Data—the CRM Gold Mine We Continue to Ignore
Suppose you own a plot of land, and every day you go out and try to make a living from it. You do okay as a farmer; you feed your family, and you have enough left over to sell at the market and make some money. Life is okay, right? Well, it may well be okay, but what you don't understand is that it could be terrific. You see, right below the surface of your land is an incredibly rich vein of gold, and rather than take advantage of that resource that could change your life, you're doing this about it—nothing.
Where am I going with this story? As part of CSO Insights 2016 Sales Performance Optimization, we found that 79 percent of the 600-plus firms we surveyed had implemented a CRM system. That is their plot of land. And what are sales organizations doing with their plot? Contact management, territory management, opportunity management, forecast management, and so on. The end result is okay; some deals get closed, but only 57.8 percent of salespeople end up making their quota.
But another, often overlooked result from utilizing a CRM system over time? Lots of data. Data on your customers, your sales process, the client’s buying process, pricing/discounting trends, competitive activity, etc. That is a company's vein of gold. And how many companies are actually mining that? As part of our 2015 Sales Management Optimization, we asked if sales organizations were actively leveraging sales analytics or Big Data to unearth insights on their sales effectiveness, and, as you can see in the chart, the figure is only 15.9 percent.
What's the fallout from not uncovering these insights? Here are three things you're not doing:
You're not optimizing market segmentation. If you were to mine data on past wins, losses, and no-decisions, you would start to surface specific attributes of the prospects that are most likely to buy from you. It may be that you are more successful at selling into certain industry segments, or you more effectively engage certain stakeholders, or your solution may be more highly valued for solving certain problems than others. If you have those insights, you can more effectively target accounts where your odds of winning a deal are higher than normal before you even make your first sales call.
You're not optimizing your sales process. If you were to dig deeper into what you are actually doing during the sales process, you would also start to understand which sales tactics really help advance the deal and which do not. If you found that doing a custom demo generated a higher close rate than a canned demo, you'd find ways to make that a part of every sales process. Conversely, if you found that shipping demo equipment to prospects had no impact on win rates and actually lengthened the sales cycle, you would stop doing it.
You're not minimizing customer churn. Insights can be mined not only from sales data but also from other internal systems and from a myriad of external data sources. Look for factors that impact customer churn. If you started to see early warning signs of changes in customer ordering patterns, for instance, you could take proactive action versus doing unnatural acts (like discounting) to minimize reduced order sizes or outright customer defections after a major shift in the sales ecosystem has already occurred.
There are numerous other use cases I can name, but the point is that in sales today, we need to leverage every advantage we can to be successful in the marketplace. Continuing to not take advantage of the huge resource you have right within reach is the wrong choice. It's time to become a miner as well as a farmer.
Jim Dickie, a research fellow at CSO Insights, a Division of MHI Global, specializes in benchmarking CRM and sales transformation initiatives. He can be reached at email@example.com.