This blog was provided by Spiff
Leaders pay a lot of lip service to being data-driven. But, unless real transparency, visibility, and clarity are intentionally baked into every function of your revenue engine, your sales team is essentially operating in a black box.
It’s a classic case of one hand not knowing what the other is doing. This is especially risky in sales, where disconnected data can have serious repercussions on your pipeline and revenue. Consider these alarming statistics:
• Organizations that have a system of data-driven insights are 140% more likely to create sustainable competitive advantage and 78% more likely to grow revenue (source).
• Despite this, a 2019 NewVantage Partners Survey found that 72% of respondents report that they haven’t yet forged a data-driven culture (source).
• In fact, the percentage of firms identifying themselves as data-driven had declined over the past three years, from 37% in 2017 to 31% in 2019 (source).
• Meanwhile, the pace of data collection has only accelerated. IDC has forecasted that the data universe will grow to 175 zettabytes, or 175 billion terabytes, by 2025 (source).
• Yet Harvard Business Review reported in 2017 that less than half of an organization’s structured data was actively used to make decisions, while less than 1% of unstructured data was being used or analyzed at all (source).
As CIO put it, “To succeed in the digital economy, organizations have to turn this around, putting data right at the heart of their business strategy.” (source)
So how do you, as a seasoned sales operations professional, do your part by fixing a lack of transparency within sales? Today, we cover:
• What it means to be a data-driven sales organization
• How to enable transparency across your entire sales organization to make good data actionable (plus, what good data even looks like)
• And, three simple steps you can follow to better incorporate good data into your sales processes
Ready? Let’s get started!
What is data-driven sales?
Data-driven is one of those buzzwords you can stretch to mean pretty much anything. You could toss your rep a napkin with a prospect’s name and number scrawled on the back, and technically call it data. But that’s not how real data-driven sales teams operate.
Dataversity put it best: “Sales teams collect data and use it to inform every decision they make, from the products they sell to the time of day they reach out to prospects and customers.” (source)
Data-driven sales teams are at a serious advantage due to the visibility and transparency surrounding the data they have access to. From a breakdown of each commission calculation to activities happening within any given account, all data points are valuable to your reps.
Is this level of transparency really necessary? The proof is in the pudding:
• High-performing sales teams are 3.5X more likely to have a data-driven approach than a low-performing team (source).
• Data-driven sales have increased profits by as much as 8% and reduced overall cost of operations by 10% (source).
• Organizations which “inject” data into their daily operations are 5% more productive and 6% more profitable than their competitors (source).
Why should sales ops care about creating transparency for their sales teams?
So what happens when only a handful of people know what’s going on? Momentum and motivation will take a hit. Without real transparency:
Reps waste valuable time hunting for information.
Interruptions put a damper on productivity. One study from the University of California, Irvine found that if you’re interrupted at work, it takes an average of 23 minutes to refocus (source).
So, it’s probably no surprise that your reps aren’t using the bulk of their time to actually sell. On average, reps spend just 33% of their day talking to prospects. The rest is devoted to internal or administrative tasks, including a whopping 17% on data entry (source). Reps also devote 19% of their day on average searching for information (source).
This is what happens when teams don’t build transparency into their data processes. When reps can’t access information they need, they have to stop what they’re doing and attempt to fill in the gaps themselves.
Motivation takes a hit.
Sales leaders are continually grappling with compensation. Which commission structure is most effective? Has anyone figured out the right blend of accelerators and decelerators? How do you set motivation on auto-renewal, so you can lock down new logos and drive more revenue, without having to hype up your reps with a Wolf of Wall Street-style chest beat when they’ve been rejected for the 47th time?
Here’s the thing: the solution doesn’t matter. Not if your reps are still fumbling around in the dark. You can be a compensation wunderkind who’s concocted the most revolutionary, game-changing formula of all time, and it will still fail to effectively incentivize reps if they don’t understand what they’re earning, and why.
In this case, transparency surrounding compensation data refers to both the accessibility of that data and the clarity around commission calculations.
Pipeline and revenue generation slow.
When productivity and motivation suffer, so do pipeline and revenue generation. When your reps are distracted normalizing data, finding contact information, and keeping track of their own commission, closed deals become less frequent.
By making data readily available and easy to find, you’re equipping your team with the information they need to close better deals faster.
How to build a data-driven sales team
First thing’s first: you can’t build a data-driven sales team without good data. But what does that actually look like? At the bare minimum, your data should be:
• Accurate: This may sound like a no-brainer, but you’d be surprised how many organizations still rely on manual data pulls instead of real-time updates. That’s just asking for errors. Transparency is only possible when every person on your team trusts that their information is up-to-date.
• Accessible: If your data is locked away or difficult to locate, it might as well not exist. A 30,000-page encyclopedia contains a trove of information, but there’s a reason why it’s probably collecting dust on a bookshelf and not being pulled out at work every day. Accessible data is usually just a couple clicks away, without having to loop in IT or go further upstream.
• Actionable: Too much data is almost like having none at all. Instead of causing information overload, good data is useful, relevant, and something your team can act on.
Good data isn’t a happy accident. It’s an intentional outcome that’s usually driven by sales operations or RevOps teams and spans your entire go-to-market team. There’s no one-size-fits-all approach to implementation, but there are a few steps you can follow to start operating like a data-driven team:
• Conduct a data audit: Before investing in new tools, take inventory of your current processes and determine the biggest information gaps on your team. What questions do your reps spend the most time trying to answer for themselves? What missing information do they complain about most?
• Determine priorities: It’s probably not realistic to overhaul your entire tech stack overnight– nor is it even necessary in most instances. Once you know the biggest questions bogging down your team, determine what information they need to independently answer them. If you have to pick and choose, focus on integrating data that will have the quickest impact on new pipeline and revenue, and then expand from there.
• Mindset shift: Being data-driven doesn’t just mean investing in better tools. It’s also a habit of using the data from those tools to inform decisions in advance, instead of retroactively rationalizing later. The best way to support this approach is by removing barriers to entry— it should be as easy as possible for everyone on your team to utilize data into their daily workflows.
Spiff is a new class of software that creates trust across the organization by delivering real-time automation of commission calculations and motivates teams to drive top-line growth. With a combination of an intuitive UI, real-time visibility, and seamless integrations into current systems, Spiff is the first choice among high-growth businesses. Spiff’s sales commission software enables finance and sales operations teams to self-manage complex incentive compensation plans and provides transparency for sales teams.
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