The time when a salesperson was dropped into a sales territory with little or no understanding of the opportunity on offer has long since passed. No company would dream of investing time and money, hoping that a salesperson will strike it lucky. These days companies invest time, energy, and budget in identifying where opportunities might be and tracking the growth of the sales pipeline that’ll deliver the sales performance the business needs.
However, companies continue to innovate to find that all-important competitive edge that helps them deliver more growth, more customers, and more value. One area they are exploring is sales performance analysis, where companies can leverage the vast data resources available to them to help them better understand their customers, their markets, and the effectiveness of their sales and marketing processes.
Sales performance analysis allows sales managers and their peers in the marketing function to use business metrics to understand which products and services are the most popular in specific sales territories and why. It helps them identify their most lucrative sales channels, their most effective business partners, and their most effective sales teams. In short, sales performance analysis helps you maximize the value of your sales and market data, to help you develop the most effective sales strategy.
What Is Sales Analysis and Why Does It Matter?
Sales performance analysis is the practice of deep diving your sales and business data to provide fresh insights and highlight the key trends and dynamics you need to manage as a business. It focuses on the ability to market to and engage with the ideal prospects, develop them into leads, and fully develop opportunities and then close them, often in the face of fierce competition. This’ll likely cover issues such as which lead sources are most effective, how long it takes for leads to convert into opportunities, and how long it takes for opportunities to close.
The Value of Sales Analysis
Sales analysis gives you the ability to deep-dive multiple data sources simultaneously, to give you new insights about your business, customers, and market. It can help you make better decisions about developing and launching new products and services, developing and executing a marketing and sales strategy, as well as how best to respond to competitive threats.
Let's explore some of these points in more detail.
1. It Helps You Base Your Decisions on Data
Senior managers and executives have more access to data than ever, both their own and from external sources. In a dynamic world, repeating the same plan year after year is a risky strategy, as you may miss emerging trends and threats that could derail your business plans. Basing decisions on hard data and looking at the same business problem from multiple perspectives will likely help you navigate the choppy waters every business faces. Data can offer fresh insights and that moment of inspiration that can take your business to the next level.
2. Use Data to Find Your Best Customers and Your Ideal Prospects
Sales performance analysis takes you beyond the fundamentals of pipeline analysis and forecasting and takes you deeper into your sales processes and how you engage with your broader commercial environment.
It can help you understand who your most profitable customers are now and those who’ll likely be the most profitable in the future. It can also help you find those sectors and segments that’ll deliver the next burst of revenue growth your management and stakeholders will be looking for.
3. Use Data to Learn More About Market Trends
Managing a company successfully is as much about managing the business in the future as it is managing it today. Success tomorrow is much more likely if you can invest time and effort today in anticipating and planning for the future trends that’ll matter to your business.
Sales performance analysis allows you to go deeper into your business and your market today to better understand the trends that’ll shape your company tomorrow. For example, find out if your sales cycles are extending and why. Understand who is typically involved in the decision-making process at your prospects and customers. This’ll help you develop go-to-market strategies that engage them in the right way at the right time. This analysis can give you fresh insights into what’s driving customer business decisions. Is increasing revenue seen as more important than reducing costs? Is risk management becoming a more compelling driver for decision-making? Are your customer margins shrinking or growing, and what opportunities does this offer you?
Sales performance analysis can help you understand these issues and many more that can propel you ahead of your competition.
4. Use Data to Provide Better Customer Service
Sales performance analysis can also help you deliver enhanced customer service by helping you better understand what is most important to your customers. If your sales data and customer engagements suggest that reducing costs matters, you can create a product and market engagement strategy that reflects that need. Equally, if your customers are more concerned with you developing your value-added services, and are willing to pay for them, then you can build up your business on that basis.
5. Use Data to Help Extend Your Market
Sales performance analysis can also help you extend your market by providing data and insights that help you identify and understand potential new sectors and segments. This might be straightforward where a new market has similar issues and drivers to an existing market you already serve. It becomes more problematic if a potential market has issues you can address, but where the target prospects make decisions differently and implement products and services in a way you need to adapt to.
Sales performance analysis makes understanding the key similarities and differences in markets more straightforward. It can give you the insight and confidence to extend your products into a new market by helping you understand how best to re-package and re-position your products and services to a new audience.
6. Employee Motivation
Sales performance analysis can help provide insight into what motivates a sales team most effectively. Sales data and feedback from sales managers and sales teams can help devise strategies that enhance sales efforts to generate better results for a business. Find out what incentives work most effectively for account managers and how they might differ for those who are responsible for creating new business opportunities. It can help you understand how channel management teams might need different motivational models than those who sell directly to end-users. It can also show you how non-financial rewards, such as career development opportunities, can motivate staff beyond purely financial rewards like commission models or bonuses.
Some Methods and Techniques that Provide Sales Performance Analysis
Clearly, sales performance analysis has significant strategic and tactical value for a business. What steps can you put in place to fully capture its value?
1. Sales Performance Metrics
The first and most obvious place to start understanding your business and its sales processes in more depth is by looking at the sales team you have in place. Insight comes from digging deeper than simply seeing who’s on quota and who isn't and starting to see which sales teams are most effective and which – with the proper development and support – could be even more effective.
For example, wouldn't it be valuable to find out how long deals take to move from opportunity to close? Are some teams better at this than others? Alternatively, does cross-selling new products to existing customers help reduce the sales cycle? Equally, when are discounts or other incentives best introduced into the sales process, and which negotiation ploys work best when it comes to closing a deal?
Much of this information is held in your CRM platform, in your finance systems, your marketing systems, and your e-commerce platform, as well as with your salespeople. If necessary, you can combine it with external data sources to understand those areas where your sales team adds the most value and what areas need more focus or support to deliver the results you need.
2. Sales Trend Analysis
Sales trend analysis is also an important part of understanding how your sales process really works. Sales performance analysis can help you answer questions such as whether your average sales cycles are consistent, shortening, or lengthening? Is the average deal size increasing or decreasing? What’s happening to market share? What customer sectors are growing or declining? Which products or services are increasingly in demand or face slowing demand?
These are questions sales and marketing teams are always looking for but often lack the budget or resources to explore fully.
3. Sales Pipeline Analysis
Sales pipeline analysis is the classic place to start when assessing the performance effectiveness of a company's sales and marketing process. The first question anyone will ask is whether a sales team has a pipeline three times the size of their sales target or whether it needs to grow. Sales performance analytics capabilities allow sales managers to drill significantly more deeply and more broadly into their pipeline. It helps them understand where there are bottlenecks that could delay sales and potentially offer insights that can address this issue, whether it be pricing or packaging issues, for example. Equally, the same analysis could highlight areas where some swiftly executed marketing campaigns could build the scale of pipeline that a business needs to be successful.
4. Product Sales Analysis
Sales performance analysis can also help to provide insights into the performance of specific products, which will interest the product management team and the marketing function. Where a sales team is selling several products simultaneously, understanding the detail of which products are selling well in specific sectors and segments helps clarify what initiatives need to be put in place to ensure this success is repeated across the board. This may mean additional sales training or marketing initiatives that drive more sales pipeline from other sectors and segments. It’ll also bring clarity to how the sales process might be streamlined to accelerate sales and revenue, whether it be through enhancements to pricing, packaging, and positioning, for example.
5. Predictive Sales Analytics
Sales performance analytics also help provide an understanding of how the sale of existing products is going to develop in the next 12-18 months by providing predictive trends based on real-world data.
It can help you understand what sectors and segments will likely grow, plateau, or decline, helping you make fully informed management decisions about your next steps. This insight can extend to the launch of new products, where you can use real-world metrics to understand the potential demand for a product or service, again giving you options and insight that can help ensure a successful launch.
6. Sales Effectiveness Analytics
Sales performance analytics also provides an end-to-end perspective on your ability to engage with your target markets over any time period. It allows you to follow customers and prospects from first contact, through to lead, to opportunity, and then to bring a fully signed-up customer. You can then follow the commercial relationship over the lifetime of that customer to create a customer lifetime value model. This end-to-end perspective is invaluable as it can help you understand how much resource and effort is needed to support sales and marketing activity throughout the process. It provides a benchmark for the business and represents an opportunity to streamline and optimize the overall sales and marketing process, which’ll help maximize margins for the business.
7. Marketing Research
The comprehensive array of data that a sales performance analysis platform can give you offers a wealth of insight and options when conducting market research projects and market sizing initiatives. It provides a clear analytical picture that’ll help with the strategic management of the business so that the Board can understand what business initiatives it needs to focus on most to meet the objectives of the wider business and its stakeholders.
How to Deliver Sales Analysis in 3 Steps
Clearly, there is significant value in performing a sales analysis, either as a one-off exercise as part of planning for the next fiscal year, or on a regular basis, as part of an ongoing process of regular reviews and analysis that help sales and marketing management stay on track during the business year.
Let's explore what steps you need to go through to run a sales performance analysis project:
Step 1: What's your Objective?
Sales performance analysis is hugely powerful, but there's enormous scope for it to provide answers to the wrong questions if you aren't careful. So, before you start your project, think about the objectives you’re looking to achieve. Is it to provide insight into improving the sales and marketing process? Is it about sizing a market or segment correctly? Are you looking to find options to extend your offering into new sectors? Or are you trying to find the next market to conquer?
These questions require different information sets and different analytical techniques to find answers to give you what you need. Just jumping in and hoping for the best is a sure-fire way of generating plenty of graphs but not much valuable insight.
Step 2: Identify the Data You Need to Track
With a clear view of what you’re trying to achieve, you can then think about the data sets you need to use to give you your answer. There’s no shortage of data available to a sales manager looking for inspiration, and it can be found in numerous locations. Internal data that might be useful can be found in sales and marketing CRM platforms, finance systems, e-commerce systems, and the corporate website. This information can be combined with data from external sources. This might be information about the population demographics, weather patterns, feedback from consumer panels, industry growth metrics, finance metrics, and much more.
With a clear understanding of what you want to achieve and with the best data sets to hand, you can think about how best to shape and manage the data to provide the insights you’re looking for.
Step 3: Analyze Your Data with a Sales Analysis Tool
A sales analysis tool essentially has two jobs in a data analytics project. The first is to capture the data from a range of data sources and then help the researcher to understand and analyze the data to generate the desired results. The pressure of work today means that automation is key so that data analysis doesn’t become the day job for an already busy sales manager. This automation covers data extraction and integration and data mining, analytics, and reporting.
The sales analytics platform needs to have the capacity to assimilate large volumes of data and help make sense of it to allow for the trends and patterns hidden in that data to reveal themselves to the curious and intrepid. Ideally, powerful AI capabilities will help with this analysis to highlight concepts and themes that can deliver both insight and inspiration during the research project and beyond.
Step 4 - Sharing Your Findings with Key Stakeholders
The last step in the process is sharing your insights with the stakeholders who are shaping the future of the business and managing the day-to-day.
Few businesses nowadays run without the benefit and value of an enterprise dashboard. Being able to post links and valuable reports to these dashboards that provide automatically updated insights can be a valuable way to keep all compasses pointing north when running the business's day-to-day issues.
Another essential skill is sharing complex and rich data sets and insights with an audience that doesn’t have the time to deep-dive the information themselves. Creating on-the-fly reports and graphics that are easy to understand and convey complex but valuable insights is a key capability in any data analytics platform.
Matching a Sales Analytics Solution to Your Needs
Leveraging business and market data to understand where the next key trend is coming from isn’t new. Companies with large IT budgets and access to data scientists have been doing this for many years.
What has changed more recently is the much wider availability of data, aligned with easy access to vast cloud computing capabilities and powerful AI capabilities. Together, this means that the price point of delivering these capabilities has dropped significantly in recent years.
Companies now have access to enterprise-strength data analytics capabilities without the need to build complex data architectures, staffed by expensive specialist resources who produce insights that may or may not be valuable.
So, what does the ideal solution look like?
The optimal solution needs to be SaaS-based to eliminate the need to build complex IT environments.
This has several benefits. Firstly, it allows the project to proceed at the pace needed by the business, rather than waiting for project resources to be freed up by a hard-pressed IT department. Secondly, SaaS-based platforms allow people to work collaboratively regardless of location. It also facilitates the involvement of third-party business partners in the process without the need to negotiate complex security procedures to get into a company's own IT environment.
Data integration capabilities are also important. The value of these capabilities is consolidating large volumes of data to capture the broad array of dynamics that a company needs to address. Sales managers need to be able to integrate into data sources quickly, easily, and securely, with no need for coding or scripting, regardless of where data is located. This consolidated data set needs to be held securely so that only those who need access can do so.
Automation lies at the core of this entire process and extends to data analytics too. The smart move for any hard-pressed executive is letting AI do the heavy lifting of finding trends and dynamics that can provide valuable insights that can take the business to the next level. Equally, where someone wants to do their own research, the process needs to be quick, easy, and intuitive. This allows them to use their time productively without spending endless hours trying to work out how to use the tool.
Another consideration for the ideal solution might be to recognize that a sales performance analysis platform can’t and shouldn’t operate in a vacuum. The issue of sales performance management is closely tied in issues around incentive compensation management, as well as territory and quota planning. The data held in these areas can build the optimal sales capability that can help grow the business consistently.
Find out more about Varicent's sales analytics solutions and how they can help to transform your business here.
Or, why not book a demo today?