Driving growth through data – 7 sales metrics to start on your BI dashboard
Businesses have never before had access to so much rich data. This can provide you a huge range of opportunities, however with so much information available, it can be hard to know where to start. If you want to use data to help grow your business, try taking a deeper look into your sales process.
Through using your sales data effectively, you can identify opportunities to cross-sell or up-sell products, understand why your customers are (or aren’t) buying and know the most effective way to close sales. This can help your sales team and website to work more effectively. But what metrics should you be measuring to get the information you need to make these decisions?
As you may expect, it all starts with looking at your sales pipeline. A sales pipeline provides you with a snapshot of the sale opportunities your business currently has and an estimate of sales (and resulting revenue) that will be generated in the coming months.
If you’re ready to go beyond the usual Sales by month or Staff productivity reports, here are seven things you can measure to keep the ball rolling.
1. Average sale size and duration
While every sale may be a cause for celebration, not all sales are worth the same amount. It’s worth identifying whether most of your sales are large deals with additional add-ons or if your bread-and-butter revenue comes from many smaller sales with lower margins.
By tracking the average sale size, you can see which of your sales team is making the quick, small deals, and who is focusing on the highly valuable deals which can take more time. It can also give you additional insight on high-value products which are quick and easy to sell – showing you where your sales team can get some quick wins.
Start by:
Dividing the revenue of the sale by the time it took to get the sale
Understanding your average revenue per customer (APRC)
Calculating your average order value (AOV)
2. Who isn’t buying (anymore)
While it’s very important to know who your customers are, it’s also important to know who isn’t buying your products, and understand why.
A quick way to check this is to check whether any of your customers are buying less from you than they did before. You can look at sales from particular customers on a year-on-year basis and over a longer period of time. If sales have dropped, this can be an indication that these customers are buying elsewhere, or that their business has changed over time.
Having this data allows you to talk to your customers to leverage opportunities and identify threats before it’s too late.
Start by:
Comparing this year’s ARPC to last year’s by customer (look for changes in percentage rather than revenue to get a better idea of which customers to focus on)
If you identify a handful of customers - great, give them a call and ask how you can help get them back. If there are thousands of customers, try cross-referencing with, or grouping by, external demographics (age, gender, location, favourite bear…) to identify a pattern
3. What isn’t working
Every business wants to convert all the prospects in their sales funnel, however, inevitably sales drop off along the way and it’s important to understand why.
The longer a potential sale sits in the pipeline, the more opportunities a customer has to consider your competitors
Businesses need to understand what they can do to ensure the sales process is as seamless as possible and understand where any gaps are. Questions might include:
How quickly you respond to customers. Everyone knows that persistence is key to sales, but is your follow up as good as it could be? There are some sophisticated automation tools that can help if resources are an issue.
Also consider how long it takes to convert and complete a sale. Some sales have long lead-in times, but many can be closed relatively quickly. The longer a potential sale sits in the pipeline, the more opportunities a customer has to consider your competitors. Look at response rates to queries, requests for information etc. to see if this can be improved.
Factors such as long delivery timeframes can negatively impact a customer’s view of a company and make them less likely to order again. But you have to know what these pain points are before you can fix them.
By constantly monitoring this data and putting actions in place to avoid losing sales or customers, your overall sales numbers will improve. Of course, you need to be able to track this data before you can report on it. If you’re not using an app to do this, we recommend PipeDrive or Hubspot – both can easily integrate with many systems and are able to serve up the data you need.
Start by:
Calculating how quickly you respond to leads
Understanding the rate of follow up contact
Measuring how long it takes to convert a sale
Working out the average amount of time it takes to complete a sale including delivery
4. Why you are converting or losing sales
Do you know why certain products are performing well and why they aren’t? This insight can help you to identify your best and worst performing products and indicate what you need to order more or less of in the future.
Understanding the timing and source of your sales can show you which marketing activities are working and if there’s any other factors in the market you need to be aware of. You can also use public datasets to see if there are any external factors that are affecting your sales such as weather or traffic. If you suspect these sorts of things could affect your business, this is a great way to test your theory.
By tracking information about your sales, you can ensure you keep doing what works, and stop doing what doesn’t.
Start by:
Identifying which of your products sell well and which don’t
Benchmarking your products against your competitors to see if your pricing and features are competitive
Comparing sales from before, during and after campaigns so see which campaigns are the most effective
Understanding where your leads are coming from to identify which of your advertising channels are most effective
Finding out whether your sales are coming from new or existing customers
5. Cross-sell and up-sell opportunities
Once a sale has been made, there is often an opportunity for cross-selling and up-selling, particularly if you stock similar sorts of products. Understanding which products your customers buy together and which have natural synergies with each other, allows you to create opportunities for up-selling to occur.
This could be as simple as displaying related products in a high-profile position in your e-commerce store or giving your sales team a specific prompt when certain products are sold. If you’re already doing this, think about how you can also use your rich dataset to pre-emptively encourage people to buy your products. This can be done by emailing customers who buy a product that needs to be replaced regularly or targeting customers with a specific campaign when a new product is released from their favourite brand.
Start by:
Identifying which products people often buy together
Ensuring your website and sales prompts reflect this
Asking your customers what else they would like to buy from you during the sales process
Prompting your customers to buy any product that’s regularly replaced
6. Who is selling what
Most businesses already assign sales to particular sales people, but getting a deeper understanding of who is selling what can give you an indication of what they are actively selling (and also not selling).
By understanding who is selling what and why, you can ensure sales training is appropriate and that everyone in the team is confident selling every product your business stocks.
Start by:
Ensuring your sales team fully understands all your products and their benefits
Asking your sales team which products they enjoy selling and which they don’t
Finding out what objections customers have to specific products
Understanding who is selling more or less of a particular product
Looking at your customer demographics to see which sales people are selling to which types of customers
7. Closure Rate
The closure rate focuses on the final stage in the sales pipeline, just before the sale is made. It tells you how often a deal closed and how often it falls through. Depending on your business, you may have invested a great deal of resources in the lead by the time it gets to this point, so a high closure rate is the goal.
A low or oscillating closure rate shows that your offer may not be competitive in the wider market and often means that your value proposition isn’t hitting the mark with your potential customers. Depending on your situation you may review your products and pricing. You might also consider providing additional training for your sales team.
Start by:
Calculating the rate of sales that don’t close at the final stage of the pipeline
Find if there are particular sales-people that fail to close more often
Find if there are particular products that fail to close more often
Talking to your sales team and customers to find out why
If your closure rate isn’t as high as you would like, try analysing the market and your competitors to see if your value proposition is still effective
Measuring a sales team’s performance has evolved from the simple spreadsheets used back in the 20th century. There are now advanced business intelligence software options that provide dynamic reporting capabilities with dashboards to help automatically track key metrics, including sales information from your website. Using the right metrics allows your sales process to be more proactive, while giving you the ability to make strategic decisions that will benefit your business.
