5 Ways To Improve Sales In The Manufacturing Industry
Using data-driven strategies to increase sales in manufacturing
Understanding what’s working and what’s not in your sales process has never been more critical for the manufacturing industry. By incorporating these five data-driven strategies into sales enablement, you can make your sales reps more effective and increase revenue, writes Jose Paez, Manufacturing Solution Strategist at Pricefx.
Heading into 2023, many companies are dealing with inflationary pressures, market volatility and supply chain woes. Manufacturing is not immune to these challenges and there will be increasing pressure on the sales and marketing teams to deliver revenue and profits in the face of a looming recession.
Leveraging data across the customer acquisition lifecycle can improve business performance dramatically. A study from McKinsey Global Institute found that data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain customers and 19 times more likely to be profitable. Companies now have access to more data than ever before, and using that data is key to improving the bottom line. Manufacturers need to figure out which data points to measure and how to act on the insights gleaned from the data.
The goal of data-driven sales enablement is to make sales reps more effective. By digging into the sales process and reviewing closed and failed deals, companies can better understand what’s working well and what’s not, and make changes to improve.
A recent study about PepsiCo’s journey to sales enablement uncovered that 99% of their sales marketing materials were not being used six months after their initial launch. With this data, the company worked on creating more strategic materials supported by a better understanding of what the sales team needed. As a result, PepsiCo doubled the efficiency of its sales cycle by cutting down time spent in meetings with customers and saw its supplier scoring jump from #7 to #1.
In manufacturing, one of the main challenges sales teams face is the sheer number of products most companies offer. Managing such a large portfolio can make it hard for a sales team to know which products represent the best value proposition for different opportunities. Even if there’s a clear understanding of the different products, keeping track of the constant changes in the configuration of these products can be a job in itself.
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Another major challenge is the reliance on a distribution network to support sales deals. Sometimes this can hinder the ability of a direct sales team that has to compete with external independent sales reps and distributors. These challenges clearly highlight the importance of giving the sales team the tools and knowledge to build a healthier pipeline.
To improve sales enablement and empower the team, there are five key areas where data should be employed to manage and measure the outcomes:
1. Quota Attainment
This is probably the single most important metric for the sales team and one of the most visible ways to determine the success of a sales enablement program. Tracking quota attainment can help organizations identify areas where additional resources or training may be needed and adjust their sales enablement strategies accordingly. By helping sales improve their performance, organizations can ensure that they meet their revenue targets and improve overall business outcomes. Additionally, tracking how many opportunities convert to deals will drive better sales development behavior and immediately impact the ability to close those deals faster.
2. Length of Sales Cycle
From the initial customer engagement to the final close of a deal, it is important to understand the standard length of your sales cycle. Companies should be trying to reduce the time it takes to close business. Armed with this information, businesses can develop an effective sales strategy that prioritizes the most effective sales channels and tactics, supporting the sales representatives with content, resources, and enablement tools tailored to overcome potential barriers in the sales cycle that extend the time-consuming process.
Equipping the sales team with data-driven insights and measurable outcomes can help shorten sales cycles by reducing the number of touchpoints, providing insights to better understand customers’ needs and motivations, and promptly addressing any concerns or objections. With a comprehensive sales enablement program in place and a deep understanding of the sales cycle’s length, organizations can increase their conversion rates, boost revenue, and drive long-term business success. Ultimately, the less time it takes to make a sale, the lower the acquisition cost that opportunity will represent. This can directly impact customer acquisition cost (CAC).
3. CAC to LTV
Companies should be tracking the ratio between CAC and the customer’s lifetime value (LTV). This metric enables organizations to determine the cost of acquiring new customers relative to their revenue over their entire lifetime. By understanding the CAC to LTV ratio, sales teams can focus on acquiring high-value customers more effectively and develop a repeatable revenue model. To optimize the CAC to LTV ratio, sales enablement programs should provide sales representatives with the required lead generation tools, messaging, and seamless buying experience, while supporting the overall customer experience, thus increasing client retention.
Additionally, investments in long-term customer success and relationship-building strategies could be key drivers to increasing the LTV of customers. By focusing on the CAC to LTV ratio, organizations can optimize their sales and marketing strategies to achieve the greatest return on investment, strengthen their brand, and foster long-term customer relationships.
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4. Lead Qualification Process
Lead-generation efforts must be focused on the right people. When evaluating a lead’s potential to become a paying customer, teams should consider factors such as budget, decision-making authority, and degree of interest. By properly qualifying leads, sales teams can focus their resources on prospects more likely to convert, increasing their overall effectiveness and productivity. No sales team regrets qualifying out leads that do not represent a real opportunity. The faster a lead is disqualified, the sooner the team can focus on opportunities that will bear fruit.
These efforts can ensure that sales representatives are aligned with lead parameters, enabling them to qualify and convert leads with higher revenue potential. It will also create shorter sales cycles and easier to support by the entire team.
5. Deal Compliance
Sales teams know that customers will always ask for some consideration, and it’s common to negotiate with them on areas such as higher volumes or faster payments. The problem is that the sales team lacks visibility into compliance to these concessions. Tracking compliance metrics empowers the sales organization to negotiate future deals with a clear understanding of the customer’s ability to deliver on previous agreements.
Conclusion
Helping sales reps become more effective and efficient via data can help manufacturers better deliver profitable growth. Knowing what data to use and what to measure is the first step to improving outcomes. Using those metrics to make decisions that lead to better outcomes is important. The faster sales enablement teams figure out what’s working and what’s not, the sooner they can focus resources on higher-performing initiatives and cut investments in those that aren’t driving results.
Are you using data-driven strategies to improve your sales performance? If yes, share with us on Facebook, Twitter, and LinkedIn. We’d love to hear from you!
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