Struggling to find new sales opportunities? Learn how to analyze sales data like a pro and craft a winning sales strategy to boost your business growth!
Very early in my professional career, I was introduced to this mantra: “In God we trust, rest all bring data”. And trust me, no pun intended, this has been one of the best success mantras ever.
Some fear rows and columns of unstructured data, some choose to ignore data while a few use the power of data to unlock growth.
In this blog post, I will demonstrate how to analyze sales data like a pro and boost your business growth.
How does analyzing sales data help companies?
Visualize a meeting called by senior executives – one of those urgent meetings to discuss missed sales goals.
Executives from sales, marketing, operations and other functions rushing into the meeting with their notebooks and laptops. Everyone seems to be stressed and anxious. There is an unsaid pressure on each attendee to provide meaningful information and suggestions.
In most such meetings – attendees seem to state facts. However, without the backing of correct data and adequate analysis, these are not facts. These are mere hypotheses.
And before you jump to any conclusion, each hypothesis needs to be proven right or wrong. How to prove them right or wrong?
Collect data – complete and correct data. Then, analyze sales data to unlock the real opportunities.
Confused?
Okay! Let’s go through an example.
Example: Factors Affecting Sales
We will use a fictional entity – Acme Adhesives for our case study. Let’s say Acme Adhesives missed their sales goal for the last quarter. There is an urgent meeting where executives from various functions have gathered to brainstorm.
Acme Adhesives is a manufacturing company that specializes in industrial adhesives such as hot melt adhesives, instant adhesives, pressure sensitive adhesives, threadlockers, structural adhesives and more.
What is their sales strategy?
- Team of sales representatives to manage key accounts (existing clients).
- Demand generation executives that identify new prospective clients. They use cold calling and email outreach to generate inquiries. Qualified leads are passed on to sales representatives for further action.
- PPC advertising on Google to generate new leads.
The image below represents the sales revenue generated in the last 17 months.
Reasons for decline in sales:
When asked to share information and insights for decline in sales, attendees present in the meeting cited the following reasons:
- There has been a reduction in relevant leads from marketing campaigns.
- We have lost many leads because of high pricing of products.
- Some of our competitors have offered aggressive discounts to clients.
- This is the outcome of slow-down in consumer demand for some of our top clients.
- Repeat sales from our existing clients have been much below expectations.
This is not an exhaustive list, but it covers some of the most common reasons that might be discussed during meetings about a decline in sales revenue.
The question is, are these reasons correct?
Do these point the team in the right direction to address declining sales?
Not until proven either right or wrong. And the only way to know is to analyze sales data.
Questions to Ask:
For the reasons mentioned above by executives of Acme Adhesives, we should ask for the following information:
- How many leads did we generate from each channel in the last quarter? Compare this to previous quarters – number of leads, cost per lead, click through rate.
- What percentage of leads were marked as relevant or qualified? Again, compare it to previous data.
- What percentage (and count) of leads did we lose due to pricing issues? This too needs to be compared to historical data. Was there an increase in count and percentage of leads lost due to high prices?
- What information do we have about discount offers from our competitors? Have we received any complaints from our customers? How many? How did we counter these complaints?
- Do we have data on slow-down in customer demand? Do we have data on forecasts for the affected industries?
- What has been Year-on-Year and Quarter-on-Quarter growth or decline for our top clients?
- How many clients with lower sales? What actions have we taken to address these?
These are a few counter-questions for reasons mentioned above. These questions will help the team deep-dive into data and separate facts from fiction.
Whenever your team members use words or phrases like “a lot of…”, “some of…” or “many…” – immediately ask them to STOP. I refer to these statements as DUMB Problem Statements. Read my blog post on how not to solve DUMB problems.
Do not entertain vague statements in meetings. Set the expectations right. All answers need to be backed up with quantitative data.
Examples of using sales data to support insights:
- 3 out of our top 10 clients have not placed any order in the last quarter
- 22% of our customers have informed respective account managers about discount offers from competitor A
- 36% of new leads from our marketing campaigns are from regions where we are not competitive due to high shipping costs
Do you notice the difference?
When reasons are backed up with correct and complete sales data, the team starts moving in the right direction.
Well, that’s not all. Now that we have set the context on why it is important to analyze sales data to unlock growth opportunities, let’s elaborate on how to accomplish this.
Unlocking the Power of Sales Data
Analysis of sales data should not be done when goals are missed! That’s too late. Analysis and actions have to be proactive.
How?
The first step is to use a CRM system for sales.
Create an SOP to be followed by the sales and marketing teams: how to use the CRM system to track and monitor sales.
The CRM reports and dashboards are to be used for regular monitoring – weekly or monthly. The frequency depends on the volume of sales and new leads. For most B2C companies, this could be daily.
Review the following when you analyze sales data:
- Volume of new leads
- Lead velocity: time takes to move from one stage to the next
- Conversion rate: compare conversion rates for each lead source, product category and individual sales representative
- Reasons for lost deals
Check the following periodically for your existing clients:
- Growth in comparison to the previous year or quarter
- Average order value: monitor the increase or decrease in average order value
- Contribution of each client to overall sales: ensure there is no over-reliance on one or a few customers.
- Order pipe-line for each customer
- Number and rate of new inquiries from existing customers
- NPS or Satisfaction score for each customer (I recommend using this Risk Scorecard to reduce customer churn)
Video Tutorial: How to Analyze Sales Data to Crush Your Sales Goals
This video is a live demonstration using real data to analyze sales data and set sales goals. In this video, I will show you the combined effect of improving your stage wise conversion for each stage in the sales funnel. This will help you close more deals and grow your revenue.
Conclusion
As a business owner and professional, you already know that the stakes are high. The rate of change in customer preferences is at an all time high. It is going to keep increasing. And, technology has reduced the barriers of entry for new competitors across industries.
Also, the emergence of Generative AI has made research easier than ever before. So any information that is available in the public domain is accessible to everyone – including your competitors.
The only exclusive information that you have is your proprietary business data. It would be a grave mistake not to use that information to its advantage.
Remember, proper and thorough analysis of sales data will simplify the complexities of growth. When you use structured data and analyze it, the insights lead you in the right direction.
- Ensure data collection is complete and correct – every information is captured in the correct format.
- Employees are well trained to record, analyze and understand data
- Data is reviewed as per pre-defined timelines
- Insights are documented, discussed and actioned upon
More often than not, the solution to your questions is hidden inside layers of data. So leverage sales data to unlock new sales opportunities.
Questions?
Mention in the comments or connect with me on LinkedIn for a conversation. Thank you!
