. He also demands more and better qualifying sales leads from marketing and more features in the company’s products.
- The director of presales asks for a bigger budget to hire more presales consultants so she can give the VP of sales better service.
- The VP of product development claims they’re understaffed. Also, he suggests that they should give the reps a better training on the competitor’s products so they can sell against them feature by feature.
- The director of marketing thinks they should improve their win rate, do a better job at segmenting the market, and create a specific message for each segment; all of which he could do if he had a bigger budget.
- The director of enablement and training thinks the most important is to improve the on-boarding process for new hires since the numbers show that the ramp-up is too slow. If they’re going to increase budget, it should go to enablement.
- HR thinks they should look at the sales management approach since they’ve been having a lot of negative comments in the exit interviews.
When the CSO analyzes the option of hiring more reps she realizes it’s not the best solution for a number of reasons:
- it is expensive,
- they already have too many sales people not meeting quota,
- it takes a long time for new hires to ramp up.
The CSO thinks that the real key to increasing revenues at the company is to improve rep performance. She decides to focus on making the reps they already have more successful, and for that, she decides to take a data analytics approach.
Alternative Solution: The Data Analytics Approach
The following slides summarize the steps taken in order to implement data analytics to improve sales rep performance, and ultimately reach revenue success.
This example fills me with excitement! So many applications for data analytics! So much more to learn!