If there’s one thing of value that hasn’t been changed due to the current market downturn, it’s data. In fact, data has become more valuable and even more important since the COVID-19 outbreak caused such a change in economic conditions.
As price sensitivity rises, disposable income drops, and a recession looms, it’s never been harder for SaaS companies to make accurate forecasts and plot their forward course. That’s why making full use of data via a high-functioning sales analytics program is vital to ensure your business’s safe passage through an uncertain market.
Good sales analytics isn’t just a question of knowing what metrics to measure or which are more valuable in times like these. It’s a question of knowing how to put those metrics to work and how to help them drive your team toward post-COVID sales growth goals.
What Is Sales Analytics?
Using sales analytics involves taking a selection of existing data categorized by metric and using it to model, forecast, and understand the outcome of future sales. Businesses make very few high-impact decisions nowadays, in SaaS and beyond, without consulting sales analytics first. This is particularly true post-COVID, where even minor decisions (like a product launch or new buyer personas) can have lasting negative effects on your bottom line and brand perception.
The most comprehensive sales analytics plans will feature multiple data pipelines, all supplying information to a centralized company database like Salesforce. A data pipeline is any source you can pull information from that your sales analytics pro/analytics department can then turn into a usable form. Your CRM will be the main pillar of your sales analytics program, but other data pipelines can include on-site forms, email lists, your SaaS product, and any other partner organizations or vendors you share data with.
A few examples of metrics that most sales departments will find useful include:
This is as simple a metric as they come. Sales growth analyzes how much your revenue organization has managed to sell in the current period (e.g., $80,000) against the previous period (e.g., $65,000).
Sales growth can be expressed as a percentage and may be understood with respect to the difference in revenue, volume-of-units-sold, or profit between this period and the last.
Activity per sales rep
There are few things you can control in business — and with a market in chaos, that list gets smaller still. What you can keep full mastery over is the amount of activity you expect your sales reps to maintain over a given period of time. “Activity” can be measured out in the number of calls, the amount of outreach and follow-up contacts and the number of meetings your rep is responsible for per period.
By analyzing sales activity against other sales metrics, you can determine the effectiveness of your wider sales strategy, including:
- The efficacy of your training
- The quality of your lead qualification
- The quality of your buyer personas
For that reason, having sales rep activity as a key pillar in your sales analytics program makes a lot of sense.
Pipeline velocity — the speed at which deals progress through your sales pipeline, from initial qualification to closed-won — is synonymous with pipeline health. Given the impact pipeline health has on your bottom line, it’s an absolutely vital statistic. Maintaining pipeline velocity will keep your business afloat, which explains why it’s a sales metric that all businesses are worried about at the moment and one that commands a central position in your analytics program. You can calculate it like so:
Pipeline Velocity = Qualified Opportunity Rate x Win Rate x Deal Size/Length of Sales Cycle
Another reason why pipeline velocity is so important is because deal risk is heightened and has taken new forms post-COVID. Paying attention to your pipeline is key to your business’s ability to identify and solve these deal-obstructing factors — like deal relay, decision-maker churn, more scrutiny from CFOs — when they arise.
Prospect conversion rate
Another fundamental sales metric is the percentage of your prospects who are converting. In this sense, “conversion” can be understood holistically in terms of how many prospects are becoming full-fledged customers. It can also be understood in terms of how many prospects are “converting” from one stage in the sales funnel to the next.
As with pipeline velocity, tracking the prospect conversion rate allows your sales team to understand better where the main risk areas are in your sales process. It also shows you whether your reps are hitting the right notes when it comes to closing a deal. You may wish to measure the conversion rate against your buyer personas.
The Importance of Sales Analytics
Whether the market is bull or bear, sales analytics is fundamental to SaaS companies. It enables more accurate growth forecasting by comparing your sales growth against prospect behavior and mitigating circumstances in the market.
Sales analytics also helps tailor your buyer personas according to which target market segments are most valuable to you. With the data you glean from sales analytics, you can target prospects more accurately. By applying sales analytics techniques to your pipeline (measuring pipeline velocity, quote-to-close, and conversion rate metrics), you can also unearth key insights as to the effectiveness of your sales techniques and sales coaching initiatives. For example, struggling reps who are behind with conversion rates can be given remedial coaching sessions to improve their deal-closing skills.
To roll out a sales analytics program, you must agree on what metrics will be helpful to your business. We’ve covered some of the basics above, but take a look at our full list of valuable sales metrics to incorporate into your analytics program.
Then review your CRM to ensure it’s providing you with enough raw data to make your analytics program effective. You may want to augment it with further data pipelines using software like Amplitude, Parse.ly, Zendesk Sell, and Chorus.ai’s Conversation Intelligence and Deal Hub tools.
Using Sales Analytics to Navigate an Uncertain Market
Efficiency and agility in sales and growth planning are paramount to guiding your business safely through the uncertain post-COVID market. The insights you draw from sales analytics can make this exact kind of impact at a time when they’re most needed.
Sales Analytics and the sales funnel
As we noted above, maintaining sales funnel health is a key sales metric for any analytics program. Without a healthy sales funnel, you’ll rapidly run into cash flow problems. Furthermore, your company may find it hard to outpace the churn increase you will almost certainly face as we work through the COVID market and a possible recession to follow.
Lead generation has become more difficult post-COVID. Companies can no longer support lead-gen through live events, which had formerly been a major source of directing leads from purchase-ready clients into the start of the sales funnel. Aside from sourcing issues, there is less buying power in the market, and the remaining buying power is more volatile as budget cuts befall prospects mid-deal.
Additionally, by analyzing metrics like pipeline velocity, rate-of-interaction with marketing, and stage-to-stage conversion within the sales funnel, you can identify prime opportunities for client engagement. In the post-COVID market, where deal relay and long delays are common, knowing when to reactivate a flagging deal can make the difference between a revived possibility and a lead-gone-dead.
Sales analytics also allows you to identify new points where deals are getting blocked. If you have blockages at the start of your funnel, then your target industries may be facing common budgeting difficulties. If you’re encountering blockages at the demo stage, it may be that your sales team isn’t highlighting context-appropriate features for your product. Close-stage blockages suggest that you may be facing above-average decision-maker churn, that your pricing points might need a rethink, or that your reps may not be speaking the right language when it comes to closing the deal.
Sales Analytics and Decision-Making
With sales analytics, you can proceed in your decision-making with greater assurance and efficiency. Data-driven decisions are well-grounded and less likely to damage your bottom line or your brand credibility.
For instance, marketing decisions become more important for your organization when there’s more competition for less business. By incorporating sales metrics, such as rate-of-interaction, with marketing, your analytics can help you understand whether your marketing approach is working for COVID-affected prospects. Whether that means making new investments in content strategy or changing your marketing channels, you can make the decision more easily using analytics.
Along similar lines, sales analytics will help you determine if you need to diversify or change your buyer personas. Keep track of analytics metrics, such as churn by sector, industry, or business size, and maintain clear and candid contact with existing customers to assess pain points and financial straits. By diligently comparing this internal data against external content and industry analysis, you can build a clearer picture of whether or not you need to switch focus to more buy-ready market segments.
Analytics will help you ascertain where there might be a need for an investment/hiring/redistribution of resources in order to meet key sales goals. Not gaining enough qualified lead volume, even though there’s no suggestion of buyer persona flaws? You might need a sales development representative. Having a tough time converting prospects beyond the lead stage? You might need to bring in some new reps with a fresh perspective.
Sales Analytics and Sales Forecasting
The final key benefit of sales analytics in tough times is its “crystal ball” quality — data gives your department insight into the way things will pan out for your part of the market. It can’t actively predict the future, but when it comes to placating worried investors and building accurate future growth targets, leveraging info from sales analytics is invaluable.
Uncertain markets are prime occasions to refocus your company on the bigger/longer-term picture. To that end, forecast sales quotas are some of the most effective for gauging growth possibilities and keeping staff motivated through intermittent slumps. By relying on sales analytics, your sales department has a keener sense of how to scale down/re-arrange your approach to quotas overall in order to satisfy that larger forecast quota.
And by comparing historical recession data against current downturn numbers, you can also make potentially key predictions about the ways in which market demand will shift.
How to Leverage the Right Sales Analytics in a Bear Market
While sales analytics is more important than ever in a bear market, the way you use it has to change. Start leveraging your sales analytics by adjusting your expectations for performance. KPIs that work best in a bull market won’t do the trick when your team is looking at a longer sales cycle length with more deal risk.
For instance, let’s look at activity metrics. Cold dials are down 32% since COVID-19, so you may want to implement a week-over-week cold call percentage increase. We’ve seen that companies like AT&T are “addressing small or medium businesses who are more likely to close.” This is because decision-makers from larger businesses are proving less accessible, and conversion rates for those larger businesses are decreasing. Going for small or medium businesses is smart KPI shifting that will allow AT&T to make the most of their analytics and keep their sales pipeline healthy.
Newmarket conditions also require new skills, so use your sales analytics to improve your training approach. For example, if you found as we did that empathetic moments have been increasing in successful sales conversations (i.e., sales conversations that result in conversion or deal progress), add this to your coaching curriculum.
Following the Data
While there are no cure-alls to a business’s changing fortunes, implementing a good sales analytics plan can feel like a major victory. With the right data on hand, in a form that your sales organization can use, a seemingly chaotic and unpredictable market can be handled with greater confidence.
When executed well, good sales analytics can help your business not just survive an uncertain market but thrive through it.