You’ve spent countless hours interviewing candidates to build your most powerful sales team yet. You encourage the team with an inspirational speech each week. Then, when the week comes to an end, you identify which of your sales team members made the most sales using your metrics rather than a specialized sales analysis. Perhaps the sales team member is given a monetary incentive, or a prestigious title such as ‘Employee of the Week.’
Here’s a truth. If you simply look at your sales statistics for a week and focus entirely on what was sold, you are doing yourself and your organization a big disservice. That’s not to imply that the data you’re looking at isn’t significant, but they’re far from complete.
It is hard to make educated and data-driven decisions that will benefit your business today and, in the future. Here is where sales analysis comes into play.
This blog will dive into the details of:
- What is sales analysis?
- Its significance,
- The various types and uses of sales analysis reports.
Hopefully, by the end of this blog you should be able to understand why you can’t reach your sales goals until you analyze current and past data. With that said, let’s jump right in!
What is Sales Analysis?
Sales analysis is the study of a company’s sales over time. Sales analysis reports are generated at various periods by different firms; they may be generated daily, weekly, monthly, quarterly, or annually. The goal of sales analysis is to evaluate the company’s performance and determine how it may be improved.
Significance of Sales Analysis
Incorporating sales analysis within the sales department has a number of advantages. Now, let’s have a look at a couple of them.
You make data driven judgements
Effective and consistent sales analysis reveals how your sales strategy is unfolding and assesses the success of each rep on your team in real-time, aiding you in making judgements solely based on data and fact, making it more reliable.
Locates your most profitable clients
Your sales representatives should spend the bulk of their time connecting with high-quality leads that bring value to your business. As a result, identifying the qualities of consumers who spend the most money on your items and remain loyal to your firm is important, and sales analysis reports help you identify them.
Provides knowledge about market trends
Are you on the verge of launching a new product? Are you preparing your next steps in terms of replenishing inventory, implementing schemes, and changing your production process (if applicable)? To assist these efforts, a sales analysis report highlights market opportunities and trends.
Improves your client service
You can keep your consumers pleased and build stronger relationships if you can figure out why a sale closed. Once you have a deeper understanding of their demands and your brand has gained trust, you could upsell and cross-sell to these existing clients, improving client relationships in the process.
Increases your market reach
Analysis and interpretation of sales data will yield information about your non-customers. The data is important for honing your sales pitches and customizing your future marketing operations in the hopes of gaining new consumers.
Various Uses of Sales Analysis Reports
Let’s get to the main reason you’re here now. Here are the different uses of sales analysis reports you might generate on a regular basis to help you make better business decisions.
Represents both actual and projected sales
Sales analysis report depicts a company’s real sales for a given time period — a quarter, a year, or any time range that management deems relevant.
Sales analysis reports for bigger businesses may only provide data for a single company, division, or area. A small-business owner could be more interested in segmenting sales by geography or product. Smaller and more specialized enterprises with a single location are small enough that generic sales statistics can be used.
Managers frequently utilise sales analysis reports to discover market opportunities and places where volume may be increased. For example, a client may have a history of greater sales throughout specific times of the year. This information can be utilised to solicit extra business during busy hours. Actual sales may be compared to predicted sales in a sales analysis report.
Compare New vs. Repeat Sales
A sales analysis might contain the percentage of revenue generated by existing customers against new customers, as well as a breakdown of sales by customer group.
This type of split might be beneficial for managers who want to see if they’re keeping customers. A new versus repeat analysis can be used to assess the efficacy of new advertising, new goods, and the purposeful targeting of new consumer categories.
Analyze Product Demand
One of the patterns shown by a sales analysis report is whether or not there is an issue with product demand. A long-term drop in sales for a particular product might suggest a number of issues. Market share may be declining due to competition, or due to other goods sold by the same company.
A long-term drop may indicate that it is time to discontinue sales of the product or redesign the brand. In certain situations, a decrease might indicate that the demands of customers are changing. Managers can use this information to rebrand or repackage the product for a different purpose or market.
Estimate Market Prices
A sales analysis report can be used to determine market values in various businesses, such as residential real estate. Based on what the market has paid in the past, a product’s characteristics or attributes may define its market worth.
Specific characteristics of a home, for example, may affect its value to rise or fall. The number of bedrooms, square footage, fireplaces, and swimming pools are examples of such amenities. This similar idea may be used to a product’s raw materials, brand name, or reputation in different sectors of an industry.
Report on Product Performance
How quickly are products selling? Which products are the most profitable Your product performance report can provide answers to such inquiries.
This report should ideally inform you how many products you’ve sold in a particular time period, as well as a breakdown of things sold by month or week. You can use the product performance report to evaluate which products are worthwhile to invest in and which should not be reordered. A good product performance report will tell you when an item was initially sold and when it was last sold. If there is a significant gap between the first and last sale dates, it may suggest that an item is not selling as quickly as it should.
Report on Sales by Product and Product Type
Having a high-level picture of sales is useful, but to gain more relevant insights, you must be detailed with your data.
This is where product sales reports come in hand. This sort of analysis makes it simple to discover your top (and worst) selling products, allowing you to choose the best course of action. If a specific product is doing well, for example, you might want to consider purchasing more of it. On the other hand, if a product isn’t performing well, you’d want to know as soon as possible so you can run promotions before the season expires.
Sales by product type, on the other hand, assists you in gaining an understanding of your income at the category level. If you have a lot of data, this is an excellent report to run.
Sales Report Per Customer or Customer Group
It is a good idea to produce reports on “sales per customer” or “sales per customer group.” This allows you to identify VIP consumers as well as those who aren’t completely engaged with your business, allowing you to adapt your marketing and communications accordingly.
You might host special VIP events or programmes to encourage loyalty if you know who your top clients are. If, on the other side, you want to engage inactive clients, this report will help you find them quickly, and aid in developing strategies accordingly.
*Understand that sales analysis is not always possible*
In rare cases, your company may be unable to evaluate sales data reports.
If your firm hasn’t monitored sales analytics prior to today, you have no history to draw from. The same is true if your firm simply opened its doors this week, real or virtual.
Perhaps you have data kept on an older software or system that you couldn’t transfer to your current system, so it’s practically frozen in time. In such a scenario, it is worthwhile to hire an IT specialist to transfer the data. Most all-in-one CRM software can import data from a number of sources, so once you have it, you shouldn’t have any trouble getting it into your CRM.
Another circumstance in which you cannot examine sales data is if the data has been lost or distorted. This can be caused by catastrophic computer system failure in the workplace, as well as the computer being unintentionally disposed of or even the terrible occurrence of an office fire. In such a case, you are unlikely to be able to retrieve the data. Start from the beginning, back up your systems frequently, and be careful about keeping your sales statistics up to date.
These are all situations that you might want to take into consideration before setting up a sales analysis.
And that’s that!
A sales analysis is more than just how much money your sales people bring into your company. A market research analysis may help you understand more about your consumers and what makes them tick. Through sales analytics, you may also gain insight into your sales people and their performance.
We additionally have a blog on the various different sales tools you could use to notice and follow your company’s growth, in case you’re interested to know more!
All in all, a sales analysis is vital to the evaluation and evolution of a any business.