Sales Data Analytics
Are you looking to maximize your sales capacity while also meeting the needs of your customers? Are you not sure how to achieve these goals? Sales data analysis can help.
Here are nine ways you can use sales data analysis to improve your bottom line and get a leg up on the competition.
1. Improve and Refine Your Product Offerings
If you’re running a large business, with a wide range of product offerings, it’s easy to lose sight of how things are performing on a micro level.
We tend to focus on the forest and not the trees when it comes to sales, looking at the big picture, but not always focusing on the smaller elements that bring things into focus.
This is a mistake on some levels, because we can learn a lot more about our sales efforts if we actually dive into the minutia of individual product sales. Sales data analysis will help you do this.
By using a detailed data analysis, you can look at products and determine which ones are underperforming. You can then refine this even further, breaking it down by category, demographic, or any other division you’d like.
Armed with this knowledge, you can then either improve your product offering by removing underperforming items or figure out how to sell them more effectively. In some instances, you may even come up with new product variations based around your bestselling products.
2. Create Better Price Points and Value Propositions
Presenting the right value proposition to potential customers can be the difference between making a sale and going home empty handed. Yet many companies still struggle with value propositions.
Companies that rely on sales data analytics learn that creating value propositions that focus on audience segments instead of taking a one size fits all approach can have a dramatic impact on sales.
This is because no matter how specifically targeted a product is, odds are that your customer base is made up of people from a wide range of different demographics.
You might not know this, though, if you aren’t analyzing your sales data.
Armed with that knowledge, it’s much easier to break down your customers into different groups and better understand their needs. With that information, you can then create value propositions that speak to each group, instead of taking a broad-based approach that misses the mark for many potential buyers.
This same approach applies to pricing.
When launching a new product or considering a price change for a popular item, you can gain valuable insights by looking at the data points you’ve collected over time.
Understanding these numbers will help you compare how your new price points are doing in comparison. You may even find that sometimes raising prices actually spurs more sales. The catch is that you wouldn’t know any of this with certainty if you weren’t actually collecting and examining your sales data.
3. Become More Agile and Innovative
One of the constants of the business world is that things are always changing. New products, new innovations, new competitors, new regulations…nothing ever stays static for long.
That makes running a business a real challenge if you’re averse to change. Keeping up with all these changes can be a full time job in itself. If you’re only seeing and reacting to changes as they occur, you’re too late.
Sales data analysis can be a huge help here, ensuring you’re able to spot trends and changes before they actually happen. They can even help you find ways to innovate in your space, keeping you a step ahead of the competition.
4. Better Sales Forecasts
It really should go without saying, but your sales data is an invaluable tool when it comes to make forecasts for the coming months, quarter, or year.
We’ve written extensively about how valuable sales forecasts are (and how to find the perfect methodology for your business), but at the heart of all of them is an understanding of previous data.
To know where you’re going, you’ll have to look at where you’ve been. The more detailed your sales data is, the more accurate and detailed you’ll be when looking toward the future.
Honestly, this benefit alone makes ensuring you’re properly tracking your data worth it.
Beyond that, you can also use this information as a measuring stick to see that you’re trending in the right direction, how you compare to your industry as a whole, and more. Understanding this data will allow you to be better informed and make better decisions.
5. Set Quotas and Bonuses
We just discussed how you can use sales data analysis to make projections for the future for your company, but you can also use it to make projections for your sales team members too.
With the sheer amount of data points you have access to these days, we can break down numbers across a wide spectrum. We can take bird’s eye macro level views of things, or drill down deep into the micro details.
One of the more micro levels we can examine is our individual sales professionals’ performance.
Understanding how each sales team member is performing can help you help them be even more successful.
For example, it a team member is underperforming, you may want to spend more time with them on training, or have them work with a mentor or shadow one of your successful salespeople.
On the other hand, if your sales pro is killing it in terms of deals closed, you may look for ways to help them improve their performance even further, or pick their brain on what’s working so you can share it with the rest of your team.
Beyond that, the knowledge of your team’s individual performances will help you set better, more attainable quotas and goals for them instead of just creating generic quotas based on year over year numbers.
6. Improve Customer Retention
In business, you want to make sure you’re giving all of your customers the best service possible – but we also want to be sure we’re focusing on our highest value customers whenever we can.
Do you know who your highest value customers are? If you’re tracking your sales data, you will.
Every year, companies spend untold millions of dollars trying to lure in new customers. But, if you’re not taking care of the customers you already have, you’re leaving a significant amount of money on the table.
Because of that you want to be sure you’re retaining your top customers – because as this study shows, increasing retention rates can have a dramatic impact on your bottom line.
How can sales data analysis help? Let’s run through some scenarios.
Data analysis will not only show you your top customers, but it can help you spot customers trending up in that category as well, Focusing on these clients can help transition them into the upper echelon of your customers.
Conversely, looking at the data can show you clients moving in the wrong direction – allowing you to reach out and find out why they’re buying less. With an open line of communication (most clients, even when unhappy, never voice their complaints directly unless you ask), you can rebuild the relationship and solve any problems.
And finally, you’ll be able to see your recent purchases and reach out to those clients to see if they’re happy or if they have any issues you can resolve.
Customer retention is one of the easiest ways to improve your bottom line – you’ve already done the hard part and convinced them to do business with you. Now make sure you keep them buying your products.
7. Locate Cross and Upselling Opportunities
Building on that last point, we can also use our customer sales data to increase sales by upselling and cross selling.
Statistics show that you’ll have a significantly higher chance of success when selling to someone who’s already done business with you as opposed to a new client. And with sales data available, you can see who has made purchases from you recently and what they bought.
From there, it’s a simple matter of reaching out with additional offers. Even better, you can use the sales data info you have to create suggested items for those customers then offer them up direct.
Upselling and cross selling are easy ways to increase revenue – and they become even simpler to implement when you base your offerings off recent sales data.
8. Better Pipeline Management
Next up, having a better understanding of your sales data can help you better manage your sales pipeline.
The sales pipeline is the lifeline of any business that makes money by selling. It’s where all your leads are, it tells you where they’re at on the buyer’s journey, and it offers valuable insights into what your chances of success are for each in progress deal.
By comparing similar customer data, you can effectively determine how likely leads in your pipeline are to close, how quickly they might make a purchase, and what tools will help them make a decision.
A healthy, organized sales pipeline is critical to your success – let your previous sales data help you find the big wins that are just waiting to happen.
9. Better Targeted Marketing
As mentioned earlier, companies spend hundreds of millions of dollars a year on acquiring new customers. Much of this money is spent in marketing.
What if we could make better use of our marketing dollars though? Well, with sales data, we can do just that.
By looking at sales data for our best customers, we build marketing and advertising campaigns that are designed to appeal to potential customers just like them. By doing this, we can spend less time and money wooing customers who either aren’t interested or aren’t likely to convert into repeat business.
Beyond that, analyzing your data will also allow you to determine which marketing materials are most effective, so you can create more assets like the ones that actually convert.
Better marketing can save you money, increase your revenue, and help you close deals faster and more efficiently. Let your sales data show you the way to better marketing.
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What Sales Data Do I Need?
By this point, the benefits of collecting sales data should be obvious. There are a lot of different ways you can collect this information (which is slightly beyond the scope of this article), but the biggest question most businesses have is “what sales data should I be collecting?”
Here are some of the most important metrics you need to be tracking to grow your business in the coming year.
We kick things off with the most obvious choice. One of the key goals of sales data analysis is in growing revenue, and revenue is generated through sales, so it only makes sense that you’d want to track sales growth.
This category should be broken down in a variety of ways – by specific time periods, month over month, quarter over quarter, year over year, and so on.
Tracking growth can help you spot trends in time to either correct them or capitalize on them.
Another key performance indicator you’ll want to track religiously are your sales targets. Without a target, how will you ever know if you’ve hit the mark?
Here, you’ll set a goal – it could be revenue, units sold, deals closed, meetings booked, or whatever else you feel is relevant – and then compare successes to the target over time.
If you’re hitting targets consistently, you may be aiming too low. If you’re missing targets regularly, you’re either too ambitious or there’s a problem in your sales system that needs addressing.
If your sales pipeline is running optimally, you’ll be able to look at all of your in progress deals at a glance. Knowing what you have in the works isn’t enough, though – in a best case scenario, you’ll also be able to rank these opportunities according to their chances of closing.
Knowing which opportunities have the best chance of success will allow you to prioritize them so you focus on the easy wins first.
Lead Conversion Rate
Here, you’ll be able to tell how many of your sales team’s leads are turning into sales. Knowing how many leads converts allows you to reverse engineer the sales process to learn what worked in terms of closing the deal – and that’s information you can then apply to other deals in your pipeline.
Average Conversion Time
Sales velocity is important – every company wants to close deals as quickly as possible. By tracking average conversion time, you’ll have a better understanding of how long deals take to close, from first contact to final sale.
This can be invaluable for forecasting purposes, for determining quotas, and figuring out a lot of other important metrics. It can also give you an overview of how efficiently your sales pipeline is working.
Understanding the value of the sales in your pipeline is hugely valuable from a forecasting standpoint and for understanding where you are in relation to your revenue goals.
The value of your sales pipeline cannot be understated – knowing the potential value of the deals in progress at any given time can help in the decision making process for your business.
Lifetime Customer Value
Earlier, we talked about how analyzing sales data could help you find your most valuable customers so you could better focus on them and offer additional products through cross and upselling.
One of the ways you can find out who these customers are is by tracking the lifetime customer value of everyone who buys from you. With this metric, you’ll know who your best customers are, how much they spend with you, and what they’re buying – all important when you’re trying to cross sell additional products to them.
In this day and age, if you’re not tracking your sales data you’re operating at a disadvantage and your competitors are likely outpacing you in key growth areas.
The good news is that analyzing sales data is easier than ever thanks to modern technology – and getting detailed reports that break down every key metric you could ever want to track is as simple as pushing some buttons and creating reports.
The effort will more than pay for itself in the long run too. As this article demonstrates, there’s a wealth of insight that can be gleaned by looking at your sales data. It’s useful for seeing where you’ve been, forecasting where you’re going, ensuring your customers are getting the best service possible, and helping your sales team find success.
If you’re not already tracking your sales data, we hope this article has opened your eyes to all of its benefits. And we’d be happy to help you get started or refine your process.
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Accent Technologies is the first and only SaaS company to bring together Sales AI and Content Management in a true Revenue Enablement Platform. We provide both sales and marketing with better visibility into the performance of their teams. This drives revenue through intelligent recommendations for complex sales scenarios and provides the data for rich analytics that power better coaching, forecasting, and long-term customer support. Learn more about our solutions or request a live demo to see it in action.