What Is Sales Analytics and How Does It Benefit My Business?

If your business relies on selling products or services, you may benefit from learning more about sales analytics. Discover the different types of sales analytics, how they might help your business, how to make a sales analytics plan, and more.

What is sales analytics? 

You can use sales analytics software to gain information about customers, their buying habits, product or service performance, sales trends, and more when selling products or services. Tracking this information might help you improve your products or services, enhance marketing and other sales methods, boost company efficiency, and predict future sales and revenue. 

Who uses sales analytics?

Sales-oriented businesses rely on sales analytics to gain valuable information. Company employees that use sales analytics include the marketing team, the sales team, the people who manage them, and company stakeholders.

Important sales metrics to track

Before exploring different types of sales analytics, you may want to identify which sales metrics you want to track. Some standard sales metrics companies track include:

• Sales targets: Goals set for sales

• Monthly sales growth: How much sales rise or fall each month

• Lead conversion rate: Rate at which leads convert to paying customers 

• Sales by region: Measure of sales within a particular geographical area

• Sales per rep: Measure of sales made by each representative

• Sales per product/service: Measure of sales of each product or service

• Sales by contact method: Measure of sales made using a particular prospecting method (cold call, warm call, email, etc.)

• Sell-through rate: Percentage of inventory sold versus received in a given period

Different types of sales analytics

Knowing how sales analytics differ can help determine which might benefit your company. Explore several different types.

Diagnostic analytics

Diagnostic analysis allows you to understand the reasons behind a particular event. Examples of events you could examine include why a product didn't sell well during a specific month or the relationship between lower sales and a new competitor opening nearby.

To get to the cause of an event, diagnostic analysis involves various techniques, including:

• Hypothesis testing: The process of testing an assumption

• Correlation: Examining the directional relationship between two or more variables

• Regression analysis: The use of statistical methods to determine a relationship between two or more variables

Market data analytics

Market research offers an abundance of helpful information. It can tell you how current or potential customers view your company and how you compare to your competition. It can also tell you where to find potential customers, whether to launch a particular product or service and how to improve your product promotion or packaging.

Types of marketing data worth analyzing include:

• Customer data: Demographics, geographic location, interests

• Customer satisfaction data: Results of surveys, satisfaction ratings, and other feedback

• Market campaign data: Effectiveness of a particular campaign

• Sales and purchasing data: Amount of sales, who buys your products or services, what days or times of day do you make the most sales

Sales performance analytics

You can learn a good deal from accessing and analyzing sales performance data. You might discover:

• What products or services are more popular than others

• Where your sales team or sales processes may need improvement

• Where you may need to make pricing changes

• How to improve customer service

Sales trend analytics 

Sales trend analysis allows you to detect patterns in various types of sales data. Some trends you can examine include:

• Conversions (when leads convert to paying customers)

• Sales of specific products or services

• Total sales

Predictive sales analytics

Analysis of past and current sales data helps you predict future sales. The ability to make more accurate sale predictions can help you:

• Plan your budget

• Narrow your target market

• Improve your customer messaging

• Reduce risk when launching new products or services

• Meet product demand

• Boost investor confidence

Key benefits of sales analytics

Collecting and analyzing sales data can benefit your company in various ways. Read on to explore a few of the key advantages.

Pinpoints strengths and weaknesses

By clearly identifying areas that need improvement and areas that don't, sales analytics can help companies run more efficiently. For instance, you can use sales analytics to quickly examine the amount of sales per representative to determine a need for extra training or a well-deserved promotion. Sales analytics also helps identify problems with certain products or services and may help improve the sales process.

Improves decision making

Sales data analysis provides companies with factual information about customers, purchasing behaviors, marketing strategies, and more. This information allows company managers and stakeholders to make better decisions more quickly. 

Identifies sales trends

Identifying sales trends can help you narrow your target market and improve sales. For instance, sales analytics might show that you're making most of your sales to a specific age group or customers in a particular geographical region. You can use this information to narrow your target market and boost sales.

Saves money

Sales analytics can help companies save money by offering valuable information. Examples might include:

• Learning about strengths and weaknesses in marketing messaging

• Discovering which products bring in the most sales

• Identifying what prices generate the most sales

• Learning about each agent's sales performance over some time

How to make a sales analytics plan in 6 steps

To use sales analytics effectively, it helps to have a plan. Get started using these six steps for reference. 

1. Decide what information you need.

2. Identify the sales analytics tools and methods to use.

3. Collect your data.

4. Analyze your data.

5. Share the information with company stakeholders.

6. Use your results to make improvements.

Getting started on Coursera

It might help to have a general understanding of data analysis for deploying effective sales analytics. Consider taking the Introduction to Data Analytics course offered by IBM on Coursera. You'll discover what data analysts do and what kinds of tools they use. You'll learn about data gathering, cleaning, analysis, and sharing and become familiar with terminology like data ecosystem, data lake, and data pipeline. At the end of the course, you'll apply what you've learned by performing a series of data analysis tasks, and you'll receive a Professional Certificate to display in your office or share on your professional social media profile or resume.