Why Analyzing Sales Data Is Important for Businesses

High-performing sales teams use data as the foundation for their success. Whether looking to increase sales, maximize profit, grow the sales team or beat the competition,  Sales leaders have more than enough data readily available in their customer relationship management (CRM), and/or enterprise resource planning (ERP) systems.

Many companies implement a CRM system and push their salespeople to continuously feed the system, often resulting in subjective information rather than reliable data that can be analyzed in the future. This is mainly due to the lack of set, scientific metrics that salespeople should follow when inputting any information about their customers, the status of leads/prospects, or their sales activities. 

The key for sales teams is to identify the most impactful data points and key performance indicators (KPIs), interpret the findings, and take action to reach or exceed sales goals. An effective way to accomplish this is through well-defined sales KPIs.

Why You Should Track Sales Data 

It is very important to understand the most critical KPIs for sales that will enable you to manage sales more effectively and optimize as well as analyze every sales process in detail. In order to get a complete picture of your sales development and data, you need to centralize your data  in an interactive form that enables you to dig deeper.

In order to grow your sales team, increase your revenue, and beat out the competition, you must understand data. Whether you’re a sales manager trying to motivate your team, or a sales rep aiming for a promotion, you need to understand which sales KPIs and metrics to track, why they matter to your company, and how to use them correctly.

You can analyze a bevy of sales metrics for your business, such as:

  • Sales Growth: This metric tells you how your business is performing compared to a previous period, such as a quarter, a month, six months, or a year. It will show you if sales have grown, declined or remained flat from a prior period.
  • Sales Target : This metric lets you know whether your team is doing what they should, if they need help or if the whole strategy should be changed or adjusted. It’s crucial for forecasting, and it lets you know if other factors can impact your bottom line.
  • Product Performance: By using sales data to analyze product performance, you can learn which products sell well and which don’t. You can learn the favored color, type, or time of year for certain products. This metric can tell you if you should order more or scale back inventory, or if you should focus on one product over another.
  • Sell-through Rate: This data set is handy for managing inventory. It tells you the amount of inventory you’ve sold in a month compared to the inventory you have on hand. That data can inform your sales strategy.
  • Lead Conversion Rate: Customer acquisition costs can eat away at your profits, especially if it takes a long time to convert a prospect into a customer. Through your sales data, you can track your rates of converting leads. If it’s taking too long, you’ll know you need to tweak your customer acquisition efforts.
  • Sales by Channel: E-commerce has exploded during the pandemic, forcing business owners to sell via multiple channels. By tracking the different places sales are coming from, you’ll get a better sense of which channels to focus on.
  • Opportunities-to-Win Ratio: Sales metrics like these can help you identify and train a sales team to close more deals. Looking at each rep’s opportunity-to-win ratio can enable you to identify areas of improvement and act accordingly.
  • Upsell & Cross Sell Rates: With upselling tactics, you could encourage your customer to buy a more expensive upgrade or package of your product or service while cross-selling concentrates on purchasing an additional related product or service. It also improves your customer service since relevant suggestions for additional products and/or services can increase customer loyalty and customer satisfaction.
  • Customer Churn Rate: The customer churn rate expresses the number of customers who stopped using your company’s products or services in a defined timeframe and gives you a realistic overview of your customer retention strategies and trends.
  • Sales Qualified Leads: The qualified sales leads metric provides you with a look at the number of potential customers who become sales opportunities. By knowing how many leads your team is converting to sales, you can determine the strengths and weaknesses of your lead generation and sales pipeline processes. It’s a great indicator of your sales team’s effectiveness with their current resources. With this data, you can help your sales team to reach its full potential.
  • Marketing Qualified Leads: A marketing qualified lead simply refers to a lead that is ready to be given to your sales department for outreach. By identifying what a qualified lead looks like for your business—whether through form submissions, website behaviors, or some other action—you can track the steps that lead to the contact’s readiness for sales, extracting the effective points in the marketing and sales pipeline.

These are just a few of the sales metrics you can track. What makes sense for your business depends on the type of products you sell, the seasonality of your enterprise, and how long you’ve been in operation.

Why Should You Track Sales Analytics? 

Small businesses collect a lot of data. With every purchase, customers have easy access to a wealth of information to help them make all kinds of business decisions. Sales data is one of the main data sets that needs to be analyzed for a variety of reasons.

  • Increase cash flow.

Cash is the lifeblood of any business. The way to generate cash is sales. By looking at your sales, you get a better understanding of your current cash position and what it will look like in the future.

  •  Inform sales and marketing decisions.

Small businesses are selling their products through several channels online, including their own websites and general marketplaces like Amazon. Without tracking those sales as well as your in store ones, you won’t be able to identify the areas you should focus.  For example: You spend time marketing on Facebook, but most of your sales come from Amazon. You may also be preparing to order additional inventory without realizing that demand for a particular product is declining.

  •  It helps you focus.

Small business owners have little time to scour sales data, let alone find new customers. “Sales analytics can help businesses narrow their focus,” said Tom Sullivan, Vice President of Small Business policy at the US Chamber of Commerce. After examining a company that sells directly to consumers and distributors, he realized that the company was more successful in selling exclusively to distributors.

  • It informs future decisions.

Sales data will help a company make future decisions about inventory management, marketing activities, schemes or offers to be rolled and/or changes in manufacturing processes. Based on sales data, major decisions like continuing or discontinuing a product can be made. Those future decisions will help the external stakeholders of the company decide whether or not to invest in the company.

The impact of not analyzing sales data properly is dire. Potential consequences include:

  • Inaccurate Reports and Dashboards: Inaccurate data impacts the sales or marketing teams ability to stay on top of qualified leads or opportunities. Employees could be wasting time on the wrong opportunities. False reports can lead to the company’s top decision-makers making choices based on inaccurate data.
  • Wasted Time and Money: Spending money on campaigns will be inefficient if the ROI reporting is incorrect. Bad data can report that your advertisement campaign only sourced $6k worth of deals when it could have actually been $60k. Not seeing that proper ROI could lead to missing out on the chance to rerun successful campaigns and efforts.
  • Decline in User Adoption: Users might use another system to keep track of their data if they have little to no confidence in the quality of data. Employees tracking data in another system is another example of time and money wasted on a powerful CRM system.

How To Keep Sales Data Ready To Analyze 

One of the biggest challenges that most organizations face today is ensuring high availability and accessibility of data over the complex set of networks they have in place. Having around-the-clock and real-time access to crucial business data can help organizations carry out processes seamlessly and maintain a steady revenue flow. Organizations, thus have a growing need to scale their systems & provide the support for accessing data seamlessly. 

Data Replication is one such technique. It’s benefits provide:

  • Accessibility of Data Through APIs
    • SaaS backup and replication helps you to break your SaaS data silos by extracting SaaS data, including metadata, through cloud-based backup and replication apps and loading it onto on-prem or hosted servers. It eliminates many API issues. The results are regular updates for predictable and reliable sales  data accessibility. Organizations  can benefit from replicating data to on-premise servers to quickly draw insights from their  sales data for analytics initiatives.
  • Delivery of Data to Meet Corporate Mandates
    • Using backup and replication solutions to make it easier to move sales data to public or private servers to meet corporate mandates is an attractive option since it can speed innovation by reducing data delivery time while also making the most of dataops’ time and resources through automation. It is also likely to empower companies to innovate as solutions continue to evolve to meet sales KPIS through analyzing the sales data in faster and easier ways. 
  • Data Compatibility 
    • Creating copies of large sets of sales data is challenging without the right tools.The automation offered by SaaS backup and replication tools is evolving. Examples include: 1) quickly replicating both data and metadata to on-premise databases without the need to update schemas; 2). meeting RTO goals, restoring data within a few clicks.


What gets measured gets improved, which obviously applies to sales. These insights can range from which sales rep is most productive, on what days or times you sell most and what you’re selling more or less of, or which promotions are the most successful. 

It’s important to determine the right sales KPIs for your business, products, and sales organization. To create better sales KPIs, you need better tools to get hold of all your data that can help you to properly analyze your sales data and can help you to track your KPIs and metrics with more accuracy so that you can take right decisions to boost your sales and increase your organizations growth and profitability.

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