Sales Data: What is It & How to Analyze Sales Data?

The Most Significant Metrics

Which sales data is relevant to you? The answer depends on the scale and the industry of your business as well as the individual peculiarities of your workflow. 

Most organizations are typically interested in the following indicators, listed in alphabetical order.

If you analyze the above-listed sales data, it should give you enough food for thought. After you get used to the process, you might add more indicators to the list.

How to Store and Structure the Information

Years ago, professionals used to rely on spreadsheets to save and process sales data. But today, CRM systems are indispensable for this task. Feel free to adopt any of these solutions, depending on your budget and technological preferences.

Many entrepreneurs stick to this old-school instrument because of the following advantages:

• You can use spreadsheets at no cost (Open Office or Google Sheets).

• They are handy for real-time overviews.

• They can carry out automated calculations.

Spreadsheets are optimal for processing rather than compact databases. Their largest shortcoming consists in the lack of opportunities for automated data input. You might waste too much effort typing all the sales data in the spreadsheet. You might want to spend the precious time on high-priority tasks instead. Due to the human factor, that data might be prone to errors. When you make a presentation, spreadsheets lack visualization instruments.

Reasons to Opt for a CRM

This type of software will save you from the necessity to type the data manually. It will keep records of all your connections, activities and financial operations. 

Most CRMs are available both on stationary computers and portable gadgets so you can check the recent updates and react to them without any delay.

Such systems feature powerful instruments for sales data analysis. The more information they gather, the more valuable insights they will compile. 

The main drawback of CRMs is their complexity. First, you need to explain to your staff why you need this solution. Second, you need to integrate it and train your specialists to use it.

Why Do You Need All the Information That You Gathered

You should collect sales data, not for the sake of identifying your past failures and achievements. You need to use it to plan your activities in the future and boost your performance.

Estimate How Likely You Will Be to Close the Deals

Thanks to the analysis, you should realize how likely you are to close a deal at each phase of the pipeline. So look at the leads in the pipeline and try to estimate your upcoming revenue.

Filter those leads that you failed to close in the past and analyze why this happened. Check how often you will be meeting these failure conditions in a certain period of time in the future. 

For instance, 42% of your leads have nearly the same characteristics as those that failed in the past. Accordingly, you are likely to successfully close approximately 58% of the leads.

If you multiply the ratio of potentially successful leads by the price of each lead, you will estimate the current amount of revenue in the pipeline. 

Also, you can get to know the likelihood of your leads progressing to the following phase of the pipeline and the customer acquisition cost.

Forecast Your Sales

The forecasts are synonymous with the likelihood only in one case: if the conditions of your sales in the future will be identical to the current ones. Yet most likely, they will change — and to predict the new circumstances of your deals, you should rely on historical data. This will enable you to estimate your business growth rate and revenue for each particular set of market conditions.

For instance, the seasonal demand for your product might skyrocket in Spring each year. This year, this might happen earlier — yet the increase of the demand might be a bit lower than usual. Comparing today's data with the statistics from the past, you should analyze why this happened and what you can do to stimulate the demand.

The historical data that you obtained might not reliably assess the current situation if your business grew. If you employ more people, have more departments and sell many product units, old patterns might fail to work. In this case, be ready to experiment with new methods and tools. To collect enough sales data for a substantial analysis, you should keep using the new approach for a couple of weeks or months, keeping a thorough record of all your activities.

Improve Sales

Forecasting is a useful but passive action. But the results of the analysis allow you to behave proactively. If you want to boost your sales, it does not imply that your team should work harder or longer hours. You can estimate which techniques and approaches deliver the best results and start using them more often than the others. When your staff sees that they are performing better without suffering from work overload, it will inspire them to further achievements.

Get Rid of Bottlenecks

One of the easiest ways to obtain meaningful sales data is to examine your pipeline. Even the most talented and experienced team always loses more deals than it closes, this rule is inevitable. 

Yet you should continuously strive for perfection — and this process starts with analyzing your bottlenecks.

Examine your past sales records. At which stage do your leads fail most often? Why does it happen? What can you do to improve the situation? For instance, you might find out that it takes your staff too long to follow up with clients. Is it because they fail to receive timely notifications about the need to follow up? If so, configure your CRM so that it sends notifications to customers. Do you need more people in your sales team? Then, hire more. 

Do you have enough people but they are busy with other tasks? Then, restructure your workflow so that your specialists can focus on high-priority tasks. A certain set of data might lead you to multiple solutions. Feel free to test them one by one, measuring the efficiency of each approach.

A common issue for most organizations is the time that the deals spend at each phase of the pipeline. Ideally, they should move forward as rapidly as possible. Again, here you should examine a particular part of the pipeline and discuss with your staff the potential ways out.

The most forward-thinking software solutions today have in-built AI. The primary competitive edge of the artificial intellect over its live human counterpart consists in the fact that it can process large bulks of data at a great speed and with great precision. 

Yet a human mind might be better at finding creative unorthodox solutions. So if you employ an AI-powered system, do not regard the solutions that it offers you as a panacea. Treat it just as you treat ideas generated by people, realizing that they might have both their strong and weak sides.

Improve Your Sales

Once you have accumulated and processed enough data, it is time to improve your workflow. 

These are just a few examples of what you can do to sell more of your product and boost your revenue.

Generate More Leads

To expand your client base, you do not necessarily need to spend large amounts of funds on advertising. 

You might ask your most loyal customers to spread the word about you on social media in exchange for a reward (a discount, a special gift, or some other personalized perks). To detect such customers, use your CRM.

Learn to prioritize your leads. Their quality is more important than the sheer quantity. When adding new leads to your database, you should separate those who are potentially interested in your product from those who can purchase it immediately.
Not all people have enough funds, time, and other resources to order their goods or services.
Your priority is the customers who are able to make a purchase today. However, you should not completely discard those who would like to test the free version of your product.
You should get in touch with them too — but only after you finalize the deals with top-priority clients.

Prolong Your Cold Calls

When it comes to cold leads, there is one golden rule to remember: the longer you talk to clients to the higher your chances to convince them to buy your product.
You have more time to describe the benefits of your goods or services, to get to know your customers, to establish trust with them and to schedule a meeting.
Do not worry if your sales conversion rate is low for cold leads — it is a common situation. You can improve it by conducting training for your staff on how to prolong phone conversations.

Strengthen Relationships with Leads and Clients

When offering your product to your target audience, always strive to meet the demands of these people.
They should not spend their savings on your goods or services simply because you are a reputable professional and you produce top-notch objects.
Your product should fit into the system of needs and values of your potential customers. For this, you need to understand their worldview, tastes and priorities very well.

Do you believe that personalized emails have a higher click-through rate? Run A/B tests to verify this assumption. Save your records and conclusions in your CRM.

New clients are always less likely to respond to you if compared to loyal customers. Yet it does not mean that they do not pay attention to your products!
The optimal strategy for interacting with "silent" customers is to keep them informed about your updates on social media.
For the already existing client base, automated marketing campaigns should deliver good results (this involves sending targeted emails to their inboxes).

Enhance Communications

Try to rethink the structure and the contents of the emails that you send to your clients.
The templates that you use should be customized for each particular phase of the pipeline.
If you find space for improvement, carry out A/B tests with diverse approaches and implement only the best ideas.
To decide whether your email communications are successful, look for these two parameters in the CRM: how often do customers reply to you and how long does it take for your team to send out messages?

Do not be afraid to move away from conventional practices. For instance, most entrepreneurs know that it is useless to reach out to their target audience on weekends. Yet in your particular case, this rule might be untrue.
To break erroneous stereotypes, send out emails to your customers on different days of the week and check their responses.
It might turn out that people pay more attention to your messages on Saturdays simply because they are not overloaded with miscellaneous information on that day — but they still open their mailbox.
Repeat this experiment with phone calls and other channels of communication that you use. The sales data that you get thanks to these activities will give a significant competitive edge to your company.

Make Your CRM Work

CRMs are powerful and versatile systems — yet some entrepreneurs fail to use the entire scope of their opportunities. If you purchased this system and convinced all your staffers to start using it, then you should make the most of its capabilities!

Let us imagine that you discovered certain dependencies. For instance, your conversion rate increases when you follow up emails with phone calls. In this case, you should set notifications in the CRM that will remind staff members to call your clients every time after sending them an email.

Customers appreciate it when you remember their personal data: their birthday, their preferences and the date of their last purchase. You can conveniently store all this information in the client's profile of a CRM.

This type of software is indispensable for scheduling meetings. It facilitates the negotiations about the time and place of the presentation because one party knows from the onset when the other one has enough free time.

A CRM provides you with sufficient instruments to carry out the following tasks:

• Approach your potential customers

• Establish relationships with them

• Tell your target audience about the benefits of your goods and services

• Close the deal

You will only benefit from each of these stages if you learn to correctly gather and interpret the data.

Staff Reports

Business owners and top managers should avoid making all the decisions single-handedly. Normally, it makes sense to discuss the sales process with your staff. You should ask them to compile reports according to a unified template and hold regular meetings to discuss the insights you obtained. These are the aims and specifics of different types of reports.

• Daily. You see how many tasks each of your team members completed. You make sure that they are on the right path to achieve the desired commercial indicators.

• Weekly. Analyze not individual performance but the trends of collective work. Allow your staff to express their opinion on their working practices: which ones are the most efficient and which ones need fine-tuning.

• Monthly. These reports are ideal for analyzing the metrics.

• Annual. These are the reports that your shareholders will be most interested in. You can display your achievements and future plans there.

Thanks to reports, you will see a clear correlation between the metrics and your revenue. When making decisions, you will rely not only on your business intuition but on the statistics gathered by all your staff.

Visualize the Information with Dashboards

You should not consume the information alone in your office. Hold meetings and share your insights with your team. They should understand why they compile the reports and how you use them.
All the decision-makers in your organization should learn to process sales data just like you.

When preparing a presentation for your staff, avoid squeezing in all the information that you obtained. Sift through it and single out only the most meaningful statistics.
Treat it as a narrative: compile a convincing story with facts and numbers that would push your listeners toward a certain conclusion.

Target your presentation to the individuals who you are talking to. Your financial department might ask you to focus on revenue. Your IT team might ask you about the impact of CRM on your sales.
When speaking in front of a large audience, you might focus on the most general subjects.
But it would be wise to compile targeted reports in advance and mail them to the recipients so that they come to the meeting being already aware of the state of affairs in their field.

Avoid presenting your information on spreadsheets because they lack visualization. Dashboards are much better suited for this purpose. They offer different instruments to work with diverse metrics.
They enable you to visualize the statistics intelligibly. Your staff will better memorize the information that you want to convey to them.

Final Thoughts