The Complete Guide to Sales Analytics

Every sales team wants the secret sauce to help grow their revenue. However, the answer is often right in front of you — in the data. Though it’s often hard to turn data into actions, analytics can provide the answer you need to get higher earnings next quarter.

Wondering where to start? You’re in the right place. We’ll walk through the basics of sales analytics, the benefits, and metrics to track to keep your business growing.

What you’ll learn:

• What is sales analytics?
• Benefits of using sales analytics
• Types of sales analytics
• 9 sales metrics to monitor
• Tips for integrating analytics into sales processes
• Features to look for in a sales analytics tool

Sales analytics is gathering sales data points using technology to see your organization’s progress towards goals. This improves forecasting and helps identify new opportunities. Leaders can see what the team is doing right and what needs to adjust. By turning previously siloed sales data into actionable insights, you can make smarter business decisions.

Using analytics brings a wide range of benefits that helps increase revenue for your organization.

Data tells a story about what is currently happening in your business. When you view data points separately, you may come to an incorrect conclusion because the significance of the event is unclear or the event is simply a one-off. By viewing data holistically, you can find trends that set the stage for forecasting behavioral insights.

Viewing analytics using charts and graphs often makes it easier to spot and then act on sales trends. For example, a product having lower sales for a single month may be due to an industry event or multiple sales representatives taking time off. However, a product with sales dropping over the past six months signifies an issue that needs to be addressed.

Different sales strategies work best depending on the specific products and customers. Automatically capturing data through the lead generation process, including calls and emails, provides sales teams with more data and insights than they had in the past. For example, if a specific line of business takes longer to close than other lines, adjusting your sales strategy to better fit the products may increase sales. Additionally, analytics of individual sales representatives shows who hits their targets and goals. You can then consider which representatives would benefit from additional training or new sales strategies to improve their sales process.

Sales leaders make many decisions every day. While using data is not a new concept, analytics makes it possible to use data for smaller (and daily) decisions. In the past, leaders looked at the raw data and then had to interpret it correctly to make a decision. Much of that data was quickly outdated. Interactive dashboards and actionable insights now make it possible for sales leaders to make quicker and more accurate decisions.

For example, analytics gives managers a real-time (and complete) view of team performance. With actionable insights, analytics spotlights areas for improvement. Managers can then quickly see the best interventions to overcome challenges, such as providing additional training on closing techniques to a sales representative who generates many high-quality leads, but struggles to make the actual sale.

While there are many different analytics used for sales, they all fall into three broad categories. By understanding these categories, you’ll find more ways to use analytics effectively in your business.

Performance sales analytics look at what happened through historical sales data and client churn (the percentage of customers that stopped using your product or service) to predict what is likely going to happen. Performance metrics typically involve comparing data points against each other, such as the target revenue and the current revenue, to generate the percentage progress of the goal.

Many metrics provide clues as to whether you are going to meet sales goals and help identify areas of improvement. For example, a sales representative’s sales goal is $1 million, which means they need a pipeline of $3 million because of average close rates. You can use the pipeline metric to identify sales representatives who may be in danger of not meeting their sales goals and offer intervention instead of waiting until the sales period has ended.

Setting goals is essential to successful selling, and getting them right is crucial. Sales representatives become frustrated if goals are set too high, while goals that are too low result in less revenue. In the past, forecasting often depended on gut feelings and looking at historical data. Now, analytics make it possible to combine historical data with data on current conditions to create a more accurate forecast.

Reps need opportunity data to map out the best path for closing deals. Managers need dashboards that show which reps are on track to beat their targets, and which reps need coaching to stay on track. Finally, sales leaders need to visualize data from around the company to spot problem areas and adjust the strategy to stay on course.

With sales analytics, you can use negative forecasting to understand risk by seeing the impact to a company if a current customer cuts their budget. While it’s easy to think of sales forecasting as simply for the sales department, you can use the techniques to see the impact to the entire company. For example, other departments may be able to increase their budgets based on increased sales and growth due to high sales.

Analytics can help you predict future performance, especially in terms of whether your team or a specific sales representative is going to meet a goal. Performing predictive analytics involves gathering historical data about your sales reps and then using a statistical tool to identify patterns and predict future outcomes. By using a sales analytics tool, such as Salesforce, your team can view actionable insights through reports and dashboards.

Once you have this information, your team can move to data-driven selling by predicting, planning, and delivering your targets and outcomes. It is now possible to predict aspects of the sales cycle that were previously not possible. Sales representatives are also able to close deals more quickly by knowing where to start the conversation with customers, which reduces churn and a lengthy process.

While there are many different analytics used for sales, they all fall into three broad categories. By understanding these categories, you’ll find more ways to use analytics effectively in your business.

By calculating its annualized contractual value (ACV), an organization knows the amount of all new and add-on opportunities. However, this number is only slightly useful in a vacuum. By comparing the current ACV to those of prior years, you can determine if your sales have grown or shrunk, which points to the future path. You can also show growth between sales periods to see change on a more micro level.

Each quarter and year, sales leaders set total sales goals for the company, which are referred to as sales targets. With this number in hand, leaders can make a number of other key decisions, such as quotas, territories, and strategies. After reviewing the prior period’s data, leaders should consider any outside forces that could affect the ability to hit the target, and then set targets that allow for growth. Breaking sales targets down into smaller increments, such as quarters, makes them easier to track.

Leaders can see how representatives stack up against each other by adding up all of the sales, including new and recurring, that are closed by each representative. Sales reps who are leading the pack can help mentor other representatives, while those falling behind can be provided with additional training. Sales per representative is simple addition, while quota compares the sales per representative to the sales target per representative.

Similar to sales per representative, this metric involves adding up sales based on customer region. For example, sales by region would include the total of all sales from customers in North America or Asia-Pacific. This metric uncovers patterns that can be used to find opportunities. For example, if sales are slowing in a particular region, leaders should investigate the cause and work to remedy the issues. On the other hand, sales trending higher each quarter may indicate a strong customer demand in that area.

You can also see sales trends, especially for products, by calculating the sell-through rate, which is the percentage of inventory that was sold during a specific period. This metric is especially important for companies selling physical products (to help with supply chain and inventory).

By adding up all the sales for each product, sales leaders can see where the majority of revenue is coming from on a product basis. This metric shows if a product may need additional representatives or changes to the product to improve demand.

Your future revenue depends on a strong pipeline, which requires significant pipeline management. However, having a high volume in the pipeline doesn’t automatically mean success. With this metric, you determine both the volume and the quality of the pipeline to predict the likelihood of converting customers that are in the pipeline. Keep in mind that different lines of business may skew your deal velocity. For example, a renewal deal is open much longer than an incremental sale would be. It’s important to keep these in mind when measuring velocity.

This metric includes all quoted sales that are currently in process from start to finish. By monitoring quote-to-close, leaders have a good view of all activity currently in progress.

Each sale involves significant effort for the sales representative. However, higher deals mean achieving revenue at a lower resource cost. By tracking this metric, leaders can provide training and strategies to help increase the purchase value. Additionally, sales representatives with higher average purchase values can provide insight to other team members to help them increase their own average purchase values.

One of the challenges of using analytics is that it will change your current sales process. By adding in analytics, you shift the process, almost always for the better, but it’s still a change for leaders and representatives alike.

Sales representatives are often initially resistant to analytics because they view them as a way of being judged and monitored. Before moving to additional analytics, meet with the sales team and point out the metrics that you’re currently using in your process, such as quotas and goals. Explain that adding additional analytics will give them more information to help them meet their sales goals. Give examples from current situations in their workflow to help them find immediate value. Additionally, having them understand how you use the data to make other company decisions gives them a sense of being part of the solution.

Start by creating detailed documentation of the current sales process, including the tools and strategies that are being used. Work with your sales representative to build a new workflow that integrates the new analytics. By including sales representatives in building the workflow, you can create a process that works for the people who are on the ground selling your products.

By rolling out personalized sales dashboards, each sales representative can have exactly the information they need. Additionally, they can set up their dashboard for their own preferences and workflow. For example, a dashboard can be set for a weekly or monthly cadence. While it’s tempting to have different dashboards for managers and representatives, using the same dashboards for everyone allows full transparency and collaboration.

The right analytics tool can make it easier to include metrics in your workflow. Additionally, the technology allows you to use sales analytics at a much higher level.

When shopping for an analytics tool, look for the following features:

Visual representations make it easier for sales leaders and representatives to quickly see where they stand. A tool that offers multiple options also allows users to adjust for their preferences and learning styles.

Your CRM is already collecting many of the metrics needed for analytics. By using an integrated tool, you’ll increase adoption and accuracy. Seeing analytics right at a customer record is valuable for users as they go about their daily tasks.

Tools that provide your sales team with specific insights (as well as data) help build stronger pipelines, improve forecasting, and generate more revenue.

Your sales team is busy. They don’t have the time to look in a lot of different places for data and insights. With a single place to look, they can see a unified view of metrics, top opportunities, and weekly deal updates.

Looking for a new opportunity? Trying to decide which customer to focus on? A sales analytics tool that provides AI-based insights gives you the answers you need to build stronger pipelines and improve forecasting accuracy. You can also create test scenarios and see how changes to the pipeline affect your close rate and revenue.

Without a doubt, analytics are the key to the future of sales. By transitioning your processes and tools to using analytics, your organization can see significant increase in revenue through spotting trends, making and picking the right sales strategies. Throughout the processes, monitoring the right sales metrics gives you the data you need to make smarter business decisions. Organizations that use sales analytics tools find the shift to be easier and more successful results.

Yes, it’s a big change. But once you make the move, your organization will see better results and smoother processes. Your team has the skills and knowledge to take your sales department to the next level with sales analytics.