Spend the same amount of time analysing sales reports as you do financial reports.
Revenue comes from sales paid for by customers, so analysing sales reports is pretty much at the top of the ladder when it comes to management functions.
It is impossible to make proper business decisions without having accurate and relevant information. Business owners need to stay on top of their company’s growth, but it can be difficult to pinpoint who or what is contributing to its success or failure without information. To make proper informed decisions you need proper sales reporting.
Sales metrics are the measureable indicators that tell you how each aspect of your sales operations is performing and whether you are achieving your targets. Metrics help you clarify where your efficiencies are as well as your inefficiencies.
There are a seemingly endless number of things you can report on, but it all boils down to your company’s growth needs and measuring the things that will allow you to make the best business decisions. Here are a few fundamental data points you may want to start with when you begin analysing reports:
If you are selling products you should have a budget or forecast in place for products, sales staff and customers if you sell business to business. The reports should help you identify which products are your top sellers, which products are growing or declining.
Once you have this information you can increase or decrease your stock holding according to the recent sales history. You can look at the poor sellers or good sellers with declining sales and try and figure out why and try and rectify the problems.
The same issues apply to your sales staff. Who is growing and who is shrinking. What products are each person selling or which products are some sales people not selling? How many customers are they selling to, how many new customers, how many lost customers, etc?
You should know your best customers, those growing and shrinking. Which products they are purchasing and which they are not. Are your best sales people calling on your best customers?
And finally sales reports should have the gross profit for all products, customers and sales staff. This will allow you to see what effects discounts are having on your business.
Sales reporting can help you answer these questions and much more; Why does a team member have a lot of prospects but isn’t closing any deals?; Why is one team member about to break a sales record while another can’t get a deal past the second stage of the pipeline?
There is more to measuring your company’s growth than by the number of sales you make — you need to know exactly what is driving those sales to figure out how to keep them up as your market grows. Once you understand the reasons behind your data and results, you will have a clearer understanding of where to focus your sales team’s efforts to drive decisions about production quantities, timelines, employment needs, pricing, and other essentials that keep your business flourishing.
Geoffrey Moore said - Without data analytics, companies are blind and deaf, wandering out like deer on a freeway.