The Importance of Sales Analysis for Businesses


You spent many hours interviewing candidates to assemble your strongest sales team yet. Each week, you get the team motivated with an inspiring speech. Then, as the week comes to an end, you determine which of your sales team members did the most sales, although through your own metrics, not a dedicated sales analysis. Perhaps the sales team member gets rewarded with a monetary incentive, or they’re assigned a lofty title like ’employee of the week’.

Yet if you only look at your sales data for a week, and you focus mostly on what was being sold and not much else, you’re doing yourself and your company a huge disservice. That’s not to say that the metrics you review aren’t important, but they don’t give you the full picture by far.

If your sales are a puzzle with 250 pieces, reviewing weekly sales gives you maybe 10 or 15 of those pieces. There’s still so much more you don’t know. 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. If you’re not yet familiar with sales analytics, then this is the article for you. In it, we’ll discuss the different types of sales analysis, how to create your own sales analysis report (using CRM), and why you can’t meet your sales goals without analyzing current and past records.

What Is Sales Analysis?

Before we get too far into our discussion, let’s begin with a sales analysis definition.

A sales analysis is a report that provides a deep glimpse into the performance of your sales team, including their successes and their shortcomings, as well as customer shopping data and incoming revenue.

In your report, you want to see such information as current and past sales and emerging trends that matter most to your business. The sales analysis report doesn’t have to be purely numbers, nor paragraph upon paragraph of dry information. You can make it visually interesting by adding in a chart, line, and bar graphs to really drive certain points home.

Take a look at this example to see what a sample report might look like.

sales analysis dashboardThe above sample report shows a handful of metrics your company may begin tracking for your sales team going forward. Here are some other KPIs you won’t want to skip either.

  • Regional Sales: When your business expands to a global level, you’ll want to start implementing regional sales tracking. This data lets you get a glimpse into which territories are your biggest buyers and which you need to focus more of your efforts on.
  • Average purchase value: The average purchase value or average sales value tells you how much money your customers spend on your products and services per transaction as an average. This metric can indicate what your best-selling products are.
  • Sales per rep: How many sales does each of your sales team members make per day, per week, per month, and per year? As we talked about in the intro, tracking this data on a week-by-week basis isn’t enough. You need a fuller scope of sales potential, and this metric will get you there.
  • Quote-to-close: Making sales isn’t everything. If the members of your sales team aren’t closing deals quickly, you’ll very soon find out by tracking quote-to-close. This KPI, which is expressed as a ratio, tells you the lead to quote target and the quote to close target.
  • Cannibalization rate: No, this doesn’t have anything to do with literal cannibalization, but rather the cannibalization rate shows which new products or services are hurting the sales of your current products and services. This is a very important metric to follow.
  • Sell-through rate: For physical products especially, you can’t skip tracking the sell-through rate. This compares your inventory versus which products are being shipped out the door. Not only does the sell-through rate show you the success of individual physical products, but it’s this metric is useful to your supply chain as well.
  • Lead conversion rate: How many of your leads become customers? Your sales team will play a big role in conversions, as will your marketers. If you’re not bringing in nearly as many new customers as anticipated, check this metric especially.
  • Product performance: When you unveil a new product, you’ll want to review its product performance after a few months. As the name implies, this metric gives you insights into product popularity and sales.
  • Sales to date: Choose a specific date range, such as weekly, monthly, or quarterly, and then check out the sales to date KPI. You can compare one sales period to another for the current year or several years back if you have the data available.
  • Sales opportunities: How many opportunities open up for your sales team regularly? How many of these opportunities are with qualified versus unqualified leads? How many deals does the sales member win? You can answer these questions and more by watching your company’s sales opportunities metric.
  • Sales targets: Did you want to make $5,000 or $50,000 this month? How close did your company get to reaching its goal? Having sales target data lets you see if your company is excelling or under performing now compared to the past.
  • Sales growth: So too can the sales growth KPI let you compare past to present. Positive sales growth will show higher revenue numbers over time while negative sales growth will reflect the opposite.

Besides the above metrics, you can also use sales data to create a sales leaderboard for your business. This both makes your sales team members feel more accountable and it lets your company be more transparent since you’re not hiding any details of your business dealings. The sales leaderboard dashboard shows you which sales members are killing it and which are other noteworthy up-and-comers.

Rather than save the sales leaderboards for your weekly discussions about sales metrics, you can show the updates on TV or computer screens across the building, continually updating the data as it changes. Seeing this kind of information can light a fire under some salespeople who aren’t selling their best.

The Types of Sales Analyses

  • Market Research
  • Prescriptive Analyses
  • Diagnostic Analytics
  • Sales Effectiveness Analytics
  • Product Sales Analytics
  • Sales Pipeline Analytics
  • Predictive Sales Analytics

Now that you have a clearer understanding of sales analytics, let’s talk more about the different types of analyses you can perform on behalf of your company.

Market Research


The first type of sales analysis we’re discussing is quite critical. It’s known as market research, where your sales team members survey leads and customers to gain insights and information on them. These surveys can be done in person if you conduct that kind of business. Otherwise, feel free to issue the survey by email or phone.

Market research tells you the condition of the current market among your customers. In other words, are they primed to buy? Is your audience making enough money to afford your products and services? Are you pricing your products fairly? What is it that your customers need? How can your products and services help?

Through market research, you can answer these questions with confidence. This then informs your sales team of their selling approach, which should be tailored to the information from the market research.

Prescriptive Analyses

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 off left behind. Also, for the deals your sales team does decide to pursue, they’ll have a good approach ready that might make the lead or customer more receptive to the sale.

Diagnostic Analytics

Using diagnostic analytics, you can review current and past sales data from your company to better understand less-than-stellar emerging issues. For example, maybe your new product didn’t sell as well because it came out right before the pandemic.

Any justifications you make aren’t excuses, but rather, you’re looking at poor sales numbers and understanding where things went wrong, what affected sales, and how your sales team can be better prepared to do more next time.

Sales Effectiveness Analytics

Who are your most effective sales reps? This type of sales data analysis tells you. The most effective sales reps are those that can deal with customers of all types, win the most deals, and build the biggest customer base for you while increasing revenue.

Sales management software might be able to point you in the direction of your most effective sales team members via a dashboard, or you can use CRM as well. We’ll talk about how you can do that in a little bit.

Product Sales Analytics

The success of your product rides on the product sales analysis. For each and every product your business sells, you must conduct this analysis over time. If certain products have gone beyond their useful life and have under performed for a while, you might use the metrics here to decide whether to discontinue the said product.

Sales Pipeline Analytics

Your sales pipeline or the sales process is the beginning to the eventual end of the sales funnel. Through studying analytics as they relate 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.

sales pipeline

As great as a sales pipeline analysis is, the data here sometimes can be inaccurate, so it’s important to sit down and meet with all members of your sales team semi-regularly to straighten out any numbers and create an actionable plan based on your sales pipeline analysis.

Predictive Sales Analytics

If you’re not quite 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, which is super helpful for companies of any size, from small businesses to Fortune 500s and anything in between.

The Importance of Sales Analysis

  • Presents Long-Term Data You Can Refer Back To
  • A Great Glimpse into Your Customers and What They Need/Want
  • Making Use of Market Trends and Data
  • Predictive Future Data
  • Fewer Missed or Lost Opportunities

Are you still not convinced that your company should prioritize sales analytics? While we’d hope that the information in this article up to now has proven why analysis methods are such a necessity for businesses, if that’s not the case, here are some reasons your company does not want to skip sales analysis for another day longer.

Presents Long-Term Data You Can Refer Back To

If you’re a new business especially, starting with sales analytics is very much recommended. In the years ahead, as you begin to experience growth, you can express that growth in specifics, with numbers and stats to back you up, instead of using general terms.

Whether you want to move to a bigger office, take on sponsors or partnerships, or get funding for a new project, being able to quantifiably prove your success will make it much easier for you to achieve your company goals.

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.

A Great Glimpse into Your Customers and What They Need/Want

Sales analysis may sound a little dry to you, which may be part of why you don’t think it’s necessary that your company track this data. What if we referred to it as customer analytics instead? Now you’re probably paying attention, right? We thought so.

Sure, through sales data, you can review who bought what, in which quantities, and how much money it made your company, but a sales analysis can go so much deeper than that. 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 who progresses and who drops off and when.

By reviewing won and lost deals, you can deduce which sales approaches are working with your customers and which aren’t. Conversion data tells you not only which leads convert, but why. Is it what your sales team is doing? Your marketers? Both?

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 see it through more conversions, greater sales, and more retained customers.

Making Use of Market Trends and Data

In the last section, we listed market research as one of the top sales analysis methods. Whether you stick to surveys like we talked about, do customer observations, focus groups, or interviews, having market research about your audience lets you craft market trends that become quite useful for your company in many ways.

For example, before you unveil a new product or service, you can refer to your market data to gauge what the receptiveness may be. This lets you build awareness and otherwise create a winning sales and marketing campaign that will result in happier customers and more sales.

Predictive Future Data


With predictive analyses, the automated data indicates what your company’s future will hold, as discussed. From marketing activities to management, inventory, supply chain, and sales, the information here can influence the decisions you make regarding all the above parties.

Having this information available, as you can with trend analysis methods, allows you to avoid potentially very costly mistakes. You won’t launch a product that’s a huge mismatch with your audience, nor will you continue selling a service that clearly doesn’t perform well among your customers anymore.

Fewer Missed or Lost Opportunities

Your sales team may work like mad, but without sales analysis, we can guarantee they’re missing out on opportunities. Each lost or missed opportunity is less money your company makes.

Market research is crucial in reclaiming these lost opportunities, as when you know your audience better, you can identify sales opportunities that weren’t otherwise apparent before.

How to Perform a Sales Analysis Using CRM

You now realize that to understand your customers, continue selling goods they care about, and to predict future trends and use historic information as a baseline for comparison, your company must begin gathering sales data and creating an analysis report.

If you already use a customer relationship management or CRM software, it’s possible to perform a sales analysis with your CRM. Even better is the process involves three steps, so it’s not overly long and unnecessarily complicated.

EngageBay CRM

Here’s what you need to do.

Step 1: Determine Which Sales Data Will Go into the Report and Gather the Data

Using the metrics and types of sales analyses as covered in this article, determine which sales data is most important to your company at this stage. Yes, you want to boost your bottom line, but in doing that, you want to draw in and retain more customers as well.

Some questions you might ask yourself during this early yet critical stage of formulating your own sales analysis report are 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? Do you believe it’s effective, or is it worth considering making some changes to the training process?

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. After all, they likely have insights that you don’t and maybe even vice-versa.

Once you can answer those all-important questions, you need to determine who your most relevant variables are to meet your goals. Whether these are members within your own company or partners outside of it, with them, you can centralize on the metrics necessary for data collection.

This data collection is not one and done, but rather, can be performed every week, month, year, or per quarter if that’s more suitable.

Step 2: Use a CRM or Other Sales Analysis Tool for Evaluating Your Data

You’ve compiled all your data and met your most recent deadline. Next, you want to load all the data into a program, be that your CRM from the onset, or even a handy office tool like Microsoft Excel and then a CRM later.

The data you have should be of high quality, as it’s more about quality than quantity here. Both are important, but if your metrics are inconclusive because you skimped on quality, that will skew your analysis report results. In other words, this whole thing is not worth doing.

Whether your program 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, both at current and historically.

Step 3: Send the Report to Relevant Parties

With your sales analysis report concluded, you can now decide among your fellow key stakeholder who gets to see the data within. You may cut the report down to only the most critical findings if you want to limit who sees what, or you have the option to send the whole report as-is.

How Do You Analyze Sales Reports?

Thanks to the information in the last section, your company just created its first sales analysis report. Before you present the information to any other party, you want to be sure that you and your circle of stakeholders have a solid understanding of everything within the report and the implications for your company.

How do you analyze a sales report? Here are some tips for making sense of all the information in front of you.

Image courtesy of Sintan

Determine a Relevant Range

More than likely, you don’t need data that goes back to the beginning days of your company years ago all the way to now. Instead, you might want to look at quarterly data, or perhaps data from a year or two back to compare current benchmarks to.

Keep this time range in mind when creating your analysis report so you’re not left to scale a seemingly endless mountain of numbers. 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 period of sales data can cause you to lose business partners, which is almost as bad as losing customers. It’s certainly just as costly.

Know That Analysis Isn’t Always Possible

In some situations, you may find your business is unable to analyze sales data reports. For example, as we’ve said throughout this article, if your company hasn’t tracked sales analytics before today, then you have no history to look back on. The same is true if your company just opened its doors this week, physical or otherwise.

Perhaps you had data stored on an older program or system, but you’re unable to convert it over to your new system, so it’s almost frozen in time. In such a case, it’s worth hiring an IT professional to port the data over. Most all-in-one CRM software can import from a variety of programs, so you shouldn’t have a hard time loading the data up in your CRM once you actually have access to it.

Another situation in which you can’t analyze sales data is if the data were somehow lost or corrupted. Computer system failure in the office on a catastrophic level can cause this, as can the computer being accidentally disposed of or even the unfortunate event of an office fire.

In such a situation, you have likely no means of recovering the data. Your best bet is to start from scratch, back up your systems often, and be diligent about keeping your sales analytics up to date.


A sales analysis is about more than how much money your sales team generates for your business. You can learn about your customers and what makes them tick through market research analysis. You also get a glimpse into your sales team and their performance through sales analytics as well.

With the information in this guide, you’re ready to create your own sales analysis report for your business today. Best of luck!

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