Sales Data- 6 Metrics All Businesses Should Start Tracking
Historical and current sales data can offer businesses a wealth of information for marketing and forecasting purposes. Learn the 6 sales data metrics all businesses should be tracking.
Sales data offers vital insights into how a business should conduct its operations in the present and future. This valuable information can enable the marketing and sales teams to formulate a data-driven sales strategy. Meanwhile, the same information can provide analysts with purchase trend insights to forecast for projected demand.
In a nutshell, sales data provides businesses with important information that they can leverage to produce more revenue in the future.
One way sales data is tracked is through a point-of-sale (POS) system. Sales data is typically automatically updated into a business' POS whenever a customer makes a purchase on-site or online. This system has the ability to store years' worth of information and by tracking various key sales cycle metrics businesses can gain greater actionable insights to optimize their sales process and customer success.
6 Sales Data Metrics Businesses Need to be Tracking
There are various key sales metrics businesses can begin tracking to gain a holistic view of their operational efficiency and profitability.
1. Track Calendar-Year Sales
Keeping track of a business' sales over a calendar year (January to December) allows them to break down their sales patterns even further, by months or even weeks. The important thing here is for businesses to track their sales over a specific time period to gain a solid understanding of current sales performance and how it matches up to the previous year, quarter, or month.
2. Separate Sales Data by Product
Not every product is created the same and thus, one item is likely to be more profitable among consumers than the other. It's important to review your sales volume and profit by product as it will provide insights into which items have the largest profit margins and which have the highest turnover rates. For the products that are selling at higher volumes, a business can focus more time and energy into maximizing the profit from these items while phasing out the products that aren't selling well.
3. Track Sources of Leads
Sales can be generated through a number of different sources and it's incredibly important for businesses to identify which lead sources their sales are coming from. For example, if a business finds that Google advertising produces a significantly higher percentage of sales than Facebook advertising, it would be wise to invest more money into Google advertising and stop investing in leads that do not bring in enough revenue.
Keeping track of lead sources is an excellent way for companies to better optimize their lead generation and guarantee a profitable return on investment.
4. Revenue of Every Sale
Keeping track of the profits coming in from each sale allows the company to identify opportunities to potentially increase the average revenue from each transaction. Otherwise known as cross selling, this strategy involves recommending or asking the customer if they would like to add on a related product to their order upon checkout.
5. Comparing Sales Between New and Old Customers
A successful business should have a healthy number of both new and returning customers. Measuring the sales percentage breakdown between new and returning customers offers a business a good indication of where the sales revenue is coming from and can reveal opportunities for increasing the customer lifetime value.
6. Track What Happens Before the Sale
Generally speaking, there are many events that can lead up to the final sale and it's important to keep track of which business campaigns and actions are truly profitable. Sales reps should make an effort to track prior activity, such as online advertising and pay per click campaigns to see which actions are yielding the most sales.
While it is true that casting a wide net, such as by running large volumes of advertisements across numerous platforms, will lead to increased sales volumes, it would be far more financially viable to identify profit-yielding tactics and focus on recreating these positive results.
5 Ways Sales Data Analysis Can Increase Revenue
In today's competitive atmosphere, data analysis is a necessity for all businesses. The following are the top 5 ways tracking key sales data metrics can help to increase revenue and maximize profits.
1. Personalizing Value Propositions and Testing Different Price Points
Businesses that have a wealth of sales data can take this information to create customized and personalized value propositions to different segments of their market. This tailored message for each market segment will lead to more sales and repeat purchases. Businesses can also take the sales data they've gathered thus far and test different price points, with the goal of finding the optimal price tag to generate the most sales and revenue.
2. Consolidating Product Offerings
Sales data can often help identify trends in real-time when it comes to product offerings. Through these trends, sales leaders can learn that it may no longer be feasible to offer a certain product and the business may choose to simply cut it out and focus their efforts on the items that are selling more frequently. Companies that are quicker on their feet to adapt to these real-time trends are likely to reach customers before their competitors.
3. Predicting Future Sales
Sales data equips businesses with the ability to forecast future sales based on past trends. This historical data can give businesses a better idea as to how much revenue the company should be earning based on past sales data. Using this information, businesses can order the appropriate amount of stock to meet demand and schedule the optimal number of employees to work each shift.
4. Targeting Repeat Buyers
It's much more cost-effective for a business to maintain existing customers than it is to go out and find new consumers. Sales data can offer insights to businesses and help pinpoint customers or accounts that are less likely to make another purchase. Through sales data, the business should employ a customer retention strategy and come up with different tactics to try and retain the existing customer base.
5. Streamlining Marketing to Better Increase ROI
Marketing can play a big role in attracting new customers but some marketing expenses can be counterproductive. Businesses should use more targeted marketing sales measures using valuable customer data to better increase their return on investment while reducing marketing costs.