Ad Age recently predicted chief marketing officers would be more in tune with their companies’ financial planning than the chief financial officers. This may seem like a bold claim, but it’s getting harder to deny the role of data analytics in mapping out sales strategies. You’ve likely recognized the role of digital marketing in reaching consumers has transformed the way marketers approach their profession. It’s nearly self-evident small businesses occupy an important role in the overall health of the economy. Yet, how many SMBs can claim they have a firm grasp on using data to develop a sustainable sales strategy?
At the top of your list should be managing your personnel. No matter how well a business has analyzed information pertaining to sales and consumer retention, the person sifting through the information must be adept at extrapolating the most important factors and making thoughtful decisions based on what’s presented.
InformationWeek used J.C. Penney as an example of the way data can be used in counterproductive ways. The former CEO Ron Johnson took a look at data resulting from research into consumer buying habits and made significant changes to the company’s sales strategy. For example, the source indicated the company sold the most products when items were marked down 27 percent, resulting in a move to make the discounts permanent. What’s more, Johnson interpreted the smaller percentage of private label goods sold at the retail location to mean they were less important than brand-name products, despite the fact items exclusive to J.C. Penney made up 40 percent of overall profits. Meanwhile, the company reduced the role of its e-commerce platform and subsequently lost more than $4 billion in sales during the course of the year.
The use of data to guide decision-making isn’t exclusive to the 21st century, and Johnson’s successor had the benefit of seeing what didn’t work for the J.C. Penney brand. However, knowing what data is reflective of your target consumers is crucial to develop a sound sales strategy. One solution that Harvard Business Review posits is painfully simple, but something that many enterprises sometimes fail to recognize. Ask yourself: Whose data are we using?
How Are You Using Analytics?
While many organizations develop in-house data collection systems, many companies depend on the data derived by others in their industry. Businesses in competitive fields will likely have similar concepts of the ideal consumers, but similar does not mean the same. Basing sales strategy off of research conducted by other companies can inform businesses about likely trends, but all decision-making should be based on internally derived data. This is where a third-party data analytics provider can be helpful.
What Are You Researching?
If you have any kind of social media presence, you should be taking measurements of consumer interactions with the products. Considering the wealth of tools for analytics at the disposal of businesses, there’s no excuse for not using this information to better guide your sales strategy. Remember the tale of J.C. Penney? Nowhere in the process did the CEO make reference to social media sites in understanding how customers approached the brand and what policies were most influential in their buying behavior.
What were customers saying? What sort of information did they post?
These are the bread and butter of analytics. At the same time, tracking website and e-commerce traffic cannot be ignored when developing a pathway to successful sales.
Looking at who’s in charge of your data analytics strategy is the most important place to begin. Once you’ve established the person with the best credentials and experience to handle sales decision-making, take a look at the data you use. In the end, the root of the venture is knowing your customers.