The concept of sales is almost as old as humanity itself. From using bartered goods to offering modes of digital payment, we’ve innovated the basic act of selling and goods and services. But one thing is for certain: the business sector is always changing. What business owners could see as the hot new trend one week might be completely different the next one. Customers’ purchasing behaviors are influenced by a number of factors, and their decisions can vary from moment to moment. Given this fast-paced environment, how can a small business owner like you keep up? What will grant you greater knowledge”and therefore greater control”of your company’s sales?
A very practical answer to such a dilemma is sales analytics. There’s a lot that current technologies can do when it comes to gathering, analyzing, and forecasting from important sales data. The best part is that such technology is no longer limited to big corporations; even smaller business can use them, too. Accurate and wide-ranging sales analytics may be just what a small-to-medium enterprise (SME) needs in order to make a business breakthrough.
To help you make the best of your company’s sales analytics, here are some tips on tracking key sales metrics and making your own report. This will be your ticket to selling your goods and services with the acumen of a bigger business.
How to Invest in Sales Analytics and Make Your Own Sales Analytics Report
Getting a sales analytics report done may seem like a daunting prospect to SME owners. And that’s understandable given the time, money, and effort one sales report used to require. But with today’s up-to-the-minute data analytics technology, you won’t have to crunch numbers the way you used to. A well-equipped enterprise resource planning (ERP) system, such SAP SE’s SAP Business One, can do most of the hard work for you.
In order to acquire ERP software with sales analytics abilities, you’ll need to look for a provider. They’ll be the ones to assist you in implementing the system and acquiring the sales data that you need. This will be in addition to everything else in the ERP’s suite, such as accounting, banking, inventory, HR, and customer relations management (CRM) facilities.
Among the many things it can do, the ERP can help you gather, organize, and present your sales data for a consolidated report. But what is it exactly that should be on the report? That’s what you should know as a top decision maker for your business.
The Top 10 Sales Metrics You Need to be Tracking
For the report to be meaningful to you and your staff, it should contain the sales metrics that best reflect your situation. Your choice of metrics will the basis of the following:
This combo of sales metrics should help you derive valuable business insight on your sales. Here’s a rundown of the metrics that matter, and therefore should be featured on your sales analytics report.
Sales to Date
Get a good picture of how your sales are doing by comparing them to the previous year. With the results from this metric, you’ll be able to get an idea of how past sales trends measure up with current ones. It will be extremely useful for devising good sales strategies from year to year.
Another important thing to measure is your sales growth. You’ll want to see how your company is doing based on how it’s grown its revenues. Tracking sales growth and getting the exact numbers will keep you and your staff from second-guessing how effective you’ve been at sales.
Your company may have set its own sales targets per month, per quarter, or per year. The targets may pertain to a certain revenue threshold, number of units sold, or number of accounts maintained. See if you’ve met any of these business objectives by tracking your various sales targets in the analytics report.
Analyzing data on your previous sales performances can help you determine where your next sales opportunities lie. They may be in moving more of a certain product or renewing efforts to sell aggressively during a particular period, based on past successes. Granted, opportunities can also change from time to time. But it’s better to have a good idea of where you can take chances versus having no idea at all.
Sales Per Region
Some goods or services may be popular in one region versus in another. In which regions are you seeing the most success, and what are the factors behind it? This metric will give you the best insight on what sales strategies are working per region. It will also give you the opportunity to rethink and re-tailor strategies for others.
Some products are more difficult to sell than others, or take a longer time to get off shelves. This metric is vital for comparing sales to total inventory, as well as making responsive, practical decisions in your business’s supply chain.
Every business should have a clear idea of what its bestsellers are at any given moment. Your product performance metric should track individual products, product types, or lines. This should help you determine the right amounts to stock, both for the bestsellers and the slower-moving products.
Product Cannibalism Rate
Though it’s good when one product totally flies off the shelves, it may be bad for the other products you have in your stock. Use this metric to compare performances across product lines, product variations, or product editions. The data can be your basis for changing up your sales strategy, for example discounting older product variants to move them out faster.
Lead Conversion Rate
Beyond individual products, you may want to measure how many leads you’ve won from online campaigns, industry-related trade shows, referral programs, and the like. Business insight on the leads you were able to convert will help you retain effective sales strategies”or decide when better ones are in order.
Sales Per Representative
Lastly, you should measure who does excellent sales work for you. Identify and reward the sales reps who have brought the most value to your business; mentor the reps who have lower success rates. The human element of sales matters a lot, so make sure this metric is used to hone the skills of your staff.
Conclusion: Keeping Your Business Profitable in a Data-Driven World
Data-driven insight has changed the ways businesses operate”and mostly for the better. That applies to your small business, too. Having an objective means to measure your sales performance will improve it in the long run.
Use sales data analytics to change up the way you reach out, sell to, and sustain your customers. Consider a data-driven approach to craft sales strategies that can be effective for any company, regardless of its size.