How to Perform a Sales Analysis (Step-by-Step): Methods & Metrics

How to Perform a Sales Analysis (Step-by-Step): Methods & Metrics

If you want to achieve your sales goals month after month, then guesswork and intuition aren’t your best friends. You need to perform a strategic sales analysis and get cold, hard data.

How often should you preform a sale analysis and where do you start? That's what we're going to share here.

As you’ll see, sales data analysis provides a wealth of intelligence about your sales strategy, the performance of your team, and much more. It’s a competitive advantage you can’t afford to miss out on. So let’s get started with the basics.

What is Sales Analysis?

Sales analysis is using data to evaluate sales team performance. It provides valuable insights about the top performing and underperforming products/services, selling and market opportunities, and includes sales forecasting.

Regular sales data analysis provides an understanding of the products your customers are buying and helps you dissect why they are behaving in a certain way. You can also find patterns in your lead conversions and drop offs. All of these aspects enable you to optimize your sales process.

With an intelligent sales CRM like Close, you get actionable reports to keep a close eye on essential sales metrics and KPIs. A continuous sales analysis helps improve your sales strategy over time so you can build sustainable, long-term growth.

Importance and Benefits of Sales Analysis

Do you know which products from your company fare the best? What about which ones sell the worst? How is your sales cycle doing?

Sales data analytics examines sales reports to evaluate how your company is performing against its goals. Here’s why you need to integrate it into your sales operations.

  • Make data-driven decisions instead of relying on gut instinct: Effective and regular sales analysis unveils how your sales plan is panning out and measures the performance of every individual rep on your team in real-time.
  • Find your most profitable customers: Your sales reps should spend the majority of their time engaging with high-quality leads that add value to your company. So it’s invaluable to identify the characteristics of customers that spend the most money on your products and remain loyal to your company.
  • Get awareness of the market trends: Are you preparing to launch a new product? Are you planning your future course of action in terms of stocking inventory, rolling out schemes, and modifying your manufacturing process (if applicable)? A sales analysis report identifies market opportunities and trends to support these efforts.
  • Serve your customers better: If you can nail down why a deal closed, you can keep your customers happy and forge deeper relationships. Once you understand their needs better and your brand develops goodwill, you can also upsell and cross-sell to these existing customers.
  • Expand your market reach: Sales data analysis and interpretation will also fetch intel on your non-customers. The information is invaluable for sharpening your sales pitch and personalizing your future marketing activities to find new customers.

Now that you’re convinced about conducting sales analysis, let’s look at the different types of sales analysis methods.

9 Types of Sales Analysis Methods and Techniques

Based on your sales goals, you can refer to different kinds of sales analysis reports for getting insights. Here are nine types of analysis methods you need to know about.

1. Sales Trend Analysis

This type of sales analysis looks for patterns in sales data (whether they are going up or down) over a specific timeframe. A micro trend might last for a week for a specific product, while a macro trend might last for a quarter over a range of products.

For instance, the graph below shows that a company has seen an increase in ‘orders shipped’ and ‘sales.’ However, the ratio of sales per orders shipped is decreasing, which the company might want to investigate.

Sales Trend Analysis Graph Screenshot (Example)

Why sales teams should measure this: Sales pattern analysis is an easy way to track progress towards your sales goals while simultaneously understanding the sales patterns in specific products, customers, or geographies.

2. Sales Performance Analysis

If you want to gauge the effectiveness of your sales strategy and sales team performance, a sales performance analysis can come in handy. It can involve conducting a strictly financial analysis based on the sales revenue generated and how it’s meeting your sales targets.

Based on what you intend to achieve, you can also seek to evaluate parameters like:

  • An improvement in your win rates
  • Faster closing rate
  • Quicker revenue growth
  • Better price margins

You can work on the gaps found in a sales performance analysis to put your business back on track to “where you need to be.”

Why sales teams should measure this: Team performance analytics shows how you are currently faring vs. the expected performance. It’s useful for sales managers to coach their reps and fix the vulnerabilities in their sales process/pipeline.

3. Predictive Sales Analytics

Predictive analytics software can automate sales forecasting for you by predicting your future risks and opportunities. 50% of the global financial planning & analysis teams (FP & A) have described predictive analytics as a priority moving into the future.

Predictive Sales Analytics as a Top Priority for Understanding Your Pipeline (Screenshot)

By conducting past sales analysis, you can predict the likelihood of a prospect converting into a customer and make personalized offers to leads that are ready to buy. You can also increase the lifetime value of existing customers by identifying upselling and cross-selling opportunities in customer behavior.

Why sales teams should measure this: Integrating predictive sales technology with a sales CRM enables data-backed suggestions for improving your conversions and accurate sales forecast analysis.

--> Protip: You can also use a sales forecasting template to streamline the process.

4. Sales Pipeline Analysis

I’ve already told you how sales pipeline metrics can be misleading. However regular pipeline review meetings are important to get the context of the deals your sales reps are after. Such sessions involve sales pipeline analytics that looks at the activities your prospects go through before they convert or fall off.

Close offers robust sales pipeline forecasting analytics by letting you quickly review your pipeline through the Opportunities page, and also gives you an Opportunity Funnel Report to see clear analytics of your pipeline and funnel health.

Opportunity Funnel Report in Close (Sales Pipeline Analysis)

Why sales teams should measure this: It lets you gain context around a deal so that you can instruct your sales reps to perform sales activities that carry their deals forward. It can also highlight which closed deals are most valuable.

5. Product Sales Analysis

If your company offers many products, then you need to conduct regular product sales analysis to find out if specific items (or offerings) are overcrowding your product lining. You can use KPIs and revenue bar charts to look at the product sales overall or in a specific time frame.

Product Sales Analysis Graph (Screenshot)

Image source:

Why sales teams should measure this: It lets you approach product sales data from various angles like demographics, product popularity, and the like. Multi-product firms can use the results from this analysis to take constructive actions, like discontinuing unprofitable products, that drag down the company's sales.

6. Sales Effectiveness Analytics

Sales management reports monitor the effectiveness of your sales reps and help managers identify selling opportunities in customer interactions. Essentially, these reports are about finding meaningful patterns in your data and actionable insights to improve the sales performance of your team--and help them close more deals.

With sales management software like Close, you can trust your sales reps will stay organized and efficient, and spend time on deals that positively affect your bottom line. Our dashboards help you identify the traits of top performers so you can shape your sales training (and increase future sales!)

You can even share feedback with your reps for filling the gaps in sales skills and improve their effectiveness.

Sales Effectiveness Analytics (Activity Comparison Screenshot in Close CRM)

Why sales teams should measure this: Sales effectiveness analytics not only improves the quality of your business decisions, it also enables automating tedious business processes. That means your sales reps can spend more time selling, and your sales force can grow stronger.

7. Diagnostic Analysis

This sales analysis involves justifying the trends and observations in sales-related data with reasonings. For example, the increased competition in the industry might lead to a decrease in your product sales. Sales leaders conduct internal diagnostics to identify the roadblocks for their teams, list their observations, and brainstorm ways to improve.

The Center for Sales Strategy has prepared a diagnostic report template list   you can use as a starting point for auditing your performance.

Diagnostics Sales Analysis (Screenshot of Workflow)

For your first audit, you can follow the five steps laid out for conducting an internal diagnostic of your sales process.

Why sales teams should measure this: It lets you review the health of your sales organization by giving detailed insights into different aspects of your sales operations.

8. Prescriptive Analysis

Remember the “do this, not that” series? Prescriptive analytics involves generating predictive inferences about customers and prospects. It empowers your SDRs to know the right prospect opportunities they should go after and the offer they need to pitch them (“sell this, not that”).

Prescriptive Sales Analysis Screenshot (Template to Follow)

Your reps are empowered with a granular game plan for every prospect (based on the analysis of past successful sales pursuits.) They know the specific sales action, including the sales cadence (i.e. the sequence of touch points across email, phone calls, rich media, and social media), to increase the probability of closing a deal.

To analyze your cadence further and develop better analysis, try Sequence Reporting in Close. This shows you response rates for each step in your email sequences, giving you the right analytics to optimize and improve your overall results.

Sequence Reporting Analysis Funnel in Close CRM (Screenshot)

Why sales teams should measure this: Guided selling through prescriptive analytics will make the jobs of your sales reps easier. It will also improve the effectiveness of your salespeople and raise your win rates.

9. Market Research

Good old market research helps companies make informed business decisions.

The technique could involve surveying your customers over the phone, by email, or in person. You can also study your competitors and general sales statistics.

Once you get a good handle on the market conditions, you can evaluate your company’s performance and identify the weaknesses of your sales team. It also identifies potential business opportunities and gives a better understanding of your customers’ needs, thereby improving your sales effectiveness.

Why sales teams should measure this: Sales data analysis and interpretation are based on your past sales data, but market research can fill in the gaps of such analyses. For sales directors, it serves as a gateway into the future and can help reduce customer churn and increase long-term sales.

How to Perform Sales Analysis: A 3-Step Process

Once you’ve chosen a sales analysis technique, here are three simple steps to create your first sales analysis report.

Step 1: Identify the Data You Want to Track

You need to analyze the right kind of sales data for generating meaningful insights that positively affect your bottom line. Begin with objectives around the departments or products whose sales performance you want to focus on. Here are a few you can get started with:

Next, you need to identify your data sources, the variables that are relevant to your above objectives, and the performance metrics you’ll rely on.

And finally, choose a time period for collecting your data. You can consider choosing a weekly, monthly, quarterly, or yearly period depending on your requirements. Regular tracking is essential, and you may want to conduct analysis more frequently during special promotions.

In order to gain deeper insights into your sales performance, it is essential to consider various analytical methods, including SWOT analysis.

Step 2: Choose a Sales Analysis Tool and Analyze Your Data

Microsoft Excel is a robust tool for sales data analysis and interpretation. To get started, ensure that you have sufficient quantity and quality of data to make informed decisions. You may have to lengthen the period of your data to arrive at meaningful behavioral patterns.

With Close, your sales reps can operate efficiently and dedicate maximum time to selling. Indeed much of the sales analytics and reporting is available inside the CRM.

Once you’ve crunched numbers, you should get a historical overview of your sales performance and insights into the success or failure of your team. You can draw preliminary conclusions at this stage.

Step 3: Share Your Results With Relevant Stakeholders

It’s time to present your sales data analysis. Unless you’re asked to share the process you used to arrive at the results, only show the key findings. You can use graphs and visuals to help your audience interpret the data.

For example: If you lead a team and want to share your sales team performance with the CEO, then you might include charts around your sales goals, your best-selling products, the revenue and expenses of your team, and the like.

Overall, keep your presentation actionable and easily digestible. Depending on the nature of your meeting and the role of the stakeholder, you may want to dissect the sales trends and create recommendations for improving your performance.

How Often Should You Perform a Sales Analysis?

Sales analysis should be performed on a regular basis, but the acutal cadence will depend on the sales metrics you're tracking, overall performance, and type of sales reports you're analyzing.

Some teams may do daily sales reports to see if product sales are going up, while others might use monthly sales reports or weekly sales reports. It all depends on what you're tracking and what sales results you're hoping to see.

Your sales goals can also impact how often you should perform sales analysis. In general, expect to track over arching metrics like net sales or deal size on a monthly basis, and more specific metrics, like calls or emails sent, on a shorter basis.

Keep in mind, you need to track short and long term trends and account for changes like holidays when looking at YOY metrics.

Top 10 Sales Analysis Metrics & KPIs

Sales reporting and analysis will mean dealing with lots of data. Below let’s look at the top ten sales analysis metrics. If you want to explore more, check out this full list of sales KPIs that you can track.

1. Monthly Sales Growth

This metric tells us how your sales revenue has grown or shrunk month-over-month. It’s an actionable metric that you can use to optimize your sales process and strategies.

Monthly Sales Growth Activity Overview in Close

How to calculate it: (Current month’s performance - previous month’s performance)/100

2. Sales Opportunities

This KPI dissects the effectiveness of your sales process by telling you about the opportunities your sales reps are creating. You can use it to forecast sales and determine which opportunities are worth the most.

What to track: Total number of opportunities created by the sales team in a specified period

3. Lead Conversion Rate

This gives a broad overview of how your entire team is performing by telling you how many leads are converting into sales. You can work backward from it to understand why and how leads are converted, then prepare a foolproof plan for acquiring future customers.

How to calculate it: (Number of leads that converted into opportunity in a given period)/(Number of leads created in this period)

4. Average Conversion Time

This sales analysis metric gives an insight into the productivity of your funnel by telling you how long it takes for a lead to convert. Alongside lead conversion rate, sales opportunities, and other metrics, this KPI gives you a bird’s eye view of your sales pipeline.

Opportunity and Lead Sales Analytics Statistics and KPIs in Close

How to calculate it: Sum of all lead conversion times within a specified period/number of lead conversion times included in that period

5. Monthly Onboarding and Demo Calls Booked

Prospects that have made their way this far in your funnel are highly likely to convert. So tracking this metric month-over-month is an excellent primer for determining the health of your sales funnel.

What to track: # of onboarding & demo calls booked

6. Pipeline Value

This metric tells you the expected revenue from all the sales opportunities in a specific time frame. You get a quick overview of the current value of the deals in the pipeline. And the progress of your sales reps towards your goals.

How to calculate it: Value of projected sale x percentage of confidence that they will Close.

If you're looking to optimize your pricing strategy, our post on value metrics is a must-read.

7. Sales Targets

This KPI gives historical data on how your team is performing in terms of revenue generated, the number of product subscriptions sold, and the like. Instead of setting ambitious sales targets, you should set attainable future goals so that your reps remain motivated and don’t burn out.

8. Customer Lifetime Value (LTV)

This sales analysis metric tells you how much revenue an average customer generates for you during their lifetime with your company. You can use it to predict your future revenue, but you need a large data set for accurate assumptions.

With LTV, you can make informed decisions on how much your company can spend on acquiring new customers (CAC).

How to calculate it: Sum of all revenue generated by an individual customer

9. Calls and Emails Per Rep

This metric tells you the volume of calls and emails that your sales team is making over a month, week, or day. Besides functioning as a sales productivity metric for sales reps, it gives sales managers and leaders an idea if something is off in your sales funnel.

What to track: Sum of all calls and emails made by the sales team in a specified period.

10. New and Expansion Monthly Recurring Revenue (MRR)

For most SaaS companies, this is an important metric that tells you the number of paying customers multiplied by the average amount they pay.

How to calculate these two metrics:  The new MRR tells you additional recurring revenue you added by acquiring new customers (or lowering your acquisition cost). Expansion MRR is the revenue you collected from existing customers as they upgraded their plans.

If you’re just starting your sales process, then the above sales analytics metrics might overwhelm you. So resort to the basic AQC framework to stay at the top of your sales performance.

A = Activity (eg. the number of cold calls your team is making)

Q = Quality (eg. the actual number of decision-makers that your team gets to speak with on the phone)

C = Conversion (eg. how many sales your reps closed or how many demo calls they booked)

Ready to Start Winning at Sales Analysis?

Regular sales report analysis creates accountability, reveals insights about your customers, the traits of top-performing sales reps, and helps improve your entire sales process.

I've shown you the different types of sales analysis methods and given you a step-by-step strategy to perform your first sales analysis. Now, it’s your turn to leverage sales data analysis to improve the sales performance of your team.

Close's reporting features makes your sales analysis easier than ever. Watch a demo or try us free for 14 days.