Building and maintain a sales pipeline filled is mandatory to consistently achieving quota. However, sales teams are all too familiar with the quantity and quality lead debate with marketing. Research has shown that as many as 94% of all MQLs will not convert to a customer. But wait, there is hope as predictive analytics offers some hope for sales teams.
The Need for Predictive Analytics in Sales
- There is a tremendous need to optimize the allocation of expensive sales resources –Field Sales people cost approximately $350K per year and SDRs cost $75K
- On average, sales people only spend approximately 20% of their time selling and about the same amount of time performing administrative tasks
- 20% of the leads sent to sales typically produce 80% of revenue while the other 80% of leads burn precious resources
- Only 17% of SDRs achieved 90% of quota in 2016
- More than two-thirds of B2B marketers are not satisfied with how leads are routed
- On average, one out of every four leads is assigned inaccurately
- Most B2B organizations rely on their CRMs standard if-then statements to route leads
- Manual lead assignment is labor-intensive and prone to error
The Business Outcomes Sales Leaders Expect From Predictive Analytics
- Higher win rates, better deal velocity and larger deal size
- Increased revenue in existing markets by growing share of wallet
- Net new revenue from penetrating new markets with existing or new offerings
- Optimized allocation of sales development, inside sales and field sales resources
- Lower expenses by reducing unproductive leads, companies and contacts and better focus
The Predictive Analytics Use Cases for Sales Include:
Account Selection & Territory Planning
- Account selection for territories and sales reps
Effective territory planning is directly correlated to the retention of sales reps, the achievement of quota and companies reaching their financial objectives. However, territory planning is usually suboptimal in most organizations due to lack of data or time, bad habits or a static one shot rather than a fluid process.
Territory planning should result in the equal distribution of opportunity. Some organizations separate existing customer from new and others have a hybrid approach. Regardless, the opportunity to generate revenue in all scenarios should be as equal as possible for all sales reps. And, territories should be defined before the start of the new year and definitely before a sales rep makes their first call.
The more sophisticated sales organizations have evolved their territory planning and account selection beyond basic demographic scoring (revenue, employees, industry and headquarters location). The best-in-class sales organizations establish a profile of their ideal prospects based on firmographics, technographics, triggers and intent to give every rep a fair shot at success.
Driving Revenue Growth
- Create a steady, predictable run rate of qualified sales opportunity
- Deal acceleration by quickly following up and providing the right information at the right time
- Identification and optimization of what customers to upsell or cross sell and what to sell them
- Discovery of accounts that are not currently targeted but demonstrate similar characteristics to prospects that are in the sales pipeline or are customers
- Increase average order values by recommending a higher priced product or additional products or services
Segmentation is at the heart of success for most companies and this is the case for driving revenue growth. Separating prospects and customers into homogeneous segments is crucial to developing and executing sales plays that work. Without segmentation, sales reps tend to gravitate towards chasing elephants as the deals are huge and they only need to close one to make their number. Or, sales reps seek out small accounts with the hypothesis that closing these deals is faster and it is easier to find someone to talk to. The issue with both approaches is that no science has been applied to whether the prospect or customer has a high propensity to derive value from the solution that your organization offers.
Most organizations collect and maintain a lot of data but do not exploit the hidden relationships in the data to gain a competitive advantage. For organizations that have multiple products, predictive analytics can help analyze customers’ spending, usage, and other behavior, leading to efficient cross sales, or selling additional products to current customers.
Predictive analytics can sift through prospect databases to find more customers who share similar profiles to those that became customers. Usually, in real-time, a look-alike segment of companies can be generated for sales to prospect.
Net – Sales Guide to Predictive Analytics
Predictive analytics can focus your sales teams on the right accounts and arm your sales reps with sales intelligence to convert prospects to customers. By developing profiles of your ideal customer based on prior conversion data, predictive analytics can help sales teams quickly target the right prospects grow revenue.