In this digital era in which we live, we have access to endless tools like Salesforce and Hubspot that help us carry out sales analysis . But believe it or not, there are organizations that do not rely on data to guide their decisions and know what they should measure.
Today we will share some tips to achieve your sales KPIs and take your team to the next level.
What is sales analysis?
Sales analysis is the practice of generating insights from sales data, trends, and metrics to set goals and forecast your future performance.
The best practice for sales analysis is to tightly link all activities to determine revenue results and to set goals for your team.
Sales analysis should focus on improving and developing a strategy to grow your sales performance, both in the short term and long term.
A common example of a sales analytics activity is setting specific goals for your team in the form of sales metrics. For example, set a revenue goal for your sales director, while setting a sales productivity goal for your account management team.
Importance of performing a sales analysis
All eyes are on sales and revenue performance, and this type of data can become something that affects or benefits your entire team.
Monitoring sales analytics in the form of KPIs and metrics helps you increase performance, optimize sales activities, and improve overall accountability.
Your sales team has a wide range of activities on which to focus and therefore operates in a fast-paced environment. A well-defined sales analytics strategy provides your team with focus and clarity so they can concentrate on doing what they do best: selling .
Types of sales analysis
Companies can perform various types of analysis, depending on their sales objectives. Each sales analysis method targets a specific element to generate performance information.
Therefore, management must determine in which aspects it needs to improve and which technique best suits your needs.
1. Trend analysis
A sales trend analysis focuses on finding patterns in sales data within a specific time frame. Many retailers use this method to determine micro and macro trends.
A microtrend covers a specific range of products for about a week, while a macrotrend can follow a range of products for months.
This method allows management to determine their progress toward sales goals and detect increasing or decreasing demand for products.
2. Sales performance analysis
A performance analysis measures the effectiveness of a sales strategy by tracking the performance of a sales team.
In addition to tracking sales per rep and other key performance indicators, this method typically requires financial analysis based on revenue generated by a given department or period.
Analysts can also tailor the report to cover success rates, revenue growth, profit margins, and any other areas of interest. This tactic shows sales teams their current performance levels and how they compare to what is expected.
3. Predictive sales analysis
Predictive analytics uses historical trends to anticipate future risks and opportunities. This allows businesses to mitigate threats and prepare teams to take advantage of new customer demand.
By using predictive solutions, businesses can improve conversion rates and define cross-sell or upsell opportunities , driving sales and revenue.
4. Analysis of the sales portfolio
Sales pipeline analysis monitors consumer activity before they complete a sale or abandon their shopping cart.
These reports typically span multiple sales channels or break down interactions from a specific source. This provides insight into how sales reps should interact with customers to improve conversion rates and complete transactions.
5. Analysis of product sales
Companies that offer multiple product lines and variants should perform routine analysis of product sales to determine which items are lagging in sales.
A product sales report takes into account key performance indicators and sales breakdown to understand the performance of the item within a given time frame.
Depending on the key performance indicators used, companies can view product sales from a demographic or customer demand perspective. The results allow management to decide which products should be discontinued or promoted.
6. Analysis of sales effectiveness
Also known as sales management, sales effectiveness analysis monitors the performance of individual sales representatives to teach them how to complete a purchase.
This report requires analysts to study the generated metrics and models to create actionable insights. Accurate analysis of effectiveness can improve customer interactions to increase sales rates.
7. Diagnostic analysis
A diagnostic analysis determines the causes of key performance indicators and sales trends to determine how to make improvements.
For example, a company may discover that the reason sales of a popular item have declined is not because of poor customer interaction, but because a competitor has launched a similar product line.
Management can identify obstacles and develop action plans to improve team performance and overcome obstacles. By conducting regular diagnostic analysis, companies can identify new obstacles and evolve their business approach to remain competitive.
12 Examples of Sales Analysis Metrics You Can Monitor
When you implement sales analytics in your organization, you’re going to want to take inventory of your sales metrics. Think about which metrics inspire action and give your team better focus.
If you’re just learning about sales analysis, then it may be helpful to review some of the following examples:
1.- Increase in Sales
Sales analysis revolves around your ability to increase revenue. Thanks to the dashboards you have, you can have your team explore the data and get the answers they need.
2.- Sales Objective
The sales goals KPI tracks current performance against a business goal.
Sales can be represented as revenue , number of accounts, units sold, or any other measure that is relevant to your team.
In a perfect world, you could prioritize your sales efforts based on the probability of closing sales . Without a doubt, current opportunities are the best way to track and measure this.
4.- Sales to date
Perform a quick analysis that compares your current sales with the previous sales period and with the same period last year. This will help you get an idea of what the trends are over time.
5.- Product performance
For teams that sell multiple products and with objectives for each of them, it is important to track the sales of each line in charge.
6.- Customer conversion rate
Statistics, such as lead conversion rate, help keep sales and marketing teams aligned throughout the customer journey with the company. Conversion analysis allows teams to continually optimize performance to constantly improve the customer experience .
7.- Direct sales rate
If you’re selling physical goods, tracking your sales compared to total inventory is an important analytical task. This will inform your supply chain and help in sales forecasting.
8.- Cannibalization rate
Selling a new product can be exciting, as innovation often is, but sometimes this can have an adverse impact prior to sales of a product.
By tracking product cannibalization in your sales analysis, you will be able to better manage sales of existing products versus new products.
9.- Closing fee
This is a great metric for sales productivity because it demonstrates how effective your team is at closing a deal. This metric provides an analysis of the quality of leads and the quality of your sales process.
10.- Sales per representative
Benchmarking your sales team is an important factor. Experienced reps and account managers are more likely to outperform junior reps, and forecasting this in future analytics is an example of how you can use this metric.
11.- Average purchase value
One of the most effective ways to grow sales revenue is by increasing the average purchase value of each sale. Incorporating this metric into your analysis and following historical trends is an important and smart strategy.
12.- Sales by region
Even global companies must perform sales analysis since there are always differences in revenue and sales depending on each region. Monitoring this metric will give visibility to the territories in which your business is competitive and profitable.