Sales Data 101: Enhance Your Sales Process and Boost Revenue

Collecting sales data

Manual information gathering in a spreadsheet is one option; however, opting for customer relationship management (CRM) software allows for a much more convenient tracking process.

Depending on the scope of your business, spreadsheets can help save money, but if you're dealing with a large number of leads on a day-to-day basis, it will cost you more in resources in the long run.

Let's take a look at some of the key differences between spreadsheets and CRM.

Spreadsheets

First things first, spreadsheets are free to use, and you can make certain configurations to automate some of the calculations.

However, all of the information input is manual. Therefore, it's only viable in terms of time and resources when the business is very small and does not have to deal with huge numbers of leads.

But even then, every single detail about the leads must be noted for efficient collaboration between both sales leaders and reps.

After all, sales decisions that directly affect revenue are going to be made based on the data entered. There is little to no room for error.

CRM platform

CRM is a piece of sales technology that is fundamental to fueling a data-driven sales team. Sales reps no longer need to enter data manually since CRM records and collects all interactions between a sales team and a lead.

It provides information on the success of your automated email campaigns, cold call success rates, lead generation channels, and more.

Sales data analysis is a lot easier with a CRM platform in place. Using existing data, you can find the weak spots of your sales process or find a way to revitalize cold leads and potentially close them.

Sales data helps focus on the improvable parts of the process; therefore, collecting it in superior sales software is worth the cost.

How can your sales team use the collected data?

To say that a data-driven sales team provides a competitive edge against the competition is an understatement. There can be no comparison between a sales team that uses sales data and a team that doesn't.

In this section, you will learn why.

New business opportunities

Sales data brings new opportunities to the table. A couple of examples could be upselling and cross-selling.

You can find these opportunities by reviewing the clients' budget and purchase history. If your company released a product that has similar benefits to the product your prospect purchased before, you could contact them and offer a new and improved solution.

Without sales data, you couldn't navigate these waters and wouldn't be able to identify what's what.

Portraying an ideal customer

Identifying prospects that fit your business is crucial to sustaining a good sales team morale. Selling to unfit customers is bound to result in an increased percentage of churn rates, waste of resources, and unfulfilled company goals.

If you're selling software products, you can use technographic data to check the prospects' current tech stack to see what they're using right now and if they could benefit from your services. Once you have the right data on their technological capacity, you can move on to check their size and determine whether the prospects' budget aligns with your pricing.

Firmographic data helps to track the revenue of the new prospect. Firmographics on companies work in a similar way to demographic data on people. It shows key company identifiers that allow you to determine the fitness of the company as a client.

You can see how much revenue they generate, the industry they operate in, and other factors that alleviate the decision-making process.

As a sales leader, it's imperative to know exactly who you're dealing with and if the prospects fit your company culture.

Tracking performance of sales teams

Using the metrics mentioned in the section above allows for tracking the performance of your data-driven sales team. Sales data helps identify certain bumps along the buyer's journey and find ways to fix them.

It stimulates the growth of the sales team and motivates them to focus on the lagging parts of the entire process.

Building relationships

Fostering client relationships is just as important to your business as finding new prospects, if not more. Research shows, that repeat clients spend almost three quarters more than new customers.

Keep note of customer preferences, see what materials work better than others, and always keep them in a loop. Let them know about your product updates, new releases, beta versions, and so on.

Making the prospects feel valued will most likely make them more loyal and increase your overall net promoter score.

However, sending those personalized messages and keeping the prospects engaged requires sales data to know what content is relevant to them.

There can be no comparison between a sales team that uses sales data and a team that doesn't.

Key sales metrics

As mentioned before, sales data covers a broad range of information. Let's break it down into several metrics to see how they differ and what information they provide.

Annual recurring revenue (ARR)

ARR is usually used by companies that offer monthly or annual subscriptions to a product or service. It shows how much revenue a client brings yearly. Sales leaders can use this data to anticipate future revenue and estimate growth.

ARR can be additionally used to analyze particular segments: product line, location, new or existing customers to stimulate the performance of that particular segment.

Calculating ARR is pretty straightforward. Divide the total value of a contract by the number of contract years and get the result.

Apply the following formula to get your annual recurring revenue:

Total value of contract / Number of contract years = ARR

Win rate

Win rate measures the percentage of deals that turn into sales. It can be used in two ways to examine sales performance: on team and individual levels.

You can measure the efficiency of the entire sales team by calculating the whole amount of closed deals. On the other hand, you can also scale down the scope of calculations and measure the efficiency of an individual sales rep by taking their records into account.

It's one of the metrics that helps track the performance of a sales team.

The formula is as follows: (Closed deals / Total opportunities) x 100.

Conversion rate

Conversion rate is the percentage of new, qualified leads that become clients. Conversion rates help measure the activities of not only sales reps, but also marketing teams.

Effective lead generation activities that attract quality leads can help reduce client acquisition costs and boost the number of leads received.

Calculation: (Number of new clients / Number of leads) x 100.

Length of a sales cycle

A sales cycle is the amount of time it takes for the overall sales process to be completed, from start to finish. Having sales data on the average sales cycle length helps identify the scope which can be used as a standard to measure team performance.

You can notice certain delays along the buyer's journey and determine what causes them. Once you identify the problem, you can tackle it and find new opportunities to improve and accelerate that particular part of the process.

The average length of the sales process is calculated as follows:

Number of days required to close all deals / The total number of deals = Average length of the sales cycle

Average deal size

It's the average amount of money generated per deal. It's one of the sales metrics that helps with sales revenue planning, especially if the team has a monthly or quarterly key performance indicator they must hit.

It helps estimate the number of deals that must be closed to reach that quota.

You can calculate the average deal size like this: Sales revenue / Number of closed deals

These are several of the many sales metrics out there. Keep in mind, that not all of them might be necessary for you. It's important to select the sales data that benefits your business specifically.

Conclusion

Sales data is an essential part of day-to-day sales activities that stimulates overall company growth. It improves the selling operations, helps nurture existing customers, enhances sales decisions, and puts your company at an unfair advantage.

A data-driven sales team is significantly more educated and successful in terms of lead generation, sales performance, market knowledge, prospect evaluation, and value proposition. Personalized sales pitches allow sales teams to build better client relationships and foster a more trustworthy environment that's beneficial to both the company and the client.