Using a Data-Driven Strategy to Improve Sales
By: Angie Henson
Oct 26, 2022
In today’s data-driven and digital world, it’s more important than ever for businesses to have a data-driven strategy. A data-driven strategy uses data and analytics to make decisions and guide action.
For example, in a McKinsey survey last year, nearly 80% of B2B buyers preferred digital buying strategies over in-person only. Businesses aware of this trend can adapt.
Companies using this information can better develop strategies and take actions that consider their customers’ needs. A data-driven strategy can reap great benefits, including increased sales and improved customer satisfaction.
What Is a Data-Driven Strategy, and Why Is It Important for Businesses Today?
A data-driven strategy is about making decisions based on data rather than assumptions or gut feelings. In the past, sales teams often relied on their experience and intuition to make strategic decisions. However, this is no longer enough in today’s fast-paced and ever-changing business landscape. Staying ahead of the competition requires businesses to make agile decisions based on real data.
Why Is Data Important?
In today’s business world, a data-driven strategy is essential for success. Companies that can make decisions based on actual data will be in an excellent position to succeed in the long run.
But it’s more than having access to data. Most companies have loads of information, but it’s often scattered and provides limited insight. Using that data to define and drive sales strategy is a game-changer. Top sales teams are 3.5x more likely than average to collect and analyze data, then implement data-driven insights.
Benefits of Using Data to Drive Strategic Decisions
Organizations are turning to data-driven strategies to gain an edge in an increasingly competitive business landscape. When businesses leverage data to develop a strategy, they make more informed decisions, allocate resources better, and improve operational efficiency. Perhaps most importantly, real data strategies help businesses avoid making costly mistakes that could negatively impact their bottom line.
Additionally, a data-driven approach can help organizations identify trends and patterns and predict future behavior. Businesses can respond quickly to market or industry changes and better understand their customers’ wants or needs. As a result, companies that adopt a big data strategy can anticipate and meet the needs of their customers.
All these advantages lead to higher productivity, more efficient outreach, and, ultimately, increased revenues when applied to sales and marketing activities.
Examples of Data-Driven Strategies
Sales strategies constantly evolve as businesses seek new and innovative ways to increase revenue. In recent years, data-driven sales strategies have become increasingly popular, as they offer the potential to boost sales while also reducing costs.
Cross- and Upselling
One common data-driven sales strategy involves using customer data to identify upselling and cross-selling opportunities. By analyzing customer purchase histories, businesses can identify items that complement each other and offer customers the chance to buy other things they may be interested in. These recommendations can help increase average order values and generate more revenue per customer.
Identifying New Markets
Another data-driven sales strategy is using data analytics to identify new target markets. By analyzing customer data, businesses can identify demographic groups more likely to be interested in their products or services. Companies can use this information to tailor marketing campaigns specifically to these groups, helping to attract new customers and boost sales.
Essential Elements of Data-Driven Strategy
Data-driven strategy begins with the understanding that data holds the key to developing an effective and efficient business strategy. Businesses can gain insights into their customers, operations, and competitors by leveraging data. Then, they can apply this information to their strategic plans and help the company achieve and measure its goals.
But data-driven strategy requires more than simply collecting data. It also requires a robust data sourcing strategy coupled with strategic data analysis. The right data helps identify trends, understand customer behavior, and assess business performance.
There are three essential elements necessary to develop a successful data-driven strategy.
Define Success
First, you need to define what success looks like for your business. What are your goals and objectives? What do you want to achieve by implementing a data-driven business model?
Collect and Analyze Data
Once you know what you’re aiming for, you can start to collect and analyze data to help you understand your customers and their needs. This data can come from various sources, such as surveys, customer feedback, purchase data, and web analytics.
Take Data-Based Action
Once you understand your customers well, you can start taking action based on your data-driven analysis. Potential activities might involve:
- Personalizing your sales messaging
- Sales calls for only the warmest leads, or those the data indicates are familiar with your product and most ready to buy
- Developing new products or services targeting the needs of existing customers
- Working harder to retain existing customers, especially when the data shows their loyalty is at risk
Measure Your Results
Data-driven activities are often best when performed in iterations, and measuring the results of your adjustments is crucial. While your industry and sales cycle will determine how long it takes to see changes, after you tweak the process, you must measure the results. Then, based on your new data-driven insights, you can continuously improve your sales strategy.
Five Steps to Creating Your Own Strategy
By leveraging data for strategy development, you can make more informed decisions that will likely lead to success. There are five essential steps for developing your strategy and improving sales.
1. Align on the Desired Outcome
Successfully implementing a data-driven sales strategy requires a clear objective and buy-in from key stakeholders. Before embarking on any data-driven initiative, it’s crucial to ensure everyone is on the same page regarding the desired outcome.
Once you have alignment, you can begin to create an action plan. This plan should consider what data needs to be collected, how your team will use it, and who will be responsible for each process step.
2. Choose the Right Data
There are many different types of data that you can collect, including:
- Conversion rates
- Average success rate
- Sales cycle length
- Average deal size
- Net promoter score
However, not all of these will be useful for your specific goals. A data sourcing strategy, including how you will collect information relevant to your business, is essential. Once you have the correct data, you can develop your models.
3. Develop and Apply Your Models
Models are the specific ways you will use the data to reach your goals. There are many different models, including (but not limited to):
- Dimensional data models
- Object-oriented models
- Hierarchical data models
These are real data strategies that define how your information is organized and the relationships between different elements.
4. Transform Your Processes
After developing your model and seeing its data-driven insights, it’s time to take action. You can begin to implement your optimizations and transform your processes by making changes based on your collected data and ensuring that your operations are as efficient as possible.
5. Measure and Repeat
Finally, you need to measure progress and repeat. It should be a continuous cycle of collecting and analyzing data to see how your business is doing. If you don’t see the desired results, adapt your strategy and continue working towards your goals. A data-driven approach is an integral part of any successful modern business.
Using Data-Driven Strategy to Improve Sales
As data becomes increasingly available, more and more companies will implement data-driven sales strategies. These offer many advantages over traditional sales strategies, including the increased potential to attract new customers and grow market share, which can boost revenue while reducing costs.
Have you thought about how a data-driven strategy could increase your sales?