Unlocking the Right Data for Growth
Author: collin stewart
THE MISSING LINK
During their 20 year careers in the fields of data intelligence, sales, marketing, and revenue operations, Alice Chandrasekaran and Jennifer Aplin have found, time and time again, that businesses lack the data they need to generate the insights necessary to drive growth. Other departments outside of the growth function have standards for how they collect data, but revenue leaders still seem to be making important business decisions based on intuition rather than facts. As a result, they’re missing targets and there’s confusion about which programs and teams are actually generating revenue.
The problem isn’t that companies aren’t collecting enough data. In fact, Alice and Jennifer explained on a recent episode of the Predictable Revenue Podcast, the problem is quite the opposite. Companies today are in the depths of what Alice and Jennifer call “the chasm of complexity.” As companies grow, teams become more and more siloed, many unique manual processes emerge, and a lot of department (sales/marketing) and industry-specific technology is acquired. There are so many moving parts and so many sources of data that revenue models become fragmented, valuable data is trapped, and revenue is leaking.
The missing link is not just any old data. It’s data that tells a specific story of how revenue is generated in an organization. This is the fabled Growth Data. Digital Magenta helps companies to harness this data to drive revenue and boost productivity.
WHAT COMPANIES ARE DOING WRONG RIGHT NOW
It’s not that companies are doing anything wrong (those were my words, I’m a bit of a sensationalist). Jennifer maintains that companies exist within a chaotic environment. Traditional business channels have been disrupted, and the need to become digitally savvy has accelerated. Teams have become even more dispersed, and more tech has been added to help teams become more efficient. This combination of factors has landed companies in the chasm of complexity. To make matters worse, much of the tech that companies implement is specific to a function. Tools are onboarded to optimize individual processes and the revenue-generating model becomes more complex and more fragmented.
The result of this hodge-podge tangle of process and technology is revenue leakage.
The 5 most common leaks are as follows:
- Lack of Focus
- Manual Processes
- Disjointed Technology
- Siloed Teams
- Unreliable Data
The impact of these leaks is different on each company, but Jennifer hasn’t met a company yet that isn’t impacted by one or more. Some of them are easy to identify, like a company throwing money at marketing strategy without the data to back it up, or teams struggling to communicate. But the leaks below the line of visibility are much more terrifying. These might look like business intelligence being captured locally but not shared throughout teams. Or – and as a sales leader, I shudder to even write these words – A-level opportunities that salespeople aren’t following up with.
To expand on that last example: Alice and Jennifer worked with a company investing heavily in lead generation and discovered that they had over $2M in SQLs stagnating in the pipeline. For context on an earlier blood-curdling example, they worked with a company spending hundreds of thousands of dollars on online ads with no strategy, no way to measure success, and no ROI.
Another interesting piece that Jennifer notes is talent leakage. When people aren’t focused on the right activities and they aren’t working to their fullest potential, companies are at risk of their top talent walking out the proverbial door.
So, what’s going wrong? Companies are generating more data, but it’s not the right data.
WHAT COMPANIES SHOULD DO INSTEAD
Here are the 5 things Alice believes companies who have unlocked the right data do instead:
- Defines leading indicators
- Identifies critical revenue drivers
- Focuses teams on what’s key to driving revenue
- Automates cross-functional processes and conversion points
- Visualizes leading indicators that become part of your daily operations
All (I’d hope) companies have KPIs that they’re measuring against to track their process. Some traditional metrics are things like forecasting, average deal size, time to close, win rate, etc. Alice asserts that the majority of companies find this data unreliable. While companies may be tracking this data until the cows come home, they find it difficult to forecast accurately.
As a result, the first step to unlocking Growth Data is establishing reliable, foundational KPIs. On top of that foundation, you can start to layer the data that actually drives growth.
Leading indicator KPIs: Can you tell if your team can meet their target before the quarter ends? Most companies measuring activities are primarily doing so for productivity, but if you can correlate activities with the output you can predict if you will reach your goals.
Identify critical revenue drivers: Understand which cross-functional activities contribute to revenue generation (this will help you define leading indicators). These can be programs, team actions, individual activities – anything across the lead generation process. For example: Alice and Jennifer were able to determine for a Digital Magenta client that the webinars they were putting on resulted in revenue in a 3-6 month time frame. For another client, they were able to identify that MQLs were converting into higher quality deals than those sourced by the prospecting team.
Focus your teams on what’s driving revenue: Provide your teams clarity into what these activities are, and drive alignment across the sales and marketing departments.
Automate cross-functional processes and conversion points: Use automation to remove friction in communication processed between the teams (passing leads, notes, etc.), collect data, and add more data points. For example, rather than asking your salespeople to fill out yet another new field in salesforce, automate it.
Visualize leading indicators that become part of daily/weekly operations: Set up dashboards to visualize the important activities and operations that the teams and leaders are focusing on.
HOW TO IDENTIFY CRITICAL REVENUE DRIVERS
To start the ball rolling, Alice suggests you ask yourself two questions: Which leads become opportunities? How do opportunities become customers? These questions seem simple, but in trying to answer them you will address other important questions that tell the complete story of the revenue generation process at your company.
Goals: How do I set my revenue targets?
Volume: How many leads and opportunities do I need to hit my goals?
Speed: Which opportunities lead to revenue in the shortest amount of time?
Money: How much do I need to spend to generate qualified opportunities (and where)?
Time: How long does each stage of the customer lifecycle take?
People: How many team members do I need?
Activities: Which ones are the most important for driving revenue?
The Digital Magenta duo often hears “I need more leads,” or “I need more salespeople,” when a company is trying to grow. On the surface, these statements seem reasonable, but when it comes to a company’s revenue-generating system, Alice equates it to saying “I just need more gas” to get to your desired location when you have a fuel leak and a broken GPS. You have to get down to the route of the problem, then fix the tank and the GPS so that you can get to your destination with less time and fuel spent.
Finding the right data comes down to asking the right questions. Leadership may already be asking these questions, but the company really needs to anchor into these questions, find the answers, and stop ignoring leaks.
HOW GROWTH DATA PROVIDES CLARITY
KPIs can either be leading or lagging. Growth Data is leading. It gives insight into trends before the end up as outcomes (i.e. if your team will reach their target before the quarter ends). It gives you foresight so that you can be proactive in your decision-making rather than reactive.
Growth Data reveals the specific revenue-generating activities that are identified at key conversion points. The intention here is to help to set achievement targets and to guide the required behaviours to achieve them. While these activities can be very different from team to team, understanding what they are and how they fit into the revenue generation process is paramount.
For one client, Alice explains, Growth Data translated into the understanding that as long as each new business salesperson has 1-2 specific needs analysis meetings monthly with an average deal size of x dollars, the team will hit their revenue goals. Conversely, if meetings are not following this cadence, it is an early indicator that they likely will not reach their target. Then, the question remains, how do they make sure that each salesperson has those 1-2 specific needs analysis meetings a month? Growth Data tracked the activities across sales and marketing to draw the line between a certain activity that drives this type of meeting.
Regardless of the exact activities that the Digital Magenta team identifies for their clients, each company they work with has a common realization. Every sales and marketing team wants to win. And they want clarity from leadership on where to focus to drive the maximum success for their organization. Growth Data helps leaders to provide it to them.
WHAT TO DO ACCESS GROWTH DATA
Jennifer advises that companies begin by understanding how revenue is generated and how it flows through their revenue operating model in a cross-functional capacity. Then they need to look at the way data flows through that same operating model. To do so, they need to identify their key systems, connect the systems, and map the data. Once the data is mapped, key revenue drivers can emerge, and these insights can be used to drive better growth decisions and strategies.
Back to Jennifer’s point on talent leakage and the risk of companies losing their best performers if they aren’t focused on the right activities. If a company is in growth mode, they need to retain that top-level talent at all costs. Growth Data not only ensures that your top performers are focused on the most important activities, but it ensures that all your talent is equally set up for success by identifying what your top performers are doing that sets them apart, how to replicate those behaviours, and scale them.
If you don’t have the right data to specifically accelerate revenue, you’re at a high risk of leaking profits. Those leaks come in the form of lack of focus, manual processes, disjointed technology, siloed teams, and, most importantly, unreliable data. But when a company unlocks the right data they can define leading indicators, identify critical revenue drivers, focus teams on what’s key to driving revenue, automate cross-functional processes and conversion points, and visualize leading indicators that become part of your daily operations. And, when all of this is said and done, the company can cross the chasm of complexity to achieve the ultimate goal – growing the business.
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