All companies rely on sales figures to see how they are performing. That said, looking at the revenue generated cannot help pinpoint what’s working (or not).
Without metrics to guide you, it’s hard to make educated and data-driven decisions that will benefit your company now and in the future. This is where sales analysis comes in.
In this blog post, we show you the importance of sales analysis, its types, and how to implement it into your workflows.
We’ll also show you how to ‘read between the lines’ of sales analysis reports and help you draw powerful conclusions and insights.
What is Sales Analysis?
Sales Analysis is the process of understanding how your business performs in terms of sales. It provides insights into the past, present, and future performance of a business and can be used to help you forecast trends, identify opportunities for growth, and develop a strategic action plan for your company.
It can be helpful for businesses to understand how their sales are doing, especially if they want to grow or make changes. It doesn’t have to be dull numbers or dry paragraphs. You can visualize it in the form of bar graphs and charts.
Take a look at this example to see what a sample report might look like:
The above sample sales report shows a handful of metrics your company may begin tracking for your sales team going forward.
Here are some other KPIs you need to consider:
- Regional Sales
- Average purchase value
- Sales per rep
- Cannibalization rate
- Sell-through rate
- Lead conversion rate
- Product performance
- Sales to date
- Sales opportunities
- Sales targets
- Sales growth
What Are The Types of Sales Analysis?
Now that you have a clearer understanding of sales analytics, let’s talk more about the different types of analysis you can perform to get valuable insights.
The first type of sales analysis we’re discussing is quite important.
It’s known as market research, where your sales team members survey leads and customers to gain insights about their behavior and affinity towards your products.
You can do this in person or through online surveys — depending on your business type.
With prescriptive analytics, you use predictive information to learn more about your customers.
This tells you which deals are worth chasing and which are better left behind. Also, for the deals your sales team does decide to pursue, they’ll have a good approach ready to make the lead or customer more receptive to the sale.
Using diagnostic analytics, you can review current and past sales data from your company to understand less-than-stellar emerging issues better.
For example, maybe your new product didn’t sell as well because it came out right before the pandemic? This analysis can help you ideate better ways to reach customers.
Sales Effectiveness Analytics
Who are your most effective sales representatives? Sales data analysis can help you pinpoint your best reps (and those who are struggling).
As this dictates your company’s ability to win deals, you can use this data to optimize your workforce and key tasks.
Product Sales Analytics
The success of your products depends on the insights you gain through product sales analysis. You must conduct sales analyses for all the products you sell at regular intervals.
If certain products have gone beyond their useful life and have underperformed for a while, you might use sales metrics here to decide whether or not to continue the said product.
Sales Pipeline Analytics
If you only had one choice, you’d have to choose this one. That’s how important sales pipeline analytics is.
By studying analytics related to your sales pipeline, you can see how many leads convert to customers, how long they remain customers, who your most qualified leads are, what their money-making potential is, and which sales team member is assigned to work with them.
Predictive Sales Analytics
If you’re not entirely pleased with the accuracy of your sales pipeline analysis, you may want to supplement the information with predictive sales.
These analytics are automated, so your sales forecasting can give you an accurate glimpse into the future. It’s almost like having a crystal ball!
Predictive sales pipeline analysis is super helpful for companies of any size, from small businesses to Fortune 500s and anything in between.
The Importance of Sales Analysis
Let’s look at what all good sales analysis can do for your business.
Presents Long-Term Data You Can Refer Back To
For new businesses, sales analytics is indispensable.
As you begin to experience growth in the years ahead, you can express it in specifics — with numbers and stats to back you up — instead of using general terms.
Even if your company has been around for a few years, it’s never too late to start tracking your sales analytics. Having a long-term record of data also gives you more comparison points to look back on, such as how your company performed five, 10, or even 15 years ago.
Offers Deeper Understanding of Your Customers
Sales analysis sounds too dry to you? Well, what if we refer to it as ‘Customer Analytics?’
You can see which products and services your customers like, as these will be the ones that sell the best. You can also take a closer look into your sales pipeline to review how many customers you’re able to reach and convert.
Having a pulse on what makes your customers tick is one of the greatest tasks of any company. If you understand your audience inside and out, then you’ll have more conversions, greater sales — and you can retain customers better.
Makes Sense of Market Trends and Data
In the last section, we mentioned market research as one of the top sales trend analysis methods.
Having good data about your audience lets you craft sales deals that become useful for your company in many ways. For example, before unveiling a new product or service, you can refer to your market data to gauge receptiveness.
Fewer Missed or Lost Opportunities
Why take shots in the dark when you have sales analysis?
Without sales performance analysis, we can guarantee you’re missing out on opportunities — even if your sales team works tirelessly.
As the saying goes: ‘’Work smarter, not harder.’’ Each lost or missed opportunity is money your company loses.
Market research is crucial in reclaiming these lost opportunities. When you know your audience better, you can identify sales opportunities that weren’t otherwise apparent.
How to Perform a Sales Analysis Using CRM Tools
To understand your customers, continue selling goods they care about, and predict future trends, your company must begin gathering sales data.
When you use customer relationship management (CRM) software like EngageBay, you can perform sales analysis without having to buy a costly Salesforce subscription.
The process involves three simple steps:
Step 1: Determine Which Sales Data Will Go into the Report and Gather the Data
Using the metrics and types of sales analyses covered in this article, determine which sales data is most important to your company at this stage.
Ask yourself some questions during this early yet critical stage of formulating your own sales analysis report:
- Which of your products sells the most?
- Does one product have anything in common with the other? If so, what, and can you replicate it?
- Who are your repeat customers?
- What characteristics or traits do they have in common?
- How much time do you put into your company’s sales training?
Yes, those are a lot of questions you need to answer, but you must take the time to go through them one by one and come up with accurate, data-driven responses.
You don’t necessarily have to do this by yourself, so involve other key stakeholders in your company as well as your sales and marketing teams.
Once you can answer those all-important questions, you need to determine what your most relevant variables are to meet your goals.
Step 2: Use a CRM Tool for Evaluating Your Data
Whether your CRM software requires you to manually input your information or import it over, get all the data loaded into the program.
You can then draw up an overview of your company’s sales (present and past sales).
Step 3: Send the Report to People Who Matter
Once you get the reports, you can let your marketing, sales, and customer service teams take a look.
This can help them tremendously as it offers a roadmap to improve their processes.
How Do You Analyze Sales Reports?
How do you analyze a sales report? Here are some tips for making sense of all the information in front of you.
Determine a Relevant Range
Keep the time range in mind when creating your analysis report, so you’re not left to scale a seemingly endless mountain of numbers. Depending on what you need, you can look at quarterly data, or perhaps data from a year or two back to compare with current benchmarks.
Even if you went overboard in your sales reporting, you can clip the data range and present only the dates you want displayed, as this is most relevant to what’s happening in your company now.
Focus on Certain Metrics
With a dozen or so metrics you can track to determine the success of your sales team, it’s easy to feel a little overwhelmed.
Again, there’s no need to present every single metric if your stakeholders are only interested in lead conversions or product cannibalization info.
Cherry-picking metrics is all well and good and sometimes even preferable. However, make sure you don’t fall into the trap of only pulling the metrics that make your company look great and sweeping the bad metrics under the rug.
Failing to paint the whole picture of a poor sales period can cause you to lose business partners, which is almost as bad as losing customers. It’s certainly just as costly.
Now that you know the importance of sales analysis for your business, it’s time to implement it.
A sales analysis tool shows both sides of the coin: On the one hand, you get to know the best performing sales agents, segment hot leads, and identify the campaigns that bring in customers in hordes.
On the other hand, you can weed out cold leads, train agents who are struggling and tweak or improve failed products or campaigns.
Watch this testimonial from Lauraine M, a small business owner:
It’s more than a sales analysis tool, though.
You get hundreds of marketing, sales, and customer service features — all packed into affordable plans. You get all your reports in neatly organized dashboards. Oh, and you can create custom ones, too.