What is Sales Analytics?
Ask any entrepreneur or CXO the single most important aspect of running a successful business, 99 out of 100 times the answer would be predictable and consistent sales.
That’s because sales is the logical culmination of everything that a company does, whether its producing goods or rendering services. Having a predictable and consistent sales is easier said than done, because no business can ever be 100% certain on the buying behaviour of its consumers. This is where Sales analysis comes into play.
Sales analytics is the science of identifying, modeling, understanding and predicting sales trends and outcomes through company’s internal digitized data, data collected by independent bodies (like Nielsen), macro and micro economic factors using data visualisation and analytic platforms like Tableau, Zoho analytics, Qlikview and more.
Consultants at Peri CRM have been advocating the importance and benefits of sales analysis in organisations for more than a decade. They have worked with sales team across the country in various industries like telcom, FMCG, medical devices and healthcare. And can assure you that this strategy works and gives tangible results.
How to adopt Sales Analytics?
Peri CRM recommends putting up a strong team of two or three sales MIS resources, for about a month, to the task of implementing sales analytics. They should be supervised by a senior sales manager with analytics mindset and put together the team should committ 50% of their working hours to the task. The project should be supported with research, documentation and periodic reviews conducted by a CXO level resource.
Outlined below are the 7 steps to create a robust, sustainable sales analytics practice within your organisation:
The first and foremost step towards any analytics stragtegy is digitisation of the organisation-wide sales data in a computer readable format. Because meaningful analysis can be best done using one of the many technology platforms available in the market, all of which suffer from an inherent limitation that they cannot work on unstructured data. Lets delve deeper into how you can optimally digitise sales data:
- Digitisation: Digitisation is not just typing numbers on spreadsheets. It is about creating an architecture where data from various sales processes can be stored and talk to each other in an efficient manner. You can use nicely designed spreadsheets, Google forms, basic database coupled with web forms or sophisticaed enterprise applications. It depends on the maturity of the organisation, IT budget and overall cost-benefit analysis.
- Organisation-wide: Whatever solution you choose, it is very important that it is organisation-wide i.e. the total sale matches the sale reported in your accounting books, capturing all branches, business verticals and processes.
- Computer readibility: Computers programs are not text friendly i.e. they cannot do alot of processing on texts. Which is why it is important that you optimally codify your sales data including employee codes, branch codes, SKU codes, party codes and retailer codes.
You can bypass step 1 (painful for most organisations) by implementing a Sales automation software like Peri CRM that automatically digitizes the sales data of an organisation using proven, industry best practices. In addition to digitizing the data, software like Peri create a seriousness around sales improvement by bringing the entire sales function into a single umbrella and help churn out structured data which can be conveniently fed to a sales analytics platform like Tableau, and Power Pivot.
With the coming of SAAS (software as a service) the entry barriers to Sales automation has been tremendously reduced. Earlier, a sales automation initiative required annual IT budgeting and used to cost anywhere between 1-5% of annual sales. With the higher ticket size, the stakes used to be higher and sales leaders used to be super cautious in picking such projects. Now, sales automation in India starts at Rs. 200 per user per month which means that for a 50 member sales organisation, it costs less than the monthly salary of junior most resource in the organisation to implement a function-rich, scalable sales automation platform.
Years of research by top notch consulting companies has shown that anywhere between 30-60% CRM implementations fail even when the company selected the best sales automation software, deployed senior expensive consultants for the job and spend insane mandays on the project. Can you guess the top reason or root-cause of this dismal success rate in sale automation?
70% of all CRM fail due to lack of Adoption by the end users
Which means your job of implementing analytics is dependent on sales users adopting the automation software, using it day-in and day-out with a high degree of precision.
Alot of Indian CRM’s focus on features and data entry but ignore this crucial aspect of technology. Peri CRM has nailed this problem at a DNA level by designing an application with Sales rep or the end user as the first beneficiary. Peri has incorporated years of on-field experience into the application so that the end-user adoption rate is close to 100%.
The moment you see sufficient traction from sales users in terms of adoption, data entry, adherance to sales processes, it is time to shift gears and move into reporting and dashboarding. By psychology, humans like seeing an output of the work they have been doing. If that doesnt happen, they tend to lose interest. A typical Sales automation application comes with a set of standard reports based on metrics and key performance indicators (KPI’s) used in a specific industry and handful of customised reports based on specific requirements. Although these generic reports are useful for MIS teams, they do not generate enough interest in the real sales stakeholders like sales director, CEO or the promoter.
That is where tailor-made, role based reporting and dashboarding exercise comes into play. Peri CRM spends substantial time with the above mentioned stakeholders and utilises deep experience in business consulting to derive the right set of reports and dashboards targeted at specific roles and responsibilities in the organisation.
Few examples are:
Sales Director: A report or dashboard for a sales director should start with a pan-India view of demand (from orders) and supply (from stock movement or sales). It should then talk about the leading indicators of sales efforts like average feet-on-street, number of customers touched and typical conversion cycle.
Finance head: A report or dashboard for a chief financial officer should talk about the inventory v/s sale trend at each depot in the country which can help him plan the production and supply chain better. It should also give the average trade promotion spend by product brand and category across various regions in the country.
The crux of the discussion is that it is important to get into the mode of periodically creating and updating reports and dashboards for key stakeholders to address the business movements and dynamic market behaviour.
A very important step which we have seen alot of companies miss or do not spend enough time is running meetings using the reports and dashboards created in the previous step.
Rule of the thumb is that it takes anywhere between 2-3 iterations for a report or dashboard to be fully accepted in a sales organisation. Only 10-20% of the reports that get accepted last for 3 months or more. This means that the report where you spent alot of time and effort may be lying somewhere without anyone actually utilising it.
You need to ensure this doesn’t happen and the best way in our experience is:
- Do not aim for the sky, keep the active number of reports and dashboards under 10.
- Run meetings after meetings on a report till it gets full institutionalised or thrown out of the system.
- Once finalised, create a mechanism to automate the delivery on email, webpage or any other relevant mode.
You have nailed this step once stakeholders start referring to data from a particular report or dashboard and are super confident on its accuracy.
Once the sales team is accustomed to getting reviewed on data generated from your implemented sales analytics solution, do not make the common mistake of setting targets on an exhaustive list of key performance indicators (KPI’s). That is never gonna work.
Instead, identify the top 3 KPI’s which have gained maximum popularity during the above step and set realistic quarterly targets (not monthly) which say 80% of users can achieve. Remember, it is important that a KPI should be achievable in the eye of the owner.
Depending upon the policy of the organisation, you can attach a transparent reward and penalty policy around the quarterly target so that the entire organisation is aligned to the same goal and it remains a fair game for everyone.
Sales is a very interesting profession. It attracts alot of people who have a flair for it, as well as people who treat it as the last resort. What this means is that a fully functional sales analytics platform within your organisation (say Peri) will throw a set of users who have consistently not performed despite repeated follow ups and reminders. Those who are immune to the “carrot and stick” principle highly effective in sales. It is important for a sales analytics platform to point you towards the requisite root-cause of a non-performance. Some typical root-causes we have seen are:
- Sales Discipline
- Selling skills
- Personal will
- Gaps in mentorship or supervisory
- Geographical understanding
- and more
Once the root cause has been identified, it should be followed by clear communication, well-defined correction strategy, peer-support, training and more frequent reviews using data.
In the end we just want to reiterate the importance of analytics in sales and organisational performance. Most industries across the world are going through a digital transformation specifically of their sales function because they understand that every second, there is unimaginable volume of information exchange happening on the world wide web which is impacting the expectations, requirements and personas of both buyers and sellers of company’s products.
And it is only a matter of time, when organisations will have to mandatorily move from a legacy platform to a more advanced sales analytics solutions if they have to remain relevant in the market.