An Introduction to Sales Reporting: What, Why and How
As a sales manager, you probably have many hats to wear. After all, your day begins with looking at the previous day’s performance, assigning targets for the day ahead, and monitoring progress throughout the day. Sometimes you also have to assist your team members with difficult customers and even give a pep talk to a representative dealing with a tough customer. Amongst it all, another task on your plate is to prepare a sales report–daily, monthly, quarterly, annually…we could go on.
We understand punching in numbers and collating data may not be the favourite part of your work, but we’re here to change that. What if we tell you that preparing the sales report is the best possible tool you can generate for your team. It will not only help them perform better but also make your work far easier than before. In fact, 50% of the sales teams today use data for sales forecasts and are able to sell better through data on customer’s propensity to buy. Not just that, more than 57% of high-performing sales teams use sales analytics and 43% rely on customer insights to improve their processes.
Needless to say, in the present times, sales and data go hand-in-hand. For instance, consider you are running a high-value sales offer, the right sales reporting can help you achieve the best results. If you are continuously recording your offer’s performance, you’d know when to tweak your strategy if the campaign is not doing well and if it’s doing well, you’ll know exactly what is working for you.
Now that we’ve convinced you that leveraging data for sales is crucial, let’s deal with the elephant in the room and introduce you to sales reporting.
What is Sales Reporting?
Sales reporting is a cumulative summary of all the activities that take place over a specific period of time. The sales report comprises data that helps you analyze the performance of your sales team and overall growth.
How? A sales report allows you to track revenue, opportunity status, and the overall health of your pipeline. Keep in mind that you can add any metric that you like while making your sales report. In simpler words, a sales report is the answer to all your ‘whats’ and ‘whys’.
- What is the average deal size you’re getting?
- What is the overall and individual conversion rate?
- Why is a sales rep able to get a lot of prospects but no closed deals?
- Why are customers choosing to go with a specific plan over the other?
- Why is a sales rep able to give a high conversion rate?
- Why is there a delay in taking a lead to a closed deal stage?
We could go on about you get the gist, right? A sales report is essentially the collation and analysis of any and every possible data relevant to your sales team.
Why Sales Reporting Matters
One of the biggest reasons why sales reporting matters is that it provides you with context. Let’s say that your team has run a campaign in the past month and you have to run a similar campaign this month. A sales report will help you understand the intricacies of your previous strategy and allow it to replicate it.
Even if you are not running a similar campaign, you are aware of all your strengths and weakness, because of the data that you acquired through the sales report.
Similarly, sales reporting also allows you to have the necessary visibility to lead your sales team. A sales report can help you understand each aspect of the sales funnel and identify the problem areas. On the other hand, it can also help you identify where your team is unable to close deals and you can figure out a way to help them in the necessary areas.
To know more about how to manage your sales funnel, read our blog now.
How to Prepare a Sales Report
Now that you know that a sales report is important for both context and visibility, you should also know how to prepare a sales report the right way.
Set An Objective
This point may sound obvious to you but it’s an important step that many sales managers tend to ignore. On a regular day, you are thrown a bunch of numbers in your face. It’s important to edit them out to get a clearer picture. The same logic also applies while creating a sales report.
Without having an objective, your sales report will be all over the place. As we said earlier, it’s crucial that your sales report has the right context. To do so, you need to set an objective and create your report based on the different types of sales analysis reports.
Understand Your Audience
Just like any other aspect of a business, a sales manager has to put their audience/customer first. While you’re probably already thinking about the external consumer, you have to understand your internal consumer or audience while building a sales report.
For instance, the sales report that you prepare for your marketing depart will have different aspects and data than a report for the finance department. Hence, it’s crucial to understand your audience and what they need while preparing your sales report.
Collate Relevant Data
The next step of creating a sales report is to add data. However, as it is with other aspects of sales reporting, you should ensure that you’re only adding relevant data. Once you start collating data for your report, the next step is to filter, analyze, edit, and add just the relevant data.
This is where it ties into the two previous points. You need to ensure that the data that you include is aligned with your goal and is for the right audience. You can include relevant data like choosing the right KPIs, sales numbers, etc. along with a comparison of your previous campaigns to measure the difference in data.
Choose Visuals Over Text
While it’s important to have the right data in your sales report, it’s also important to present it the right way. Visual information can be processed 60,000 times faster than text and is easier to remember. Researches tell that people tend to remember only 20% of what they read, while around 37% of the population are visual learners.
Source: Polishing Your Presentation
Adding visual elements like images, pie charts, tables, etc. are extremely effective at conveying your information easier. Not just that, they’re also incredibly time-saving. A busy CEO does not have time to go through paragraphs of data and then interpret it. Instead, they can just look at a pie chart or a graph and get the information that they need.
Add Context for Your Data
They say that numbers don’t lie but if you don’t provide context for your data, you’re subjecting the data up to be interpreted in a thousand different ways. For instance, businesses all over the globe suffered due to the COVID-19 pandemic. Needless to say, you too may have witnessed a sudden drop in sales numbers. Does that mean your team is lacking? Not really.
While it is good to compare your targets with previous results, it is equally important to judge the numbers keeping in mind the present context. Rest, your sales team would end up running a wild goose chase, trying to meet targets that are impractical in the present circumstances.
Don’t Forget the Summary
A good sales report should always include a summary at the beginning. While it’s not important, it certainly adds immense value to the attention you pay to detail as a sales manager.
A summary provides an overview and gives the reader a key takeaway. It also allows them to set expectations before they begin reading the entire report. Similarly, it gives busy CEOs and executives the exact information they are looking for without having to go through the report.
Over to You
Sales reporting might not be the most glamorous aspect of your job, but it is most certainly an important one. A good sales report provides you with all the necessary information that helps you do your job as a sales manager and lead your team.
With the right data, relevant context, and the correct objective, your sales report can help the management achieve their sales goals by analyzing and referencing it when needed at any point in time. All said and done, remember that as a sales manager, finding data would never be a challenge. The real challenge is in using it well. That’s where an effective sales report comes into the picture.
It is always good to remember the words of Carly Fiorina, former chief executive officer, Hewlett Packard,
“The goal is to turn data into information and information into insight.”