When it comes to business, your sales are one of the most important aspects of your commercial success. With insufficient profit, the rest of your business falls apart. Rent becomes unmanageable, salaries become unpaid, and accounting has nothing to account for. For these reasons, it’s imperative that you stay on top of your books.
That’s where a sales analysis comes in. This is where you mine your own data in order to evaluate the performance of your sales team against projections and sales goals. Keeping on top of these sales projections and progress is one of the best ways to keep your business in profitability mode. Follow these ideas for a thorough sales analysis.
What is the importance of a sales analysis?
The importance of regular insights, forecasting, and profit assessments cannot be overstated. Using sales analytics software to do this can benefit you in a number of ways:
- Make data-backed decisions instead of relying on gut instinct
- Help your reps and sales team identify your most profitable customers and free up those resources to be used elsewhere
- Expand your knowledge of the latest market trends. This is especially important if you are looking to launch a new product to market
- Understand how to better serve your customers. This is one of the most important aspects of business
- Broaden market reach and increase your sales
What are the three key steps of a sales analysis?
- Consider the metrics that you want to track: Sales analysis is not simply about analyzing any old kind of data but analyzing what is most fundamental to your business.
A few that you can focus on include:
- What impacts the training of sales staff has had (before and after performance appraisals)
- What products have been top sellers from within campaigns
- What the key demographical features of your target markets are
After doing this, you need to identify the relevant variables to the above objectives. When this is done, you can consider an appropriate time frame to collect this data, whether monthly or quarterly. By understanding these factors, you may be able to capitalize on your weaknesses and boost sales growth.
- Choose the right tools to analyze your data: This is all about crunching numbers, analyzing data, and interpreting it for the benefit of improving your sales. You need to ensure you have sufficient data and numbers as too little will render you unable to identify patterns and trends in your figures. Doing this regularly, possibly monthly or quarterly at the latest, will provide your business with the kind of essential context to really understand the data. If a report is conducted annually, too often, the key factors that impacted your business outcomes will have degraded with time and memory, leaving you and your business unable to improve.
- Share the results of your analysis with the relevant parties: This is when it’s time to show off your results. Sometimes you may be asked to show the process, but unless you are explicitly asked to do so, then simply present your findings. In this part, presentation is crucial. Remember that most people are visual learners, so you are going to want to present your findings with a range of infographics, tables, and graphs. Keep your results actionable and understandable. Confusing your audience is a sure sign that you feel the same way.
Common metrics to be measured in a sales analysis
- Sales growth: Tracking your sales growth keeps you on top of how much your sales have shrunk or grown. This can be done weekly, monthly, or even quarterly and allows you to develop your sales strategy.
- Identify sales opportunities: There are many ways to identify untapped sales opportunities. You can look for is the number of sales opportunities that have been created by the sales staff within a specific time frame. You can analyze this against your KPIs to assess which opportunities provide the most value.
- Conversion time: Volume of sales is obviously important, but the length of time it takes to convert sales is a big factor in profitability. Understanding the average times it takes for leads to convert can give you an eagle-eyed view of what spaces are prolonging this.
- Sales targets: Having a target is natural and essential to your sales teams. However, understanding the data behind them is crucial. To avoid arbitrary targets and the inevitable fatigue that often comes with them, assess the number of products sold and use this data to construct achievable future goals.
If your business relies on sales to keep itself financially viable, then regular sales analyses should not be avoided. By carefully following the three key steps of a sales analysis and focusing on important metrics, your company can understand and optimize your sales and grow.