More than 100 people registered for our webinar ‘How to sell more with data-driven sales coaching.’ When many studies show sales coaching is effective at improving performance, it isn’t surprising that many leaders are interested in best practices.
In this article, we summarize 3 steps to becoming more data-driven in your approach to coaching. Each step includes key sales metrics and reports that will help you guide discussions.
Following these steps will not only help your reps hit their end of month or quarter targets, it will help them understand what needs to be done along the way.
For example, sellers may be clear they have a monthly budget, but how many know exactly how many new opportunities this means coming in every month?
Using the steps outlined here, you will be able to start each coaching session with the same, shared understanding of quantitative goals. When both sides know ‘how’ it is going, more time can be dedicated to discussing ‘what’ is required.
These steps also lead to improved data accuracy, which in turn improves forecasting accuracy.
What is required to succeed?
To succeed with data-driven sales coaching, there are 3 things that must be in place:
- Clearly defined sales process – define one process per sales type
- User friendly tools to capture, analyze and visualize data– e.g. CRM system and business analytics tool
- Openness to change – be prepared to stop old practices and seek new ways data can improve sales performance
If your sales data is inaccurate or poor quality, don’t worry. As you and your teams use data, the quality will improve because all the parties see its advantage. It is a ‘win-win’ situation.
Step 1: Determine what is required to reach budget
A good starting point for coaching discussions is to agree personal target revenue with sales reps. This is usually a breakdown of your company or team budgets.
From here you can reach a common understanding of requirements and ensure targets are realistic.
This includes answering:
- How much (# cases and value) needs to be in the pipeline in order to hit monthly target?
- How many new opportunities (# cases and value) need to come into the pipeline (refill)?
The pipeline requirements, are calculated based on a person’s 4 key sales velocity metrics. These include: number of opportunities, hit rate, average deal size, and lead time (also called ‘sales cycle’).
In the example below, John has a budget of 100,000 Euro per month. Based on the last 6 months, he has 44 opportunities per month, a hit rate of 55%, an average order size of 17,707 Euro and lead time of 65 days (2,18 months). Assuming these factors stay the same, he needs 181 034 Euro in new opportunities per month.
Example: Pipeline Requirements
If a person joined your team 6 months ago, they might need a ramp up time. In this case it might make sense to base pipeline requirements on their sales velocity for the last 3 months rather than all 6.
Once pipeline requirements are established, each sales rep has their own roadmap. This makes it easier to control what’s happening and make adjustments. It’s much better to know there are too few new opportunities before the end of the month, so there is time to do something about it.
Using the same calculations as above, you can stretch the limits and test different scenarios. What happens if hit rate increases 2% or lead time decreases by 1%? Which one of the variables gives the greatest improvement? Even a minor improvement can have a major impact. Maybe you want reps to focus on one of these KPIs for the next 6 months.
Step 2: Secure movement through the pipeline
Coaching sessions should include a look at activities. Without a planned activity to move cases from stage to stage – they risk being lost or forgotten.
- Cases past the decision date.
- Cases without a planned activity. e.g. email, phone call, new meeting
- Cases that have an activity planned, but the plan hasn’t been followed.
By benchmarking the time opportunities spend in each stage or where cases are lost, you can also identify areas for improvement.
Step 3: Evaluate the sales process and plan ahead
The final step is to evaluate sales processes and analyze data. Different views of sales data are needed to analyze results. A single view of the pipeline doesn’t give a clear picture.
Some key reports used in analysis include:
- Forecast and sold versus budget – review current period and discuss upcoming forecast per month and accumulated
- Pipeline requirements report – gain visibility into status and spot variance from target
- Open opportunities by stage and close date – manage opportunities and evaluate
- Win/loss report – understand win/loss rates and reasons
- Lead source report – review the best source of leads
- Sales per segment or product – see whether reps are working strategically towards the right customer segments
- Activity reports – spot trends and make comparisons
These reports provide valuable information about sales processes. While there is certainly a mix of skills that are important to being a good sales coach, using data to understand performance is always a good start. As the amounts of sales data increases, the more insight that data gives us.
Interested in learning more about how Business Analyze can help you coach your reps to success based on your own data? Contact us here