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Sales Analytics

Sales analytics is the process of using available data to aid sales managers in decision-making. The idea is to use present and past information to predict future outcomes. Sales analytics helps salespeople identify, understand and improve on their patterns of success and failure.

Sales analytics is a way of analyzing data related to sales and marketing. Mainly, it's used for sales forecasting and prediction of sales trends. It is also used for reviewing the effectiveness of existing sales initiatives and programs.

Sales analytics is a powerful tool that allows businesses to improve sales forecasting and identify potential risks early on. It measures the performance of each stage of the sales funnel. It uses various metrics and KPIs to optimize sales and boost revenue.

What is sales analytics?

Sales analytics is a set of systems and processes used to measure, record, and evaluate sales outcomes. It can also be defined as the process in which a company gathers and analyses information related to its sales and sales practices.

Sales analytics is any statistical data that provides evidence in the form of information regarding sales. Sales analytics allows managers to track and predict potential sales.

What are the benefits of sales analytics?

Sales analytics help you measure your ROI, find sales opportunities and provide insights into your buyers' behavior. The benefits of sales analytics are: 

  • Increased sales efficiency: Sales analytics can help improve your sales team's efficiency by revealing the best times to make calls and what types of calls to make. These insights can be used to optimize your sales resources so that they're focused on the right leads at the right time.
  • Improved customer service: With better insight into customer behavior, you can improve customer service by better meeting customer needs and expectations. For example, if most customers call in during lunchtime, you should increase staffing so that calls are answered quickly and efficiently.
  • Easier decision-making: Sales analytics helps you make better decisions by providing you with data that shows what worked and what didn't in the past. You can then replicate successful strategies and avoid repeating mistakes.
  • Improved sales performance: Sales analytics makes measuring how well your marketing efforts are working easier, so you can tweak them as needed to improve your results. This gives you a clearer understanding of which strategies are working for you and which aren't.
  • More efficient operations: Sales analytics helps determine what's working well with your current marketing efforts—and where improvements are needed—so you can cut down on wasted ad spend and improve ROI on your marketing budget.
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What are the top sales analytics applications?

Sales analytics can be used in the following ways:

  • Sales forecasting: Sales forecasting is a key part of any business that sells products and services. By analyzing historical sales data, you can predict future sales trends and identify potential problems before they happen.
  • Inventory management: Sales analytics can help you keep track of inventory levels and forecast when you need to order more stock. This allows you to avoid running out of stock or having large amounts of excess inventory.
  • Customer satisfaction analysis: You can use sales analytics to analyze customer satisfaction surveys and other customer feedback to improve your customer service and marketing efforts.
  • Marketing automation: With the right tools, sales analytics can be used to automate marketing campaigns by collecting data from social media sites, blogs, and other online sources about potential customers' interests and preferences so that your company can target them with relevant offers or information at just the right time in their buying cycle.

What are the various types of sales analytics methods?

Sales analytics is not just looking at historical sales numbers. It also uses predictive models that are based on historical data to make predictions about future sales. Sales analytics can also use artificial intelligence (AI) to help predict what might happen in the future.

The types of sales analytics are:

  • Descriptive sales analytics: Descriptive sales analytics is based on data collected after the event. For example, if a company sells a product to a customer and wants to know how long it took to pay for the product, this would be considered descriptive sales analytics.
  • Diagnostic sales analytics: Diagnostic sales analytics looks at historical data from the past and helps identify patterns or trends in the data that can help predict future outcomes. For example, if you want to know why customers are not buying your products, diagnostic sales analytics will help you find out what stops them from buying them.
  • Predictive sales analytics: Based on diagnostic results, predictive sales analytics looks at historical data but uses machine learning algorithms to predict what will happen in the future based on current trends or patterns found in the data. For example, you want to know how much revenue your business will make over the next 12 months because of increased demand for specific products or services. In that case, predictive sales analytics can help estimate this amount based on historical data and other factors, such as seasonal fluctuations or any other type of trend that may affect future revenues.
  • Prescriptive sales analytics: Prescriptive sales analytics takes predictive data and applies it in real time to guide how to proceed with an existing opportunity or prospect. This type of sales analytics identifies possible outcomes for various scenarios and recommends action plans that could help achieve those outcomes based on the available data and analysis results. For example, given the current situation, prescriptive analytics may suggest which channel or approach will yield the highest return on investment (ROI).

What are the important sales analytics metrics to track?

Some of the most important sales analytics metrics to track are

  1. Sales Growth: Sales growth shows how much more your company made this year than last. It measures the percentage increase in total sales over time. This metric often drives other metrics, such as average order value and conversion rate, because it also sets expectations for growth in these areas.
  2. Sales Target: Sales target is the amount of money you expect your team to sell during a specific period. 
  3. Sales per rep: Sales per rep is also known as selling productivity, and it represents the average number of sales made by each person in your team per month or quarter (depending on how frequently you want to monitor such data).
  4. Sales by region: Sales by region refers to which part of a country or market contributes most towards its total revenue generation. This data helps businesses analyze if they are targeting regions with the highest growth potential or need to allocate more resources toward certain areas to achieve maximum results.
  5. Sell-through rate: The percentage of products sold compared to the total number of products shipped. This metric helps you identify whether you're over-shipping or under-shipping your inventory.
  6. Sales per product: This metric helps you understand how much revenue each product generates. You can use this information to determine which products are profitable and which aren't.
  7. Pipeline velocity: The number of deals in your pipeline divided by the number of weeks it took to close them (in weeks). This metric lets you understand how quickly you're closing deals and whether they take too long. If a sale takes more than six weeks, it's likely not profitable for your business.
  8. Quote to close: The number of quotes that result in a sale divided by the total number of sections generated by sales reps (per week). This metric tells you how many new customers come through quotes and how many don't convert into customers after receiving a quote.
  9. Average purchase value: This metric is the average dollar amount of each sale. It helps you understand how much money you're making per sale.
  10. Sales conversion rate. This is how many leads turn into sales. The higher the conversion rate, the more likely people will buy from you instead of someone else.

How is analytics used in sales? 

Sales analytics can identify the effectiveness of different channels, accounts, or products by analyzing performance and forecasting sales. Sales analytics integrates best practices and lessons learned into predictive analytics models to forecast sales. 

It identifies and prioritizes the right leads at the right time to increase conversion rates. It has been used to help businesses grow by increasing revenue and providing greater transparency in sales performance and forecasting.

How can a CRM help with sales analytics?

CRM analytics also show you which markets and products your sales team should concentrate on. There are many other ways that CRM data can help you grow your business. With the right tools, you can gain valuable insights into your sales activities and use this information to increase revenues and reduce costs.

Here are some common ways in which a CRM can help with sales analytics:

  • Identify trends in customer behavior
  • Understand customer lifetime value (CLV)
  • Identify problems with your customer service operations
  • Measure the performance of your sales team
  • Measure customer satisfaction levels over time
  • Analyze critical metrics for each sale

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.

eNPS:

eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

How to run a sales data analysis?

Sales data analysis is one of the most important steps in the sales process. The analysis helps you identify trends and patterns in your sales performance. You can use this information to identify opportunities, predict future results and make better decisions.

Here is how to run a sales data analysis:

  1. Identify the metrics that matter most to your company.
  2. Get the correct data in place to run the analysis.
  3. Organize the data into a table or spreadsheet for easy analysis.
  4. Run a basic descriptive statistics report to get an overview of your data set.
  5. Look at the trend of each month separately and compare them with each other.
  6. Identify patterns within the data.

How to build an effective sales analytics strategy?

According to Salesforce, sales analytics can help you create a more efficient sales team, improve customer satisfaction, increase productivity and predict future revenue.

But how do you build an effective sales analytics strategy? Here are some steps to follow:

  1. Identify your goals
  2. Collect only the data that matters
  3. Pick the right tools
  4. Correlate data with actions
  5. Build dashboards and reports with clear visuals

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