Sales Analytics for Crushing Business Profits
Any entrepreneur starts a business with an aim to fulfill a need in society and expects profits in return. To succeed in business, an entrepreneur must understand the emerging trends to strategically position for gain.
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By using sales analytics, one can understand, predict sales and access the capability to increase sales results in the future. Sales analytics is the way to scale your business.
In this article, we are going to look at the importance of sales analytics, how to do a sales analysis and some of the sales analytics tools available.
Why Use Sales Analytics?
To have a clear understanding of why sales analytics is important, let us briefly see what it includes. Through sales analytics, you have access to data on who bought your product, their location, number of inquiries received, the number of people following your social media activities, number of repeat customers and more.
All this data will help you understand if your brand is recognizable and how well or poorly it is performing. Simply put, by using the sales analytics system you can track sales, profits, and even monitor your competition.
If you are still wondering why you still need this system, here are some points to help you get a clearer picture:
- By understanding the market, you can create targeted ads and this helps in reducing unnecessary expenditure on campaigns.
- Sales analysis will help you identify gaps in the supply lines. Note that the supply line management is key to how your product is handled and how it reaches the target customer.
- By analyzing sales, you get feedback that enables you to improve your product or service. This helps in customer segmentation and you can test your product to find out how effective it is.
- It helps with customer retention. Research by Friedric Reichheld of Bain and Company indicates that increasing customer retention rate by only 5%, you’ll increase your profits by 25%-95%. It is only through sales data that you know which customers to give more attention to. Thus, it reduces the cost of doing business.
- Sales analytics helps you assess your team’s performance, especially if you have a presence in different locations. This makes it easier to deploy your sales team effectively.
- When analyzing your sales, you also keep in mind your competitors. Sales analytics also have software that enables you to see your competitors’ traffic.
How Do You Do a Sales Analysis?
To do a sales analysis, the paramount thing is the collection of data and its structuring. Apart from that, the data should be available at a central point, with real-time updates. Not forgetting the time and place of a sale.
Considering that you may have many data sources, it’s crucial to determine the data that will help you create a good sales report. You may have to pick out some data such as the specific product or service, a list of customers, repeat or new, the location and the time of purchase. This enables you to use data that is more specific to your business goals.
Another important factor in measuring performance is the period and the frequency of your data. Have a set frequency of your analysis quarterly, half-year, monthly. In all these, there should be a clear overview of daily sales.
Do not forget to capture seasonal data, which includes holiday eves, summer or winter. Either by understanding how different seasons affect your product sales increase or decrease, you can effectively plan.
Once all-important data is collected then you can analyze the results. The sales team, production, and the accounts team to have a clear picture of all departments should do a critical analysis. Moreover, all your staff members share the same vision.
Lastly, visualize your data through a graph. Graphs and charts make it easy to compare data and to explain your goals to the sales team and other stakeholders.
Tools Used in Sales Analytics
There are different sales analytics tools you can use. This tool should be available to the sales representatives and the sales analysis team. Most of these tools are software programs that track customers to email exchanges.
Tools like Google analytic and web analytic are good examples because they are designed to specifically track consumer activity on the internet.
With so many tools available it’s good that you can select tools that apply to specific business needs. For instance, competitor analysis tools are a must-have for any business that wants to grow their profits. Various competitor tools can be categorized into social media, content, SEO, and tools to analyze competitor ads and emails.
Take a tool like SEMRush, a tool widely known for use in SEO analysis. The ability to pull a competitor’s backlinks and rank monitoring makes these tools very useful.
Apart from analyzing competitors, other important tools include Zoho Analytics, a tool for performing in-depth sales analysis. Zoho CRM, Hubspot CRM, Salesforce CRM, Base CRM, Pipedrive CRM, Insightly CRM. All these tools play a vital role in complementing your existing sales analysis and CRM application. You also get to understand your sales team’s performance, strengths, and weaknesses.
Since it’s not possible to have all these tools (actually it would be a bad idea to try and use so many tools), the best thing is to first understand your business goals. Then select a tool that will help you measure your business key performance indicators (KPIs). Keep in mind other factors to consider when selecting a suitable tool such as pricing, whether in house or cloud-based, number of users, and how often the tool is upgraded.
Sales analysis is an important part of any business. As such it should be in-depth, look at all the channels of a product stage. This way you’ll understand your customers, their demands and how to fulfill them. You will also better invest in products that ensure repeat sales. Keep in mind that customer fulfillment makes it possible to have repeat customers.
Sales analytics helps a business cut down cost, by knowing when to intensify advertising. It will also help you fulfill orders at the right time because the analytics help you track your suppliers and their performance. Simply, through sales analytics, you can manage a product’s life cycle.