79% of sales teams use or intend to use sales analytics technology to improve efficiency.

There’s no getting past that every company should at least use some basic sales data analysis. With the vast majority of sales teams already using it, sales data analysis has become necessary just to keep up.

But where to start? Read on for a summary of the key steps you can take to start your own sales data analysis.

Benefits of Sales Data Analysis

Everything you do in business creates data. Without any sales analysis, all of that data just passes by you, unused. Given that we now live in the era of big data, and the big data market is growing so fast that it’s expected to double in just the next 3 years, this data could be being better used.

By recording your actions to create data, you can then organize that data to create powerful tools for analysis. Sales graphs and other analytical tools can be the best way to get a big picture understanding of what’s been going on in your company and what you can do about it.

As soon as you know what influences your sales trends, you become the driver, able to take effective, intentional action to positively affect your sales. No more will you be subject to mysteriously fluctuating sales numbers, with no apparent rhyme or reason.

Collecting Data

Most of the data you’re going to need is probably already being collected. If each of your sales reps records their sales along with when they happened, how big they were, and in what area, then you have plenty to start with.

On the other hand, you may need to shore up some blank spaces in your landscape. Are your sales reps recording the timeline of their sales? Ideally, they’ll record when they first found a lead, how quickly they contacted the lead, how quickly they offered a quote to the lead, and how long it took them to close on the sale after they offered a quote.

Additionally, you’ll need data from your storage or warehouse indicating how quickly you run out of any given product.

Entering Data

The next thing you’ll need to do is transfer all the data you’re collecting to a powerful processing tool. Something as simple as Microsoft Excel can work fine, although you can also find specialized software designed for trend analysis.

If any of your data has been collected on paper, then you’ll need someone to do data entry to get it all into your chosen processing software product. You might think about updating your data collection procedures to be purely electronic.

You’re going to want to get all the data into one place, so you may have to gather it from disparate electronic or paper records. Once it’s all in the system, you’re ready to start organizing it.

Organizing Data

The simple data points on when sales were made, where, and what was sold is enough to perform a lot of analysis.

First, you need to decide on a given metric and isolate it. For example, you might start with something simple like calculating the sales rate of each of your reps over time.

Knowing how to do trend analysis is as simple as knowing how to make a line graph on Excel and entering the data into the appropriate cells. There is plenty of information on how to do this online.

In short, to make a line graph that displays the sales rate of each of your reps over time, you’ll make a column for each representative and enter the total value of their sales each month into a series of cells. Each cell in the column will hold one month’s sales.

You then tell Excel to display those numbers as a line graph, and voila! You have a line graph showing your sales representative’s sales over time. Maybe you’ll see that their numbers tend to be steady, or, hopefully, they go up over time as the sales representative continues to build up experience and sales skills.

No matter what you find, you’ll be able to see at a glance any interesting trends in your sales rep’s performance. Simply repeat the process for your other sales reps and you’ll be able to identify which of your reps needs extra training or deserves special praise.

This trends analysis example is one of the simpler ones, but as long as you have your data and know a few basic tricks on Excel, you can make many more.

Other Sales Metrics

Keeping track of how each of your products is performing is a powerful way to tell which products are no longer worth spending time on, or which ones could be huge moneymakers if you gave them extra attention.

In this case, you’ll need to look at what was sold in each of your sales reps reports and break the total sales number down into how much of each product was sold, and for how much.

You can then combine the entire team’s sales on each product together to find out which of your products has sold the most, which sold the least, and which were in between. Enter the total sales of each product per month into a line graph on Excel, and you’ll be able to see which products’ sales are growing or shrinking.

While this will tell you each product’s performance, it also paves the way for you to use another sales metric: cannibalization rate.

Your similar products compete with each other, and it’s possible that a new product will simply take the sales away from an old one. Since your total sales don’t go up when that happens, that new product may only be worth a minimal investment.

Every situation is different, but by tracking each product’s performance and then comparing them all, you may notice that one product’s performance goes up at the same time that another’s goes down.

Now that you can see what’s going on in your company, you’ll be able to apply your judgment to decide what to do about it.

Know Your Company

We hope you learned something helpful in this brief explanation of sales data analysis.

As you optimize your sales performance, you’ll need more leads to power your sales. Check out our other pages to find out how you can use real-time and aged leads in your sales team. You can also learn more about the effective use of business and consumer data.

Contact us today to find out how we could help your business.