Sales analytics allows you to develop a greater understanding of your sales results. By analyzing sales data, you can visualize which sales metrics perform better and which perform worse. This kind of sales data analysis helps improve your tactics, resulting in an improvement to overall sales.
Sales and marketing analytics can transform your business’ profitability. Take a look at sales activity reports and sales analyses to start your journey in sales analytics.
What Is Sales Analytics?
Sales analytics takes all available sales data to develop a better understanding of the performance of your sales processes. When put to use, sales analytics acts as one of the most important sales forecasting tools. Sales analytics data can include the actions taken by both the customer and the salesperson, as well as the results of any given interaction.
To get the most out of a sales analytics program, you need to employ the correct analytic metrics. These metrics help refine the sales analytics process so that you receive the most accurate results.
Why Does Your Sales Team Need Sales Analytics?
The process of gathering and analyzing information related to your sales processes greatly increases your chances of success. Sales processes must continually shift to keep up with trends and current practices. Instead of just blindly shooting at a given revenue target, sales analytics helps you better understand what aids that goal.
When you’re able to improve your sales monitoring system, you’ll increase your sales team’s likelihood of success. The right sales team metrics result in a direct increase in profits.
Instead of a time-consuming and costly trial-and-error method, sales analytics helps organize information. This allows your sales teams to learn the best practices immediately. And the sooner they know what works, the more leads they can capture. Without a proper sales analytics process, your team will lack the tools they need to succeed.
Some businesses fail entirely because they cannot adapt their practices in a timely manner. Employing the right sales metrics in conjunction with your sales analytics not only allows your business to survive but thrive.
Some Types of Sales Analytics to Take Analyses to the Next Level
Measuring these sales performance and company sales data points helps amplify your performance:
Understanding who buys which products and at what price point allows your team to tailor their sales approach with care. Pricing analytics takes information and helps organize different products based on their prices. This way, you can determine what your customers value in your products and what they will pay for them.
Known as the feature value and the willingness to pay metrics, these pricing analytics should receive the most attention. Feature value helps you understand what is most important for customers in your product or service. Willingness to pay refers to how much your customers will pay up to before they decide against purchasing.
You can combine these metrics to create a range of products with different features and at different prices. This helps you spread as wide a net as possible to capture more revenue and satisfy more customers.
All businesses strive to expand their customer bases. However, focusing on current customers often does not accomplish the goal of attracting new customers. By focusing on non-customers, or those who do not buy your products, you broaden your understanding of your own business.
Non-customer analytics can reveal which desired feature your product lacks. This goes a long way towards aiding the research and development process. By keeping your finger on the pulse of what the public wants, you can stay ahead of the competition. Additionally, you can develop an understanding of whether or not a market exists for a feature you might consider adding.
Ask non-customers what they find valuable about your product and why they have not purchased it. By doing so, you’ll be able to identify and understand potential product and pricing shortcomings. If you know what the non-purchasing public thinks about your product and business, you can adapt your efforts to attract them.
Get a jump on non-customer analytics to tap into unreached markets before your competitors steal them away.
Market Size Analytics
By analyzing the general marketplace in which you operate, you can determine the potential for growth. Knowing the size of your market pool helps you set sales goals and understand potential limitations.
Check out industry reports such as the Bureau of Labor Statistics (BLS) and other private reports. The more you know about your market, the better you can plan on capturing it or moving to a new one. All markets have a set ceiling. Knowing your potential heights helps you keep from putting too much effort into a marketing campaign when you have already maxed out.
Another way to stay competitive is to directly measure the sales performance of your competitors. Sometimes, your competition might uncover a game-changing factor that revolutionizes your industry. Knowing the tactics your competitors employ better prepares you to react to them.
Comparing yourself to your competitors helps reveal what you need to change and where you excel. Try to experience the competition’s sales process firsthand to get a super accurate picture of their sales pitch, special features and pricing.
Sales Forecasting Analytics
Keeping an eye forward helps you prepare for prolonged success. While curveballs will inevitably pop up, having a vague understanding of how things might change helps immeasurably. You can forecast for shifts in the markets by looking at your previous sales history.
Pipeline velocity can help show you the speed at which a lead moves through the sales funnel and how much revenue each sales cycle makes you. Use the following formula to determine your pipeline velocity:
A change to any of the included variables results in a change in your velocity. In general, most businesses want to increase revenue quickly. Increasing pipeline velocity helps achieve this aim. The better you understand which factor most affects your velocity, the better you can adapt your strategy.
Building a brand allows you to create a recognizable image associated with your products and services. To build a successful brand, you need to focus on customer perception. Comparing your own image with that of your competitors helps you make the appropriate adjustments.
Find the appropriate brand analytics information from social media interaction and customer surveys. Pay attention to all mediums where customers interact with or rate your business. Since public perception plays a huge role in brand analytics, you need to account for as much information as possible.
Sales Channel Analytics
Taking a look at which sales channels result in revenue growth helps you refine your focus. Not all channels will work the same for each industry. Sales channel analytics shows you which underperforming channels you should drop and which ones will produce the best results.
Pay attention to where customers are buying your products. If one channel does not work despite sufficient advertising, perhaps it’s wasting more resources than it brings in. Be careful not to disenfranchise any market segments by eliminating a channel too quickly.
11 Sales Metrics to Optimize and Empower Your Sales Analytics
Sales metrics form the foundation of your sales analytics strategy. Pay attention to these 11 sales metrics to transform your sales analytics.
1. Sales Opportunities
The best way to divert and organize your focus is to determine which opportunities require the most attention. The more likely a lead will make a purchase, the more attention they require. You can sort sales opportunities by using demographic information as well as key performance indicators (KPIs).
Pay attention to the actions each opportunity takes, such as how long they spend on your site and how often they click on your advertisements. Using lead scoring methods, organize your leads so that your sales teams know whom to focus on.
2. Sales Target
Keeping a target in mind helps you analyze your success. When you exceed your goal, it means that you have found a process that works. And when you fall short, you know that you need to make a change. Without a solid sales target, you cannot measure the success of any changes.
Sales targets produce enough revenue to continue powering your business. Setting them too high, however, leaves you without a good way to track your progress.
3. Sales Growth
Pay attention to how your sales grow and shift. Whenever you see growth occur, you need to find out what caused it. That way, you can continue that practice and continue to grow.
Measuring growth allows you to determine the success of any given change. Always aim to maximize growth to the level at which you can best manage.
4. Sales to Date
Comparing yourself to your own previous benchmarks allows you to understand how things change for your business. For example, if you see a year-over-year bump in sales, you know your new process works. Compare a single day to the previous year or add up to compare the year so far.
5. Lead Conversion Rate
Businesses grow when they get new leads to buy their products. The percentage of leads you turn into customers is known as the lead conversion rate. A very successful marketing campaign might attract a lot of new leads. However, problems with your online store might keep you from converting those leads into sales.
Look at where a lead loses interest during their buying process to see what you need to fix.
6. Sell-Through Rate
Sell-through rate refers to the portion of your inventory that you have sold so far. Keeping up with your sell-through rate helps you keep your supply chain in order. It also allows you to see how long it takes you to move products. This way, you can estimate and predict how long it will take you to sell a certain quantity of goods.
7. Product Performance
Measure which products sell the most and which underperform so that your sales teams know which products to focus on. Knowing which product sells the most tells you what to have your marketing campaigns and advertisements focus on.
8. Sales Per Rep
Track the number of sales each sales representative secures. This helps you get a rough idea of how much your sales team can handle. It can also tell you when you need to hire additional staff to meet a certain goal. Track this rate over time to determine the overall performance of your sales teams.
9. Cannibalization Rate
Sometimes, a new product will take attention away from an older product. Tracking what is known as the “cannibalization rate” allows you to visualize this process. Sometimes, the release of a new successful product correlates with the eradication of an old product’s sales. This may indicate that you should discontinue the old in favor of the new.
10. Sales by Contact Method and Region
Tracking the performance of your products in certain regions and contact methods helps you streamline your efforts in those markets. For instance, if you find that your cold calls do not result in sales, you may wish to try a different method. And when your product under- or over-performs in a certain area, you need to adjust your focus accordingly.
11. Sales Retention Rates
Analyze how many of your customers stick around to make additional purchases. The inability to keep customers returning might kill your business—especially in smaller markets.
These sales metrics can and will vastly improve your sales analytics. However, it might seem confusing when you try to implement them. That is where Selling Revolution comes into play. We give our clients the tools they need to improve their sales, generate more leads and recruit top talent.
No matter your industry or experience, Selling Revolution is here to help. Schedule a no-obligation 20-minute introductory call today.