Accelerating Organic Growth with Sales Analytics – Intelligent Sales and Profit Acceleration #4
As companies build their plans for growth in this new year, it’s a good time to leverage sales analytics to build actionable sales goals. Sadly, for many distributors, sales planning has historically been anecdotal, intuitive and virtually data-free. Aside from knowing what a customer (or group of customers) bought last year, and then guessing at how that might change this year, there is painfully little insight to identify, organize, drive and measure the daily activities that actually accelerate profitable, organic growth.
With a new generation of data-driven sellers, however, the competitive landscape is changing. Many distributors are seeing the benefits of leading this change by leveraging data to grow their business.
How Sales Analytics Impacts Account Penetration
To improve growth and gain revenue and market share, sales teams need data-driven insights to improve new business generation as well as account growth and retention. Analyzing the existing data collected about your sales behaviors helps you recognize any gaps in your processes and gain insight. With these analytics, you’re able to prescribe or make recommendations for improvement. This is prescriptive analytics.
There are opportunities to use prescriptive analytics with three categories of customers and eliminate profit-draining activities.
- New Customers:
- What’s being done: Most sales teams neither define nor measure success around a seller’s new-business results. They also fail to support them with analytical targets and complementary prospecting training to consistently and successfully hunt. This results in call aversion and complacency.
- What’s better: Lead generation from vendors or the company’s sales and marketing team are best-fit prospect prescriptions for the outbound-calling and hunting sales teams.
- Existing Customers:
- What’s being done: Most sales teams fail to either provide the prescriptive tools or fail to define or measure success around account-penetration. They also fail to support sellers with the analytical insights and complementary account-management training to consistently farm. This results in customer cherry-picking and potential defection.
- What’s better: Grow share of wallet (SOW) at the transactional or account-management level to improve average order value, market-basket diversity, and overall account penetration and stickiness. Growing SOW requires providing sellers the insights — in workflow tools, such as CRM or order-entry — to upsell, cross-sell, replenish or boost overall customer consumption.
- Defecting Customers:
- What’s being done: At best, salespeople look for subjective clues about customer behavior, and review purchase history to confirm if troubling patterns seem to be appearing for a given customer.
- What’s better: Beyond proactive account management skills and processes, sales teams need early warning systems to identify and engage customers who show declining vitality statistics and increased risk of attrition.
Actionable Sales Analytics Guide Sellers
Some companies have tried over the years to provide their sales teams with the insights needed to impact the dynamics of growth, but the results don’t always come to fruition.
Many power users have tried to email their sellers spreadsheets and similar information to prompt them to identify and execute on the prospecting and existing-account nurturing or order-boosting actions needed to accelerate growth. They have spent even less effort on triggering early warning about defecting customers or early prompting to nurture new customers.
As a result, there are three key reasons why these efforts have failed to produce scalable, profitable, organic growth.
- First, salespeople are not librarians. They enjoy being in sales because they are energized by engaging with customers, not immersing themselves in tedious data. If we are to help them sell more, we need to provide prescriptive analytics that break down the necessary activities to the smallest unit of action possible: Talk to Customer X about (and ask for) Y. Present this prompt in workflow. Gamify. Track and reward execution. It’s the difference between giving someone an atlas and asking them to page through and figure out their route — and giving them a GPS that says go here, then there, then over there…you’ve arrived.
- Secondly, depending on whether the opportunity is transactional or relationship-based, we need to make sure sellers have the complementary product knowledge, skills training and playbooks to successfully execute the prescribed campaigns.
- Finally, it bears mentioning that all of the above prescriptive sales campaigns need to filter out prescriptive actions that will predictably reduce the profitability of the business. Do you really want to acquire profit-draining new accounts, sell more profit-draining products to existing profit-draining accounts or rescue defecting profit-draining accounts — due to adverse payment terms, cost-to-serve, pricing, returns, broken-box, credit-card fees and so forth? Of course not. Sales analytics need to suppress unprofitable recommendations and prioritize actions that accelerate profitability.
Organic Growth Is Complex, Yet Possible and Rewarding
The dynamics of profitable organic growth are both simple and yet complex. They are simple in that they broadly cover just three buckets of customer situations. They are complex in that they must be identified, filtered for profitability, prioritized, democratized and presented in workflow in bite-size, accountable actions. And, they must be supported with complementary product and skills training, coaching and sales management operating systems that complete the sales enablement puzzle.
So, yes, you can grow faster than market — likely 5–10% or more — if you can help each of your sellers advance one quintile within their peer group. Provide your sellers with the tools, training, processes and management to succeed, and you will outperform the market. New year, new tools, new behaviors, new outcomes. Happy New Year!