Keeping A Check: 7 Sales Analysis Techniques to Measure Performance
If we were to give you a rope, a bunch of donuts, and a ribbon, you’d probably eat the tacos and then wonder what the other two are meant for. However, had we told you that you have to conduct a Donut race, you’d probably be able to string the three together and do the needful. Dealing with sales-related data isn’t much different. The data is abundant, but not many know how to make sense out of it. Well, that’s what we’re here for.
While in our previous article we had introduced you to sales reporting and sales analytics, in this piece we’d help you actually do it right. One of the biggest challenges when it comes to sales reporting is to make a judgment call about which dataset you need to analyze to understand whether you’re headed in the right direction or not. To add to that, you also need to know how to analyze that particular piece of information.
Therefore it becomes imperative to know what all techniques to have at your disposal to measure the performance of your sales vertical. Before we get too deep into this discussion, do take a look at some of the key sales funnel metrics that you can track for your business.
Top Sales Analysis Techniques To Measure Performance
Sales Trend Analysis
As the name suggests, sales trend analysis studies common patterns (or trends!) over a specific period of time to understand the market demand. It is especially helpful for product companies as it lets you know when to restock your product or how many units to manufacture. An increasing trend would tell you to up your game, and a decreasing trend would warn you to stay low to avoid wastage.
Trend analysis can also let you figure out the shortcomings of your sales pipeline. For instance, if you see a rising trend in the number of qualified leads your sales team gets but a rather stagnant trend in sales conversion, then you’d need to investigate that.
Predictive Sales Analysis
In Predictive Sales Analysis too, you study common patterns but not of a recent time. Instead, you look at data from several years and analysis it to forecast sales risks and opportunities going ahead. Before you jump the gun and worry how you’d manage to study so much data, know that Predictive Sales Analysis is not done manually. You’ve to invest in tools for it that can digest data and make the required predictions.
You’re wondering why you’d take so much hassle. As a matter of fact, Predictive Analysis enables you to make the right sales choices and convert faster. These tools integrate with your CRM software and offer suggestions about different leads and the best offer you can place for them to convert. Invariably, 50% of the global financial planning & analysis teams (FP & A) have described predictive analytics as a priority in 2020.
Source: Aberdeen
Sales Pipeline Analysis
For the unacquainted, a sales pipeline is the end-to-end sales process you follow to convert a prospect into a paying customer (No, it’s not the same as a sales funnel!). Sales Pipeline Analysis is one of the most straightforward of them all.
In this, you study all data related to your process, including the number of customers, the number of leads that convert at each stage, average deal size, etc. Not just that, pipeline analysis also includes monitoring the performance of each sales team member. You can know the number of leads they convert out of the total assigned to them, the average time they take to convert a lead, the value each conversion brings, and more.
Source: Engage Bay
In this, you study all data related to your process, including the number of customers, the number of leads that convert at each stage, average deal size, etc. Not just that, pipeline analysis also includes monitoring the performance of each sales team member. You can know the number of leads they convert out of the total assigned to them, the average time they take to convert a lead, the value each conversion brings, and more.
Product Sales Analysis
Imagine McDonald’s launched a new franchise in a new Tier-2 city in India, and after three months of operations, they found that the McPuff has barely been sold in the store whereas there has been a shortage of McVeggie supplies on several occasions. Doesn’t take rocket science to figure out their next step, right?
They’d simply increase the supply of ingredients for McVeggie and reduce (or maybe even discontinue!) McPuff supply there. That’s what Product Sales Analysis does. Brands that sell multiple products monitor the demand for different products to know items that are lagging sales. That way they know exactly which product to promote more or even stop selling.
Source: Micro Strategy
Sales Effectiveness Analysis
If you’re looking to improve the individual performance of your sales team members, then sales effectiveness analysis is the way to go. In this, you essentially analyze the customer interactions of different members to understand at what point they convert, the patterns that convert more, the pitches that work the best.
Not just that, you also understand the effectiveness of different sales members’ pitches for different customer personas. For instance, if you find that one of your salespeople is great with the SMB crowd but unable to convert startups, you assign them leads accordingly.
Diagnostic Analysis
You could consider Diagnostic Analysis as a step post Trends Sales Analysis. While the trends analysis helps you identify common patterns, you study them further to understand the rationale behind them.
A diagnostic analysis is where you do a root cause analysis to identify problem areas and take corrective measures if needed. It also helps you read your sales data more practically instead of making unrealistic goals and assumptions.
Source: Center for Sales Strategy
For instance, you witness a steep rise in sales in a month. Now, through trends analysis, you’d assume that there’s a rising trend in demand. So, you’d keep the targets for the next month proportionately high. However, if you conduct a diagnostic analysis you’d be able to link the jump in sales directly to a PR funding news that was released at the beginning of the month. Invariably, the news would fade and the numbers might dwindle. Setting high targets would be unreasonable here since the trend was momentary.
Market Research
As the adage goes, old is gold. The oldest sales analysis techniques are where you survey your customer and know their stance better. Market research never goes out of style. Rather, it gives you insight into what your customer really wants.
You can contact your customers over email, in-store, or via phone, the key is to keep a temp-check on where the market is swaying. A part of market research is also to study your competitors. As experts say, the best way to find the keywords for your website is by scanning your competitor’s website. Similarly, the best way to know the latest in the market is by understanding your competitor’s pricing, strategies, and sales and marketing efforts.
Source: Question Pro
Wrapping it Up
While it’s great to know all these sales analysis techniques, it is equally important to remember the popular proverb,
“Do not put each foot in a different boat.”
It is important to be enthusiastic about improving your sales process. However, if you try to hold too many strings at once, soon you’d lose control of them all. Instead, make an informed choice. For instance, product sales analysis may not be needed for a SaaS product company but is extremely crucial for an ECommerce brand.
Ideally, you should set a goal for your sales team and use analysis techniques that’d help you track how close you’re to that goal. If you’re looking to improve individual performance, go for Sales Effectiveness Analysis. If you want to up your conversion, Sales Pipeline Analysis may be the way to go.
