In general, sales analysis is the comparison of sales performance to stated objectives. However, companies now have access to insightful data that enables much more in-depth analysis of customers and product lines. Analyzing sales diligently allows your business sales force to optimize efficiency with time and resources.
Acquiring customers is expensive for many companies, as it includes the cost of investments in marketing promotion and the time involved in sales consultation. Therefore, understanding the distinct needs of customers and addressing them with targeted solutions is critical to profitability.
In a December 2012 article, The New York Times noted that companies can use software analytics to break customers into particular tiers and to analyze buying behaviors at the individual level. When a business has a new product hitting the market, for instance, it can use data analysis to figure out which customers are most likely to purchase the new product. This precision guards against wasted resources.
Product Mix Analysis
Product mix also benefits from sales analysis. A product mix is an array of solutions offered in a particular line. Analyzing sales across a product mix helps you make important marketing and sales-based strategic decisions, according to M4B Marketing. If one particular offering is clearly your cash cow, for instance, leveraging its strength to expand your marketplace is one possible strategy. In contrast, companies may recognize laggard products when analyzing product sales. If so, additional training, support and incentives are sometimes offered to sales representatives to boost performance across these products.
Other Uses of Sales Analysis
Sales analysis is used to implement other types of strategies and tactics for optimum performance. In some cases, analysis reveals declining demand and performance of particular products, which offers impetus to discount prices and clear out inventory. Analysis is also vital on new products or services to track whether results are on pace to achieve targeted goals. Recognizing a slow pace early allows time to communicate with and train salespeople to improve sales efforts early, as opposed to waiting until after the target is missed. Reps also use customer profiles to recommend add-on accessories, upgrades or even different types of products. These expansion sales can dramatically boost revenue.
Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.