Ultimate sales analytics guide to increasing your revenue
The performance of your team was below expectations, and your reps will not meet the sales forecast for the quarter. You have an intuition that an increase in sales cadence might improve the performance. However, you’re confused if you should trust your gut instinct.
That’s where sales analytics proves useful. It helps in making data-backed and informed business decisions so that your sales team can grow stronger, and your company can increase profitability.
In a survey of 1000+ organizations by McKinsey, fast-growing sales organizations were found to use analytics more effectively than others. Let’s get started with understanding the basics of sales data analytics.
What is sales analytics and why does your sales team need it?
Sales analytics is using your sales data for generating actionable intelligence to improve your sales performance. Sales teams also use it to dissect the success of their previous sales campaigns and forecasting future sales goals.
Regular sales data analytics keeps your sales reps accountable and aids the optimization of sales activities so that you can improve your revenue.
However, with a plethora of software, there’s a lot of data generated. Sales leaders and management should carefully choose the metrics and tools they rely on for growing their business.
8 types of sales analytics to take analysis to the next level
McKinsey found that analytics tools are deployed across four primary sales areas. In this section, you’ll learn about the most common types of sales and marketing analytics that can generate invaluable insights for growing your business.
1. Pricing analytics
Can you pinpoint who your customers are and what value they find in your products? If you’re a large company with multiple products at different price points, then you might have relied on guesswork to understand your customers’ needs, motivations, and their willingness to pay. In doing so, you may have missed out on opportunities to optimize your revenue.
Smart pricing analytics can give you a handle of your past performance. You can identify the price tiers that work for your customers and modify the pricing accordingly to improve profitability. Here are the top two pricing metrics that you need to track:
1. Willingness to pay (WTP)/Price sensitivity - This metric tells you the maximum amount a customer is willing to pay for your products or services. For instance, look at the results of a case study of the YouTube premium below that our friends at Price Intelligently did.
We can establish that:
- old demographic of YouTube is less likely to pay for using the platform,
- their target audience of millennials is comfortable with a price of $11.89.
2. Feature Value - Do you know which features of your product are the most important for your customers? If you’re a SaaS company, this information is useful for packaging your product features into different tiers.
Price Intelligently recommends you to conduct a tradeoff feature analysis. Instead of asking customers to choose one feature, it involves letting them pick their most favorite and least favorite feature. With this, you have more information to understand what that your customers care the most about.
There are a couple of more KPIs related to pricing that we’ll explore later in the article.
2. Market size analytics
Is there a sufficient growth potential for your products and services? You need to know the size of the market to conclude about the same. Market size analytics helps you estimate the ceilings for your sales team.
A few ways to get started include studying industry reports (government sources or otherwise) and the financial data of your top competitors, and surveying your customers.
3. Non-customer analytics
Instead of understanding your customers, non-customer analytics focuses on identifying people that aren’t buying from you and getting their qualitative feedback through open-ended questions.
How is it valuable for you?
Your churning customers can reveal fundamental flaws and unmet needs in the product. You might also find an opportunity for expanding your business. So email questionnaires to them, else call them directly to get constructive feedback.
4. Competitor analytics
A key information that can improve your product performance is an understanding of how your competitors stack up against you. You can leverage competitor analysis tools, business journals, and the like for gaining intelligence on whom you’re against and what they are doing better.
But nothing beats calling your competition as their prospect and analyzing how they pitch their product. Such analytics can reveal the changes you need to make in your pitch, pricing, and even the product.
5. Pipeline velocity
How much revenue do you have coming through per sales cycle, and how quickly are leads moving through your funnel? Here’s the formula for pipeline velocity (PV) that tells you these aspects:
Any change in your opportunities, win rate, deal size, and sales cycle length will affect PV, thereby enabling targeted improvements to your sales process. However, you need to dissect the root cause of the spikes and drops in these metrics.
If you want to increase your sales speed and drive more revenue in less time, then assess the above variables, evaluate how to improve these individual numbers, make your sales process more efficient and improve your sales coaching.
And that’s how you build a better and fast moving sales team!
6. Sales channel analytics
Do you know which channels are the most effective in raking revenue for your products? If you don’t, then it’s time to evaluate which channels are working, which ones you need to stop spending time on, and which channels present new opportunities.
It’s easier to perform a channel analysis of online channels as most marketing and sales tools have analytics baked into the product. On the other hand, offline channels require careful documentation of metrics in order to identify the patterns and evaluate the performance.
Ultimately, this analytics is about understanding your growth and profit margins from every channel to measure their effectiveness.
7. Sales forecasting analytics
Forecasting the customer demand for your products helps you understand what your business will look like in the future. Such sales forecast analysis is usually performed by leveraging your historical sales data. It enables sales leaders to predict revenue numbers and make informed business decisions on advertising, hiring, and the like.
Sales managers can use it to check the pulse on business-generating activities and mobilize SDRs to take calculated actions to arrive where you want.
8. Brand analytics
Branding isn’t simply about creating branding guidelines about the use of your assets. It’s about how your customers perceive your company and the products. Brand analytics helps you compare your brand’s image with the competition.
For quantitative data, you can log into your Google Analytics account and check the percentage of branded traffic, source of visits, repeat visitors, and the like.
Image source: slideshare.net
To get the relevant data for brand analytics, don't forget to collect qualitative information through blogs, surveys, reviews, customer service and sales conversations, social media mentions, and the like.
You’ll learn key performance metrics related to the above nine types of sales data analytics later. Next, let’s look at ready-to-use dashboards and templates for conducting a sales analysis.
Sales analytics examples, templates, and dashboards
Now that you’re ready to conduct sales analytics, here are some real-world examples for inspiration.
Want a quick overview of the current workflow of your sales reps? Then use this dashboard to view the important metrics about calls, emails, and SMS. Also, check whether your sales numbers are going down or up as compared to the previous month.
Resource type: Dashboard
Why use this: To get a quick understanding of your ongoing sales efforts and where you need to focus on to improve important performance metrics.
The leaderboard shows key performance metrics for your sales team and the individual performance of every rep. You can use the real-time overview of any sales metric, benchmark an individual’s performance, and create a healthy competition in your team.
Resource type: Dashboard
Why use this: You can motivate your sales team to reach their targets.
You can integrate your ERP and CRM data to get a 360-degree view of your sales performance. It shows almost all business related aspects, including your liquidity over time, lead sources, opportunity amount, gross margin over time, performance, profitability, and more.
Resource type: Dashboard
Why use this: You can automate sales data preparation tasks (from multiple sources) and get cross-functional sales business intelligence.
You get a high-level view of the current deals in your pipeline through this dashboard. It also shows their expected value, the confidence level of the deal, and the reps who brought them in. Sales managers can leverage it to understand trends, keep the team organized, and conduct sales activities for ensuring a healthy pipeline.
Resource type: Dashboard
Why use this: Know the current status of the deals in your pipeline with their value to your company.
Get an elegant visual insight into the key metrics related to your business, including your revenue, expenses, profit, lead conversion funnel, lead conversions by industry and source, and the like.
Resource type: Dashboard
Why use this: Visually analyze and build sales analysis reports with key performance indicators related to your business.
Track the business metrics of utmost importance like your number of sales, revenue, churn rate, profit, cost, and the like, monthly, with this template. The C-suite can use this operational and strategic data to monitor the performance of the sales organization.
Resource type: Template
Why use this: To get a handle of the high-level metrics that might indicate a need for change in your sales strategy.
Are you planning a big event like a conference? Then, use this template to track the key metrics, including tickets sold, gross sales, sales by ticket type, and other event stats.
Resource type: Template
Why use this: You can monitor your event stats, the tickets that are the most popular, and your progress towards hitting your sales target.
With this sales analytics dashboard, sales teams get a holistic understanding of how they are faring and find out if they will hit their quota. You can even compare the forecast to your quota and explore what’s the best case forecast vs. commit case forecast.
Resource type: Dashboard
Why use this: Sales teams can create their quarterly forecasts and compare YoY performance with it.
Want to know your top-selling product and the channels that contribute to maximum sales? Then this dashboard is for you. You can also access incremental sales by the campaign, cost of goods sold, point of purchase, and the product performance.
Resource type: Example
Why use this: Find out which of your products are selling the best and which ones are lagging.
This is a powerful sales dashboard that individual reps can use for tracking their progress through metrics such as meetings booked, sales opportunities, deals won, close rate, time tracking, and the like. They can even compare their performance with previous days, weeks, or months, to analyze if they are improving.
Resource type: Example
Why use this: Gives your sales reps a visual overview of their performance with actionable intelligence on where they need to double down their efforts.
Want to understand how your business fared last quarter and where you failed to achieve your goals? Then the executive dashboard is what you need. You can analyze the bookings made by your sales team, identify your most valuable products, and marketing campaigns, understand the reason for the loss of opportunities, and analyze how your quarter’s performance compared with recent history.
Resource type: Example
Why use this: It’s a great starting point for your quarterly business review.
You can explore more sales dashboards examples and templates here.
5 sales analytics tools & software that make the process easier
While analytics tools are great to have, you need to ensure that they deliver useful information. A study by Harvard Business Review found that 83% of metrics on sales dashboards are unmanageable (i.e. reps cannot use it right away).
Below are five sales analytics tools that present sales data that your reps can directly use to improve their performance.
Close has a powerful inbuilt reporting feature that presents actionable insights. You can monitor key metrics, understand what your customers value, benchmark your top performing sales reps, and more, all inside this sales CRM.
How It Helps You Master Sales Analysis: Take out manual data entry out of your sales operations, make your organization more productive, and bring more success to your team.
It lets you visually analyze your sales CRM data and generates helpful reports/dashboards to track your key performance indicators. You can complement your existing sales process with its sales analytics capabilities to identify the weaknesses in your performance, opportunities for growth, and much more.
How It Helps You Master Sales Analysis: Build powerful sales analysis reports and dashboards through its drag and drop interface simply by syncing your CRM data.
This tool offers sales performance analytics, sales pipeline analytics, and other sales reports with actionable information for revenue operations professionals. You can also use it to give personalized coaching to your sales reps.
How It Helps You Master Sales Analysis: It lets you visualize your historical sales trends, set accurate sales forecasts and goals for your team.
Want to improve your sales execution? Then Clari is the perfect tool to access actionable analytics in real-time. Sales managers can leverage it to instantly spot risks and direct their reps to focus on the right deals. And sales leaders can track their KPIs in one place to quickly get an overview of your week-over-week performance in the quarter.
This tool has artificial intelligence based predictive analytics that takes out the guesswork out of sales forecasting and monitors the health of your pipeline. It even assigns an opportunity score indicating the deals that are likely to win.
How It Helps You Master Sales Analysis: It syncs your data from dozens of business systems (like your CRM, email, and the like) and uses AI to drive predictable revenue for your business.
This cloud based tool empowers your sales team with smart insights on sales forecasting, quota attainment, and sales activities that bring more revenue. It uses real-time data to visualize your sales performance that you can share and collaborate with your team easily.
How It Helps You Master Sales Analysis: The browser-based real-time business analytics tool enables efficient and effective performance for your sales team as they can focus on the deals that drive more revenue.
18 sales analytics metrics & KPIs to start tracking
Here’s a look at a few important sales KPIs that are fundamental to sales analytics success. I’ve clubbed related metrics into pairs for your convenience.
Monthly sales growth and new MRR
These are foundational business metrics. Monthly sales growth measures the increase in your sales revenue every month. New MRR tells you the recurring revenue you added this month by acquiring new customers or by lowering your cost of acquisition.
Sales opportunities created and pipeline value
Sales opportunities created determines the number of opportunities a rep is creating. Pipeline value tells you the value of the current deals in your pipeline. Both of them are great ways to gauge the health of your pipeline.
Customer lifetime value (LTV), customer acquisition cost (CAC), and Average purchase value
LTV is the measure of the revenue you generate in the lifetime of an average customer. This value is important to determine what you should spend for acquiring new customers (CAC).
The average purchase value tells you the average amount a customer spends on your products. If you can optimize your sales process and increase this KPI, it would mean multiplying the results of your efforts.
The KPI tells you how an individual product is performing. It becomes important when you sell multiple products. However, you need additional contextual information like experimentation in your sales strategy, the release of a new product by your competitor, and the like.
Lead conversion rate and average conversion time
Lead conversion rate is a useful KPI for a high-level overview of the performance of your sales team and the effectiveness of their pitches. The average conversion time tells you the productivity of your sales funnel by telling you the amount of time it takes to convert a lead.
Calls and emails per rep and sales leaderboard
Do you know the number of people your SDRs are talking to? The first metric gauges the volume of calls and emails your sales team makes over a specific time frame (week, month, or year).
The leaderboard gives you real-time insights into the performance of individual members and induces a friendly competition in your sales team.
Sales targets and retention & retention/churn rates
Nothing will motivate and rally your sales team better than realistic targets. So ensure that you use historical data to set attainable goals for them.
Modern sales, especially for SaaS companies, isn’t simply about getting customers onboard. Retention and churn are the KPIs that should be used to track your lost customers and revenue over time.
Sales by contact method and sales by region
Do you know the contact methods that are the most successful in generating sales for your product? Sales by contact method tell you the outreach method that’s most likely to generate sales for your company.
Sales by region, similarly, finds out the geographies in the world where your customers are coming from and the markets that are most valuable for your company.
Average profit margin
While revenue is great, profits are what lead to the growth of a company. The average profit margin tells you the average profit you make across all your products, services, bundles, and sales channels.
Most of the KPIs mentioned above will need additional contextual information to find out a larger, meaningful trend and a corresponding actionable.
Sales analytics can reveal hidden relationships and trends in your sales data that can substantially improve your performance.
However for most executives, gleaning at crunched numbers in a spreadsheet is daunting. So you can leverage sales analytics tools that present the information in an easily consumable visual format.
It’s time to create your first sales analysis report. Pick a software, a few relevant sales analytics metrics, and use a resource from this article to get started!
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