5 Ways data-based sales analysis benefit your business
The one crucially important factor for the success of any organization is Sales. After all, increasing the number of sales is the goal that every company strives for, in order to achieve higher revenue, return on investment, growth, and expansion.
But in order to take measured control of how much we sell each month, quarter or year, we have to take a step back and look at our past performance in a critical and evaluative way.
Not surprisingly, high-quality sales analysis offers us the opportunity to measure our performance in this key area, by showing us the success of our operations through four core factors: Stock inventory, the effectiveness of salesforce, manufacturing capacity, and goal progress.
And even though this performance-evaluation tool is very complex and useful, we can take it to a whole another level by taking advantage of our organizational data and integrating these data into the essence of our sales analysis.
This way, we get the opportunity to see evidence-based, data-driven results, and improve the trustworthiness of our sales analytics. However, that is only the big picture. The data-based analysis allows us to look closely into every aspect of its core factors and helps us to plan ahead.
Now, let’s see the benefits that data offers our business.
No matter if operating in the retail, manufacturing, hospitality, travel, logistics, or warehousing industry, every business needs tangible assets in order to trade with products and services.
Data-based sales analysis gives up-to-date information about the availability of stock in the organizational inventory.
This is key for coordinating logistics operations when making a sale. It helps us to keep in mind the real-time demand and stock and to make the link between those two variables, no matter the kind of inventory: raw materials, work in progress, finished goods, transit, buffer, anticipation, decoupling, safe or cycle. This way, data makes this otherwise complex process, more ordered, simple, and comprehensible by the employees and management.
What is more, data allows us to achieve better control over the company stock and to interfere if any critical problem occurs, such as out-of-stock goods, which are on demand. As a result, we can achieve greater sales stability and minimize denied orders due to inventory issues.
Effectiveness of salesforce
Under this title, we can find sales information in terms of numbers, as usual, the main topic of interest is the total sales accumulated throughout the period.
Nonetheless, using data-based sales analysis can show us far more detailed and precise accounting of the actual sales. It has the potential to present us with a comparison of the actual and the estimated (also called projected) sales. We can also see the progress of the different salespeople, recognize if they have met the sales target, assess the reasons for their efficiency, and link them to certain events and changes in their work.
Some factors, which have influence over the sales force efficiency are holidays, personal issues, change of job, position, motivation or satisfaction, change in the products which are about to be sold, and others. By integrating the data, which has been generated in the business entity, we can link all those factors to the success of our salesforce and assess the risks that we bear in terms of human capital.
Another key benefit is that data-based analysis enables us to discover the most efficient locations, products, and prices, identify the most engaged customer groups and the level of their loyalty, satisfaction, and value to the company.
This factor is not only about manufacturing, but also about order handling capacity. And it is key because in order to achieve a sustainable level of operations, we need to enhance our productivity and efficiency and at the same time lower our costs as much as possible.
With data integration, we can achieve those two micro goals in a smart way.
The data-driven sales analysis gives us the advantage to measure detailed costs per order, including for manufacturing, overhead, human capital expenses, utilities, and others.
Such a precise overview lets us know what the self-worth of each sold product is. And as a result, the company achieves better control over the incurred expenses and can assess the risk of increasing costs in a more efficient and evidence-driven way.
Goal progress assessment
Even though the goals of each company are different, the data-based analysis provide the organizations with insights about key sales goals, such as the percentage of loyal customers, channel stability and profitability, percentage of repeated purchases, ROI, costs of goods sold reductions, customer acquisition costs, monthly recurring revenue, order cycle time, client satisfaction, contract rate, etc.
Specifically, the repeated purchases and the loyal customer base are key to look into, because of their importance for our long-term success. In that sense, according to the book Marketing Metrics, “Businesses have a 60% to 70% chance of selling to an existing customer, only 5% to 20% to a new prospect.”
Such a detailed overview shows what mean the company is thriving, and when it is a step behind its goals. All that supported by numbers, reasons, causes, factors, and dependencies.
This fifth benefit, that data-driven sales analysis provides organizations with, is fully based on the previous four points mentioned in this article. There are endless ways for data to enhance the business planning process, yet in terms of sales, there are some essential areas to look into:
- Forecast demand, based on recent, short, or long-term experience
- Change of sales strategy
- Adopt new sales channels
- Adjust prices
- Optimize capacity and human capital
- Identify new market opportunities
Only data can give us detailed sales analysis that we can draw insights from. Otherwise, sales are just numbers that show us how much we have sold, without any strategic overview, explanations, reasons, causes, and dependencies.