Build A Better Sales Machine: Part 2By: Vinay Kashyap | October 1, 2014
Part 2: Use Data and Technology to Optimize Sales Efficiency and Effectiveness
At Mainsail Partners, we work exclusively with bootstrapped companies founded by ambitious entrepreneurs. They’ve created capital efficient businesses that have typically exceeded more than $3 million in sales, though often with an unpredictable sales process heavily reliant on the company’s CEO and maybe one or two sales stars. These bootstrappers dream of their companies reaching $50 million and beyond–and we do as well–but to achieve that goal they need to implement a repeatable sales process to ensure their ability to grow and scale.
In Build a Better Sales Machine Part 1 we outlined the importance of prioritizing people and culture. We covered strategies for hiring the right sales people, ensuring managers are in the proper role, and developing an effective compensation system, all with the intent of creating a proactive and motivated sales force. The next step is to manage and increase your team’s productivity. This is where technology plays a vital role. The proper use of technology solutions and tracking metrics is critical to boosting the efficiency and effectiveness of your sales team.
In Mainsail’s 2013 Bootstrapped Entrepreneur Survey, nearly 80% of respondents said they utilize a customer relationship management (CRM) solution. While this is a good sign, we have found that many companies have a suboptimal CRM deployment and have not gone beyond CRM technology to help them manage their sales pipeline. For example, less than 30% noted that they were using a marketing automation solution. Often, one of the first projects that the Operations Team at Mainsail tackles with a partner company is to define the sales process and implement or optimize the company’s CRM solution. The technology dramatically improves sales productivity and provides continuity when a sales rep leaves or is absent. It can also provide valuable data to sales managers that will help them determine exactly what’s happening in their sales funnel.
When properly deployed, CRM solutions allow your sales team to:
- Improve the accuracy of your forecasts by tracking the status of a lead through the sales pipeline
- Stay organized by scheduling tasks and automatically creating to-do lists
- Understand what types of leads convert better than others so you can invest in the best areas
- Understand what stage of the sales pipeline is presenting the most difficulty
- Understand which of your lead sources are the most efficient
However, before you implement a CRM system, make sure you’ve clearly defined your customer’s buying process. We have seen many companies fail to see the benefits of technology because they didn’t take the time to understand and map the actual buying process and the sales tasks that are needed to be effective.
While technology certainly has its benefits, it’s not a replacement for human management. Sales managers still need to get out of their office and into the sales cubes and out in the field to mentor their sales people on a weekly basis.
In today’s market, Salesforce.com is the dominant CRM, but great alternatives exist for SMBs such as Sugar, Zoho and Infusionsoft. In highly regulated or otherwise nuanced industries, “vertical” CRMs, such as Veeva, have gained very strong traction due to their tailor-made solutions. When choosing a CRM, a company must consider a number of factors including: ease of integration with the rest of your technology suite, mobile capabilities, competitive data and price.
LOOK BEYOND CRM SOLUTIONS FOR A COMPETITIVE ADVANTAGE
Once you have a CRM solution in place, you can use other, newer technologies to further amplify your team’s effectiveness and increase its success. Depending on your sales model, there’s an array of solutions that do everything from increase the quality of your leads to accelerate your close rates. Here are just a few examples:
- InsideSales offers many leading technologies based on predictive analytics, gamification and data visualization aimed at improving the productivity of your inside sales team.
- ClearSlide allows you to see how your prospects are engaging with your sales content and responding to your messaging.
- Infer and Lattice Engines are predictive analytics platforms that use third party and historical data to predict which of your prospects are most likely to convert.
- Datahug helps your sales people leverage existing relationships to generate more leads.
- Xactly and Hoopla provide incentive management platforms to motivate your sales team.
- Marketo and Hubspot (marketing automation platforms) automate the process of nurturing and scoring leads to efficiently move prospects through the early stages of the sales funnel.
This is not intended to be a comprehensive view of the sales technology landscape, but simply to provide examples of the types of technologies that successful companies are using to gain an advantage in competitive markets. The bottom line is that knowledge (or data) is power when it comes to selling in today’s markets. These technologies and others like them can provide your sales team with information that gives them an advantage in the sales process.
USE METRICS TO LOOK FORWARD, NOT BACKWARD
In the same Bootstrapped Entrepreneur Survey, we were pleased to see that about 50% of companies we polled were tracking sales metrics such as win rate, average deal size and average time to close a deal (sales cycle). While this is certainly valuable information, those are all lagging indicators which don’t provide you with any insight into your future sales performance.
Only 30% of the survey’s respondents were tracking leading indicators. This includes activity metrics such as C-level calls or site visits. Activity metrics can provide management with specific coaching points for improving the success of their sales people, as well as an early look into pending sales performance.
Meanwhile, less than 20% of those who responded to our survey were tracking pipeline metrics such as coverage ratios. Tracking your pipeline coverage (committed dollar bookings in your pipeline by your sales team as compared to the sales goal for a given period) gives management visibility into forecasted performance. The more sophisticated the sales process gets, the further out a company can forecast it sales performance. Begin with a two quarter outlook and keep expanding. A good rule of thumb for an enterprise software company is 3x pipeline coverage in a rolling four quarter time period.
Most bootstrapped companies reach $5 million in revenue because they have fantastic products that solve real problems. However, the single biggest factor in determining whether these companies reach $50 million or more is sales execution. Mainsail has worked with every one of our portfolio company management teams to help them hire the right people, leverage data and implement technology to build a repeatable sales process.
For companies aiming for that next level, transitioning to a proactive, predictable sales model is imperative. Putting technology and data to work for your sales team will help your company get there.