5 Ways Data Denial Hurts Marketing and Sales

Even as other parts of business have reoriented around data, sales and marketing have been allowed to function as though they’re black arts, with their practitioners going about their trades mysteriously, doing things for reasons only they know. Sometimes the result is a great quarter. Other times, not so much.

Sales and marketing always have generated metrics — but given the difficulty of discovering and organizing them, many managers have fallen back on instinct and experience to make decisions. Today, technology allows managers to surface the details of their organizations’ operation — but, in many cases, data is used sparingly, or its used only to support a preconceived notion.

That’s called “confirmation bias” — something psychologists define as the tendency to selectively search for and consider information that confirms one’s beliefs.

We see a lot of that in political thinking today: A person develops a point of view and then hunts for evidence to support that point of view. Evidence that disproves or contradicts his point of view is ignored or even actively attacked. This tendency has ruined a lot of cocktail parties — and it’s hurt a lot of businesses, too.

Now that we can use data in sales and marketing, we ought to be able to lay some preconceived notions to rest in favor of more accurate and more actionable understandings of our organizations and the problems they face. Unfortunately, some people still cling to the old, imprecise ways of doing things.

Here are five areas where data can play an important role. Often, this data is easy to come by — but its impact is dulled by the preconceived notions of the people entrusted with it.

1. Sales Hiring

The rate of turnover within sales forces can be astonishing — as high as 50 percent in some industries. Some companies make a point of replacing the bottom tier of performers, but most companies lose sales people for two reasons: 1) the sales person felt more money could be made elsewhere; or 2) the sales person was a bad hire in the first place.

Hiring experienced sales people should be easy — ask for their W2s and look at how much money they’ve made in commissions at past gigs. Even hiring new sales people without experience can be made much easier through automated screening tools, which provide an assessment of skills and disposition and can say whether a prospective sales person has what it takes, based on a well-thought-out set of criteria against which the prospect’s data can be compared.

Sadly, much old-school hiring is made based on gut feelings and assumptions that reflect the hiring manager’s experience and not the realities of the candidate that are apparent in the data. That leads to poor performance, turnover, and lost opportunity cost for the company.

2. Lead Scoring

When prospective customers do something, you should take note of it — especially when they do something that signals they are ready to buy. Evaluating these various activities and weighing their contribution to making a prospect a qualified lead is at the root of the concept of lead scoring, a widely recognized tactic for organizing and prioritizing leads.

It may be widely recognized, but that doesn’t mean people are doing it. Only 44 percent of companies reported using any kind of lead-scoring system in a 2013 study by Lattice Engines.

That means that 56 percent of participating companies were using no process — or, rather, they were using imprecise processes that treated all leads the same.

That wastes your sales team’s time and creates an atmosphere in which sales is skeptical of marketing’s ability to deliver leads that convert. In order to become more productive and to foster a more harmonious sales-marketing relationship, you need to become part of the 44 percent.

3. Lead Nurturing

Another marketing technique that everyone agrees is the bee’s knees is lead nurturing. That’s the use of content served at regular intervals to leads that are not yet sales-ready, with the idea that when they are ready to buy, you will be in position to convert them — especially if their activity is detected and noted in your lead-scoring system.

Again, just because people admit that a solution works does not mean they’ll actually use it. Sixty-five percent of B2B marketers had not so much as bothered to establish a lead nurturing program, found Marketing Sherpa in a 2012 study. Of those that had, only 15 percent said they kept in touch with leads on a monthly basis.

What that indicates is that in most organizations, marketing generates leads, sales works them once, and then they’re forgotten. That represents a massive wasted investment. A bit of work to create a nurturing program — and to understand the data that comes from it — can turn that waste into wins.

4. Pipeline Management

Sales people should be using your CRM application to track their sales pipeline. If they are, you can see a lot of things that should alert sales managers to spring into action. For example, sales people sandbagging to save up sales for next quarter probably will show a bulge in the pipeline where they’ve intentionally parked customers.

Likewise, a struggling sales person with sales stalled at the same stage probably could do with a little coaching from sales leadership to help traverse the speed bump.

Most companies have some way to visualize what’s going on in their pipeline. Even so, 63 percent of executives admitted that their organizations were ineffective at managing their sales pipelines, in a survey conducted by Salesforce.com and the Sales Management Association.

Managers aren’t ignoring the tools — they’re just not using them to their best benefit. Instead of using pipeline management to, y’know, manage the pipeline, most managers use it to build forecasts. The data is there waiting to be seen, but unless managers are ready to see it and act on it, it’s not particularly useful.

5. Territory Management

Sales territories are contested, contentious things; every sales person wants as big a territory as possible. That often leads to sales managers negotiating with their sales people before taking the red Sharpie pen to a map.

This kind of arbitrary decision-making on territory isn’t good for the company, though. It means that some sales people get fewer leads than they can work, and others get too many. The result is an uneven spread of leads across the sales staff, and money left on the table.

It also puts the manager in a reactive role, drawing and redrawing territory boundaries in reaction to missed forecasts.

The way to avoid this scenario is the use of territory management software, which has the key data built in. Let the software make the call, based on data. Data trumps the whims and wheedling of sales people — and managers honestly can say that the use of the software will spread the leads evenly and result in higher commissions for everyone.

Getting the right data isn’t rocket science — but it requires managers to commit to data and automation, and relinquish dependence on their gut feelings.