When revenue is down the fingers start pointing. Sales and marketing teams are each quick to absolve themselves of responsibility and while this can be toxic, the reality is that you need to establish where things are falling over.
Whenever I get asked how to improve a company's sales and marketing performance, I always look to the data that can give me the indicators for success, not just the top level stuff. While this may sound obvious, quite often people get caught up in the larger metrics and miss the true indicators of performance which are the small things that collectively have big impacts.
Before I get into that further, I want to pause for a minute and shine a spotlight on the fact that for far too long sales and marketing have clashed heads and worked in an incohesive way in many organisations. The typically failed attempt to correct this behaviour is to encourage the teams to 'help each other' which is interpreted as 'do someone else's job for them'.
What should be occurring is the development of a shared agreement whereby both sales and marketing teams develop the requirements that will help them achieve their own goals and then collectively flesh out what that in turn would look like as a shared framework. Remember, these are people who live and breath negotiation, they'll be able to figure it out if they have their thinking aligned to taking this Smarketing approach.
How To Improve Your Sales And Marketing Performance From The Ground Up
"Sales are down we need more leads"
"Leads are down, we need more website visitors"
"Website visitors are down, we need more advertising budget"
"Sales were down 10% last month as a result of customer retention rates continuing to decline, currently at 81%. While website visitors were down 2% for the month, the weekday average was actually 6% higher as a result of the reduced number of trading days last month. Lead conversion rates were essentially unchanged at 3.8%. Through reviewing our incoming call reports we have seen a spike in calls for customer complaints and therefore we need to review the nature of these complaints to determine how we improve the customer experience to improve retention, and resultantly sales revenue."
Understandably, reduced revenue can cause frustration and the absence of a logical approach. Whether it is through a lack of time, resources or capabilities, the reality is that throwing money at an ill considered and unfounded conclusion will give a less effective return than identifying the root cause of your problems and developing a strategy based on the data. This is why companies such as ours offer marketing review services to help provide this balanced insight.
What You Should Be Measuring
In an ideal world we would all be measuring every facet of our sales and marketing efforts, but for many businesses that is not always practical. The importance therefore, is to establish the metrics that you can commit to measuring each month (or other relevant frequency) and how and why these metrics of measurement will be valuable for your business.
It is worthwhile to note that eCommerce businesses will have a different measurement requirement than small professional services firms, who will again be different to a restaurant chain. Therefore, while you may not see validity in measuring each of the below metrics in your business, here are 10 important factors that when measured regularly can give you the insight to improve your sales and marketing effectiveness.
- Number Of Unique Website Visitors
- Visitor To Lead Conversion Rate
- Lead To Customer Conversion Rate
- Average Transaction Value
- Average Number Of Transactions Per Customer
- Which Customers Made Up 80% Of Your Revenue
- Customer Retention Rate
- Cost of Customer Acquisition (CoCA)
- Customer Lifetime Value (CLV)
- Total % of Revenue By: State, Account Manager, Product Line, Customer Segment etc
To improve your sales and marketing performance you now need to identify realistic methods to improve each metric to get a cumulative benefit.
For example, after running a sales report by customer and calculating the line at which 80% of revenue is achieved (which would be by approximately the top 20% of your customer base), you should look for similarities in these customers. Is there a particular Account Manager who features more prominently in this list? Do these customers exist in a particular segment more than another? What was their original source (website, trade show etc). The objective here is to establish some common variables.
So, assuming more of your top customers were derived from your website, then look at your relevant CoCA for website activities and compare this to your overall CoCA. If the CoCA deriving from your website is lower than your overall CoCA, then you have the basis of a pretty obvious strategy.
Taking A More Detailed Approach
Assuming you don't have existing analytics tools or software and want to get more detailed, my advice is to extract, at the most granular level, all your sales and marketing data for the last relevant period into one single spreadsheet. Take a copy of that raw data and then paste it into a dozen different worksheets.
Then in each individual sheet (one at a time) start playing with the data. Sort the data by individual variables and create subtotals to look for trends. Really consider what story the data is telling you, why it would matter and whether it is reliable.
For example, which customer segment is attracted by which marketing activity and what is the CoCA and CLV in each case? From here identify the relevant ratio of your CLV to CoCA for each combination and help define the more specific return on each element of your marketing plan.
Assuming you haven't done a report such as this before, then you will have to use your best judgement and analytical thinking to look for valuable insights and follow the ant trail until you uncover something you can action against.
When you feel you have something, test it against a different series of sales data for different time periods until you are sure you have a reliable analysis that will help improve your sales and marketing performance.