We live in an ecosystem of data. This onslaught of data has transformed decision-making across a vast spectrum of strategies, ranging from streamlining internal processes to entering emerging markets and new industry sectors. The amount of data being attained is astonishing, and the speed at which is can be aggregated is staggering. I’s been highlighted both in the private sector, with Facebook’s Cambridge Analytica, as well as in the public domain, with the Congressional investigations into Facebook’s misuse of it.
It’s no wonder there’s so much focus on acquiring, mining, analyzing, and executing based upon data. It can transcend revenue models, avoiding economic pitfalls, and protecting against competitive disruption. However, there’s a rhetorical argument it’s created collateral problems stemming from over-reliance. Scenarios where Executives are afraid to make decisions because they feel they need more data, or people analyzing data without understanding the context of where it was created.
Data is only as good as the sources, processes, and people that create it. The cliché ‘bad data in, bad data out’ is routinely tossed around Senior Leadership conversations, yet rarely gets any real-world application. This is especially prevalent in Sales, where the focus routinely jumps to the Salespeople, instead of starting with a foundational examination of the Sales framework. What are Sales leaders capturing and analyzing? Why? Are they working hand-in-glove with Marketing? Do their findings lead to asking more questions, or what to further analyze in a different manor? Did the heads of Sales & Marketing both create and agree on KPI’s, along with how they ultimately track the only thing that matters… closed revenue?
The answers to the questions above are overwhelmingly, ‘no’. Marketing tracks a tremendous amount of customer data, usually without the involvement of Sales. Conversely, Sales tracks Salesperson activity and deal progression, without bringing in Marketing to help identify how to improve the entire Sales process. The ultimate irony is in almost every instance, all the data is housed in one platform… the almighty CRM (Customer Relationship Management) system.
The advent of CRM’s has revolutionized Sales, both in positive and negative aspects. Gone are the days of where Salespeople are forced to keep everything in spreadsheets or paper files, but also gone are the days where Sales Management placed most of their focus on coaching their Salespeople. The higher up in the org chart, the more ubiquitous this becomes. Senior Sales Leaders habitually comb through data points in search of some ‘magical data nugget’ that will instantly turnaround their underperforming Sales Team. What they don’t realize is they’re analyzing data based upon a Sales framework they built, or more likely, skipped building properly.
This typically happens, and always intensifies, when the single most important piece of data in Sales is scrutinized… closed revenue! There’s no need for Sales Management to allocate tremendous resources into data analyzation before they make a simple, common-sense, self-examination. Declining revenue is incredibly easy to isolate, however, it’s regularly overthought in early investigations. If a small percentage of your Salespeople aren’t producing, you have a Salesperson problem, or possibly a Sales Manager problem. If your entire Sales Team isn’t producing, that’s a Sales Leadership and C-Suite problem, not a Salesperson problem. Identifying this simple dichotomy means the difference between companies thriving and folding, and Salespeople raking in commissions or leaving for a company where they’re not blocked from selling.
A perfect example happened to me when I was about nine months into an Enterprise Sales role at a SaaS company in the HCM space. The VP of Sales was tenured with six years at the company, however, he lacked experience in articulating strategy and managing expectations to the Private Equity firm that recently bought the company. He was under a tremendous amount of pressure to increase revenue but didn’t know how to coach the Sales Team on the fundamentals of creating demand, which ultimately creates the data that gets tracked in a CRM. Instead, he spent every waking hour buried head first in our CRM, creating reports that didn’t align with anything of substance, and ultimately defaulted to the battle cry of a Sales Leader that’s in over his head, “Make more calls…”
My role in this equation was the textbook corroboration to my previous opinion. I received a call from my Sales Manager regarding his call with the VP of Sales. The focus of their call was the amount of ‘Closed/Lost’ deals under my name. My Manager and I were friends and could speak freely, which helped me in two ways. First, he told me the VP wanted to fire me because, reading between the lines, he has to make a political move to save himself in the eyes of the PE Firm. Luckily, my Manager talked him out of it, which gave me the opportunity to retort while I was still employed. It didn’t take me very long. In fact, I angrily rebutted the VP’s contextual reasoning, highlighting the data he pulled was actually the VP’s creation! I sternly popped off, “Does this guy not remember dumping 45 worthless deals under my name, from the rep that quit a few weeks before I onboarded?”
The deals that created this ‘Closed/Lost’ data point the VP dug up and was using as reasoning behind our cratering sales, ironically were his own creation. He transferred 45 deals from a Salesperson who quit, into my name. After my initial training I went through all these deals, wasting a couple weeks’ time, and quickly realized they were all made up. I, as I should have, closed them all as ‘Closed/Lost’ because they weren’t real deals. This catapulted me into having over 300% more lost deals than my peers. This was eye opening for me. Not only because I nearly got fired by someone who created the data point he was using to fire me, but moreover, because it was clear everyone in the Sales Division would peril under this VP’s leadership.
What difference does it make how many ‘Closed/Lost’ deals are in a Salesperson’s pipeline? That data should bring more questions to light, because on its own, it doesn’t provide any definitive answers. He clearly didn’t understand how to add context to data, and unequivocally didn’t know how to use data strategically. If he’s trying to isolate reps who can’t bring in closed revenue, this is NOT a data point to use in strategic decision making. It is, however, a decent data point to use when starting to look into a Salesperson, or an entire Sales Team. If there’s a high amount of ‘Closed/Lost’ deals, the first contextual question needing to be answered is ‘where’ are the deals being ‘Closed/Lost’. If they’re towards the end of the Sales cycle, then it may be a Salesperson problem. However, if they’re towards the beginning, it’s most likely a Sales Management and Marketing problem. When you add in the context, the data can help you isolate what to look at next. If deals aren’t progressing in the Sales process, it’s because Marketing generated inbound prospects, and/or prospects Sales Enablement loads into a Salesperson’s CRM for outside sales, are the ‘wrong’ types of prospects.
This VP of Sales, and so many others, fail because they’re looking for answers in the wrong places, typically focusing and relying on data at the end. No singular data point can isolate solving problems, you have to use your own instincts, logic, and deductive reasoning. You have to figure out where you’re going before you analyze how you’re going to get there. You have to use data to bring more questions to the surface, until you’re analysis covers multiple scenarios of successes or failures. If the new breed of Sales Leaders would stop relying so heavily on CRM data and coach their Salespeople, their CRM’s would be loaded with the only KPI that matters in my book… CLOSED SALES!
