The goal of every business is to make profits through repeat sales. However, tracking and measuring past and current sales performance metrics is essential to optimize your sales strategy and forecast future sales trends.
The sales performance report provides an analysis of the sales cycle & its results which business leaders can use to monitor and improve the performance of their sales process and its performance.
This blog will examine the top benefits of sales analysis reports and how to utilize them in your sales teams.
But before we delve into the day’s business, we will start with an overview of sales analysis.
What Is Sales Analysis?
In simple terms, sales analysis or sales analytics involves analyzing the sales made by a company over a period of time. This could be a weekly, monthly, or quarterly sales analysis.
Sales Analysis is a comprehensive report offering more detailed insight into business operations. In essence, you can measure and get insight into metrics like current and past sales, customer lifetime value, team performance, emerging trends, and many more to help you forecast sales and determine whether your sales team is reaching the sales targets or not.
Sales analysis analyzes the information from your sales reports to assess your sales effectiveness against a set of sales goals. Detailed data are given on the top-performing products and services in the business, as well as their challenges and potential.
Regularly using sales statistics can be useful when trying to identify which products customers want and why.
It is normal for companies to set sales targets for their sales teams to achieve. These sales targets could be due either weekly or monthly.
Whichever the case, the sales manager should be able to look into the sales analysis report and know where the team stands.
The sales analysis report helps determine where the company stands in terms of sales and then helps in sales opportunities to reach predetermined sales goals.
Sales analysis is done from the bottom level to the top level of the company. Even the CEO of the company does a sales analysis to understand segments where the company is gaining in sales and segments where it is dropping in sales. Such sales analysis can also help the product development teams.
Sales analysis reports do not mean boring numbers, it is in fact nothing too dry. The reports can be visualized using pie graphs or bar charts.
Take a look at this example for a sample report:
The above sample sales report demonstrates the right sales data that your business should track for its sales team to maximize sales growth. Find the perfect guide for sales metrics and marketing metrics.
Importance and Benefits of A Sales Analysis Report
Sales analytics analyzes sales data to evaluate your organization’s sales performance.
Apart from helping sales reps find the most effective ways to tweak their sales processes according to past sales data, market trends, and sales forecasts, it could also have the following benefits to businesses and corporates;
1. Reach More Potential Customers
Through well-informed customer data, a sales analysis could provide opportunities to a sales rep who is abreast with the best sales analysis techniques to reach more potential customers and potentially increase future revenue.
Having a robust sales data with the following information about existing customers can help position a business well to real more leads;
- The location of the customers.
- How much the consumer spends.
- The number of units the customer buys.
- What the customer buys.
- How often the customer buys it.
2. Increase Product Sales and Revenue
Sales leaders could leverage the power of historical data and sales forecasts to increase the percentage of revenue generated for a company.
Knowing how many sales and how much revenue generated in the past can help provide a nearly accurate sales forecast and ultimately help in maximizing product sales through a well-informed sales management strategy.
This can only be possible when the sales rep performs periodic sales analysis.
3. Save Time and Improve Marketing Research
Sales data analysis could help sales teams supply their marketing counterparts with the sales data needed to help determine a perfect product-market fit for new products and help build better market research strategies through the sales pattern analysis contained in the sales data.
Regular sales analysis can help provide marketing teams with data to understand the market and prepare better strategies without much marketing research. When the sales analysis report got from the salespeople is accurate and interpreted correctly, the marketing department can use these sales analytics instead of having to do their separate market research.
4. Encourage Repeat Sales
Sales reps and managers can use sales analysis tools to discover if they’re retaining business.
Analyzing sales data will help salespeople and marketers learn more about their customers, their behaviors, and what motivates them to buy.
Sales reps can afterward use these data to improve their marketing and sales strategies to encourage existing customers to call again.
When you perform sales analysis, you have all the data you need to better understand your customers, the products they are buying and the reasoning behind their actions.
While at it, identifying your most profitable customer base and keeping them engaged can be the key to increasing product sales and maximizing profitability.
5. Attract New Consumers Through Intentional Branding
When you identify who isn’t buying from you, and why, you can potentially expand your market to include new consumers.
In addition to gaining the loyalty of customers, collecting information about non-customers is another effective way to attract new customers.
Social media, sales conventions, and review sites provide a way for consumers to learn more about your brand, so you want to make it easy for them to discover it.
By conducting a product sales analysis, you will be able to find out what your non-customers think of your product. An advertisement, new product, and targeting effectiveness can be evaluated using sales analytics.
Branding is paramount – it’s how your client base identifies you.
In addition to the above highlights of the benefits of conducting and reporting product sales analysis, the key benefit is having accurate or nearly accurate numbers to aid your sales strategies.
Sales analysis is one of the tools in your marketing arsenal; use it wisely, get a good sales analysis tool and CRM software, and watch your customer base grow.
Of course, having a good sales analysis tool is not enough, you have to know the right metrics to monitor.
Let us now examine a few of them.
Key Performance Indicators of Sales Analytics
Do you need to monitor the sales of a product? What data points should you prioritize? The sea of data can drown out productivity if left managed inefficiently.
How can you identify which metrics/KPIs increase revenue so you can streamline your focus and have a more productive sales team that reaches its sales targets?
The below metrics will improve your sales process.
1. Average Purchase Value
Would you be able to sell more to your customers if you tried? You can increase your revenue without adding new customers if you increase the average purchase value. It is more cost-effective to keep a customer than to get more, so keeping a customer makes it easier to make a profit.
Depending on your products, you may be able to get customers to purchase more units, bigger packages or longer subscription periods, etc.
2. Opportunities
This predictive sales analysis metric lets your sales team easily monitor which opportunities are most likely to close the sale. This metric may include stages so your sales representative knows what the likelihood of getting a win is.
Another part of opportunities may be the value of a win.
Isn’t it wonderful to be able to pinpoint the potential of an opportunity? By using the opportunities metric, we are able to do so.
3. Cannibalization Rate
Cannibalization occurs when your new product eats up your old product in terms of sales. For example, a business that produces strawberry jam could record a loss after launching the grape variant of the same jam.
If you have got a new product that seems to be killing the sales of an already selling one, it means there’s a trend in the market that is interfering with the sales of booth products.
You don’t want to alienate your current clients by releasing products that compete with your current products. Cannibalization can be tackled by offering current clients a deep discount on the new product.
To see if the new product will affect your current ones, you may need to run a trial run before launching. Even if you do not know precisely how the cards will fall, you will have a fair idea.
4. Sales by Region
Do your know where on the map your customers are? Discovering where the bulk of your customers are from can help your sales team discover where to focus more marketing efforts and increase sales effectiveness and the business’s sales performance.
If you look at the areas where you’re doing well, you are likely to learn a couple of things that you can apply to improve the regions where you’re not performing so well.
5. Sales Target
In your sales target metric, you use your previous sales figures or your target numbers to compare your current numbers to your previous sales figures. However, you should ensure your sales targets are set correctly before using this KPI.
You can set your sales team up for success through this metric. This would have them focused and work relentlessly to reach your sales goals.
You’ll notice an almost immediate improvement if you provide your sales team with a visual that shows what they need to accomplish within a particular period.
6. Sell-through Rate
If you have an inventory, sales forecasting will allow you to make sure you have enough products to supply to your customer regardless of their demands.
The idea is to have enough products to go around and ensure nothing goes to waste, especially if you run a business that sells perishables.
This can also help the sales force tweak sales operations in order to optimize product sales.
7. Sales Growth
You should focus on boosing your sales performance when you want to test your sales teams’ ability to grow sales over a defined period of time. Consistently keeping your company’s sales growing is essential to avoiding stagnation.
Since this KPI relates directly to profitability and revenue, it plays a critical role in business strategy. Keeping customers is crucial, but growing sales is just as important. If you want to serve your current clients better, you may have to create other products. Also, check out related guides, B2B sales, SaaS sales and tech sales.
Types of Sales Analysis Methods
There are different types of sales analysis methods businesses can run depending on their sales targets. Every sales analysis method is directed toward a sales element to generate specific performance insights called sales analysis report.
However, to streamline their options, sales managers should determine where they need improvement and ultimately choose the best sales analysis method that bests suits their needs.
Here are a few you can choose from;
The sales pipeline analytics is the visual representation of each buyer’s journey from the point of a cold lead to a paying customer. Through a sales pipeline, sales reps can get an idea of how close a prospect is to make a purchase.
The goal of the sales pipeline analysis is about evaluating why a particular lead in the sales CRM drops off or finally takes the desired action. To perform the pipeline analysis successfully, you’ll need to analyze the key metrics with an effective CRM tool. Check out the sales pipeline stages guide.
2. Product Sales Performance
Can you determine what products in your company perform well?
Tracking product sales analysis is highly necessary if your sales team sells multiple products. By tracking product performance when they perform a sales analysis, your sales team can easily find out which products resonate with potential clients.
3. Predictive Analysis Report
A predictive analytics sales report uses statistical and modeling techniques involved in your sales trend analysis to predict future results and performance through past results.
In predictive analytics, data patterns in the present and the past are examined in order to discover if those patterns are likely to repeat themselves in the future.
Using this method, sales reps and business leaders can adjust where they concentrate their resources accordingly to capitalize on future opportunities and improve operational efficiencies, predictive analysis can reduce risk.
For maximum sales team performance, sales trend analysis should be carried out very often.
4. Sales Performance Analysis
This sales performance analysis metric helps you monitor which of your sales representatives are making the most the sales or reaching their sales targets. Tracking sales per rep will help you know who qualifies for certain rewards like commissions, raises, bonuses, or mere commendations.
Tracking sales per rep can also help you determine which sales reps require sales training or hire more people like your top sales representative by helping them watch out for traits and other similarities.
Understanding which of your sales representatives are selling the most products or has the highest conversion rates can help you achieve a lot of things.
5. Diagnostic Analysis
The diagnostic analysis uncovers the causes of KPIs and how sales change periodically, therefore allowing improvements to be made.
If a company is concerned that sales of a popular product have declined, it might discover that it has not been due to poor customer interactions but because a competitor launched a similar line of products.
Using an action plan, sales managers can identify obstacles and address them in a way that improves team performance.
Companies can define new barriers and evolve their sales approach to remain competitive through regular diagnostic analysis reports.
Sales effectiveness analytics monitors each salesman’s performance and uses the derived data to provide them with enough information on how to close a deal.
In other words, Sales effectiveness is the process of discovering the right sales process or sales representative that will produce the best possible sales result.
7. Prescriptive Analysis
Prescriptive analytics is a type of product sales analysis that uses technology to help companies make better sales decisions through regular sales data analysis.
The prescriptive analysis is powered by artificial intelligence, this means that without additional human input, it is able to advance from the data it acquires, adapting all the while providing accurate information.
Conclusion
Every industry uses sales analysis to see and measure its performance.
Without sales analysis, it could get a bit tricky to know what revenue is being generated and what sales process or processes are responsible.
Focusing on the right sales metrics and using an effective sales analysis method to perform a sales analysis goes a long way in informing business decisions.
Without data and sales reporting, increasing product sales could get very difficult and could kill a company’s sales.
Businesses that regularly analyze sales data can easily increase their average deal size. Explore the finest sales outreach tools.