Here’s the pain:
Salespeople are not necessarily doing their best work, but they think they are. Likewise, companies are not using data as extensively as they should use it. But management believes they’re making data-driven decisions.
In a Toutapp study, 71 percent of sales reps say they lose time doing data entry jobs. As a result, 47.5 percent of sales reps take ten months or longer to become adept enough to contribute to company goals.
How do you stop the trend in your company? How can data help?
We’ll get to the myth-busting part in a bit.
First, let’s call out these myths.
- The Four Myths
- Myth #1: Your Sales Outreach is Happening Often Enough
- Myth #2: Using AI in Sales Is Hype
- Myth #3: You Use the Same Strategy to Close Six and Seven-Figure Deals
- Myth #4: All Sellers Can Manage, and All Managers Can Sell
- Embrace Data and Leave the Daughters of Jupiter
The Four Myths
It’s common for beliefs and facts to contradict each other — often running in opposite directions. But this divergence of beliefs and facts is fatal for doing business.
Ambitious sales goals must be matched with equal actions. Business decisions must rely on trustworthy data. Hence, you want to separate facts from fiction.
So, what’s fiction?
You can’t solve a problem you don’t understand. Hence, you want to grasp and ditch these myths for good:
Myth #1: Your Sales Outreach is Happening Often Enough
Myth #2: Using AI in Sales is Hype
Myth #3: Use the Same Strategy to Close Six and Seven-Figure Deals
Myth #4: All Sellers Can Manage, and Managers Can Sell
Let’s examine them.
Myth #1: Your Sales Outreach is Happening Often Enough
Somehow, salespeople have managed to believe in a lie while thinking it’s productivity on steroids. So they would call more prospects in the last month of a quarter than the first two months.
One data science study showed that salespeople made significantly more sales calls at the last minute than they did in the previous months in a quarter.
But the results were dismal, to say the least. These salespeople closed FEWER deals in that month even though they made MORE calls.
Not only are last-minute sales calls converting poorly, but they’re also missing the mark.
Sales calls should foster a relationship between the salesperson and the buyer. And sales reps won’t always reach their prospects by phone immediately. Hence, it takes about 18 calls to connect with a buyer.
So, if you’re a salesperson, think in terms of 18 calls per prospect. But most salespeople are not making anything near 18 calls per prospects.
Hence the poor sales performance across industries and why high-performing companies offload poor performing salespeople fast.
In one study, 78 percent of high-performing organizations will fire non-performing salespeople within a year. That’s higher than the industry’s 63 percent average.
Myth #1 Debunked: Your Sales Outreach is NOT Happening Often Enough
Contrary to the myth, 27 percent of salespeople spend more than an hour each day on administrative work rather than selling.
This dismal performance comes from ignoring data, directly or indirectly.
If salespeople ignore data, they also ignore other truths that come from it. So they wind up believing more myths
- Waiting for buyers to complete 57 percent of their buying process is OK
- Not meeting the quota is completely your fault
- Closing leads from all sources requires the same techniques
How Not Reaching Out Enough Can Hurt Your Business
This productivity drain is a killer for any sales team. In practice, when your salespeople are not reaching out enough, here’s what’s happening:
1. They leave room for competitors to dominate: You are leaving room for your competitors to outsell you.
2. You’ll miss your revenue goals: When your salespeople are not meeting their revenue goals, it ripples across your organization. But you’d never know how much outreach will be “enough” outreach if you don’t have the data to guide your decisions.
This lack of clarity probably explains why in a HubSpot study, 72 percent of companies that have 50 sales opportunities or less didn’t achieve their revenue goals.
Across the board, this statistic varied, but what’s ideal for your organization? How many sales opportunities should you target? This is a question that only data can answer.
For some organizations, 50 sales opportunities might be enough to meet revenue goals. Meanwhile, others might need over 500 sales opportunities to meet their quota.
3. You might lose investor confidence: Missing revenue targets can be a deal-breaker. Investors might lose confidence, and this can snowball into losing stock value or other assets.
Myth #2: Using AI in Sales Is Hype
In a recent study, only 29 percent of all respondents across industries said they used AI for sales-related purposes.
You don’t need to look too hard to hear all the nice predictions of what AI can do and is doing. But somehow, salespeople don’t seem to get it. Most of them are stuck in the past and don’t have a map to navigate into the future.
But light is beginning to shine here. More sales departments are seeing the benefits of AI and jumping on board. About 40 percent of sales and marketing teams now say that data science, which includes AI and machine learning, is vital to their success.
But then, there’s still plenty of room for improvement as 60 percent of sales teams are lagging behind.
Myth #3 Debunked: Using AI in Sales Is NOT Hype
This myth is everything but true. According to a study by Harvard Business Review, businesses using AI to drive sales enjoy many benefits.
- They increased their leads by 50 percent
- Lowered their call time 60 to 70 percent
- Cut costs by 40 to 60 percent
One of the most powerful uses of AI in sales is determining optimal price points. AI can tell you the ideal discount rate to set for your products.
But pricing is NOT all that AI can do for your business. Let’s explore other benefits you can enjoy.
Using AI in Sales Successfully
The coffee and beverage brand uses AI to tell their sales what drinks will match your individual taste. It uses predictive analytics to give custom recommendations to buyers as they approach their local stores.
You guessed right. Predictive analysis has increases Starbucks’ customer spend.
But it doesn’t stop at giving recommendations. Starbucks makes it easy for buyers to take action.
Right from the Starbucks AI-powered app, customers can place orders straight from their phones by voice command.
But Starbucks isn’t alone. Target uses AI to know what coupons will interest you. Oh, and they may also know when your daughter is pregnant before you do!
And then there’s Deloitte. They acquired Blab to help them sell reputation management services to their customers. As of current reports, the tool mines about 50,000 sources for data. With 70 percent accuracy, Blab helps clients understand consumer conversations that will influence buyer behavior for the next 72 hours.
Aberdeen Research says that sales driven by predictive analytics boost revenue by 21 percent YoY. This figure is a big deal because consumer-needs research would usually contribute a 12 percent revenue growth, on average.
Myth #3: You Use the Same Strategy to Close Six and Seven-Figure Deals
Salespeople tend to believe that selling is one-size-fits-all. So they approach every sales scenario the same way without recourse to the extra factors in play.
Little wonder almost 80 percent of salespeople struggle with prospecting and closing sales. Specifically, 36 percent of salespeople found closing the sale hard to do.
When deal sizes change, salespeople usually don’t change their tactics, because they don’t know better.
Most sales professionals rinse and repeat their sales pitches and processes without reading the fine print.
- Increase in money at stake
- Purchase decisions are made by a group who share powers among members
- A company’s contact person during the sales process only reports findings; his superiors make the decisions
- The company is in touch with more than one vendor
These factors should inform and influence your strategy. There lies the myth — salespeople often repeat sales scripts mindlessly. However, in sales situations, when the stakes are higher, strategies must change.
Myth #3 Debunked: DON’T Use the Same Strategy to Close Six and Seven-Figure Deals — Invoke Data
Strategies change with stakes. When you target companies with deals worth millions of dollars, they’ll take longer sales cycles and lower close rates. But each deal you win would be worth the stress.
Six-figure deals may take significant time and rigor to close, too, but not as tough as seven-figure deals.
According to Xant, targeting seven-figure deals will cause
- Sales cycles to increase by 6.4 percent
- Closing rates to fall by 2.1 percent
- Deal sizes to grow by 5.5 percent
These changes in conversion metrics come from the fact that enterprise buyers pay very close attention to minor details. But salespeople hardly know enough to address these details. Hence, successful sales reps and managers rely on data science tools to do the heavy lifting.
Closing Deals Better with Data
Closing is hard because it demands data from decision-makers who don’t usually have them. Salespeople must leverage a client’s historical data, interaction history, and other behavioral information to inform their closing tactics
That’s what Quickstart did. They leveraged data to rank sales opportunities and scored them based on their chances of closing successfully.
The result was impressive. Quickstart experienced a 40 percent boost in its close rate by leveraging a data science solution.
Myth #4: All Sellers Can Manage, and All Managers Can Sell
This is a management myth. Managers believe that their best salespeople can step into managerial roles. They also believe a manager can take over and convert any account developed by a sales rep.
You don’t want to confuse this myth with account executives not doing the job of sales development reps. Quite often, SDRs can perform account executives’ duties and vice versa.
However, it’s not uncommon for organizations to assume that a top salesperson can manage a sales team successfully. Or that a manager can simply step into the role of a salesperson without fully understanding the cadence and conversation the salesperson has built with prospects.
Myth #4 Debunked: Not All Sellers Can Manage, and Not All Managers Can Sell
Sales skills and managerial skills are not the same. That’s because the skills and motivations for performance in both roles are mutually exclusive.
Managers should focus on supporting and coaching salespeople to achieve their goals. According to HBR, targeting the right salespeople for coaching can boost performance by 19 percent.
Look at this typical sales team distribution curve below. It does a fine job of telling you what motivates salespeople, from the least performing the top performers.
- The bottom 20 percent of salespeople are motivated by survival and quota
- Average salespeople are motivated by the product, income, or their ego
- Top performers focus on the customers’ wants and needs
On the other hand, sales managers are driven by the overall sales performance of their team and the bottom line they command.
Smart companies rely on data to show them how to support their salespeople to do better. They track performance and use data visualization to see where they can boost their sales performance.
Top performing sales teams let managers manage, and salespeople sell. They support their people where they are strongest.
Let Data Lead Your Sales and Management
Data helps your sales team unearth what your top 20 percent salespeople are doing differently, so you can do more of those things. It helps your managers focus on providing valuable support and assistance to salespeople instead of doing the job of salespeople.
Embrace Data and Leave the Daughters of Jupiter
The first image in this article, the Dance of the Muses on Helicon represents the goddesses of artistic inspiration. It’s in the Thorvaldsens Museum. Even in this age of data, salespeople and execs entrust these goddesses for sales.
The daughters of Jupiter are the goddesses of artistic inspiration. Art is great. But for business decisions, you can’t rely on them for your sales insights. But you can trust data.
The top 20 percent of salespeople shun Mount Helicon, where the daughters of Jupiter live. These savvy salespeople gravitate towards reliable data.
They understand that trusting their feelings, wholly or partly, to make intelligent decisions is like visiting Mount Helicon for answers to their data problems. So they don’t bother.
For your sales goals to come true, you can’t entrust them to mythical beliefs.