Combining through mountains of sales data might not be at the top of your priority list, but if you really want to hit your sales goals consistently, you’ll need to stop relying on guesswork and intuition.
In order to understand where you’re going wrong, what you can do to improve, and how to find opportunities for growth, you need cold hard data. If you want to start making informed decisions about your sales process and increase your sales effectiveness, you need sales analytics.
What is sales analytics?
Sales analytics is the practice of using sales data, trends, and metrics to gain visibility into sales activities. These insights help sales teams and managers optimize decision-making, overcome roadblocks, and improve sales processes.
What are the different types of sales analytics?
Sales analytics provide actionable information that sales organizations can use to improve sales outcomes. There are four categories the insights can fall under:
- Descriptive: Summarizes observations of sales data.
Example: Average deal size dropped by 15% between September and October.
- Diagnostic: Aims to identify potential explanations for observations.
Example: Customers generally spend less money once summer is over.
- Predictive: Uses historical data and trends to anticipate future opportunities and roadblocks.
Example: For the past 5 years, average deal size fell between September and October, so it is expected to do the same next year.
- Prescriptive: Suggests actions that can help reps or teams benefit from the insights.
Example: Offer a discount on a complementary product during that period to encourage cross selling and increase average revenue per sale.
Why is sales analytics important?
Do you know which of your products are selling best? Or who your best performing reps are? What about your worst performing reps? Do they know where their deals are getting stuck, or why? Without data on your side, it’s hard to come up with concrete answers to these questions. Or any questions about your sales process, really.
Sales analytics helps you break down your sales data so that you can better understand how your organization is performing against its goals, and how you can improve. From the top of the funnel all the way down to the bottom, here’s why you need sales analytics:
More market opportunities
If you’re preparing to launch a new product, sharpening your sales pitch, or just curious about customer sentiment, sales analytics is your best friend. It can help you identify market opportunities, analyze trends, and understand customers’ perception of your brand so that you can better appeal to your audience.
Improve lead generation
If you use market research to identify potential prospects, you're off to a great start. But with sales analytics, you can go a step further. Using internal and external data, sales analytics can help you understand which potential customers are most likely to close. With that information in hand, you can focus attention on more promising leads and spend less time chasing dead ones.
Sales analytics (and especially purpose-built sales analytics software) provides direct visibility into the sales pipeline. It can help team leaders monitor sales activities, analyze rep conversations with prospects, see how buyers are interacting with sales documents, and more. Armed with these insights, you’ll be able to set your reps up for success and provide the resources they need to succeed.
Using historical data and trends, sales analytics can help managers better understand what to expect in the future in terms of revenue, staffing, inventory, budgeting, and beyond. If high growth is expected, sales cycles, marketing plans, and hiring schedules can be altered to capitalize on the increase in demand.
Improve customer satisfaction
Sales analytics can also help keep new customers happy and engaged. You can use sales data to determine which specific actions, both during and after the sale, help build deeper client relationships. For SaaS companies, a good example of this is the critical hand-off of new accounts from from AEs to customer success managers. Sales analytics can help facilitate this hand-off and make the transition as smooth as possible for your customers. Across the board, these insights are invaluable for understanding how you could improve the experience for future customers, which will make it far easier to retain their business, or even up- or cross-sell them in the future.
Streamline sales planning
Sales analytics helps managers track and analyze rep performance to understand what’s working and what isn’t. This allows them to establish playbooks for reps to follow, identify and eliminate roadblocks, streamline the sales process, and make adjustments to improve rep performance. It can also help them better manage their sales teams in terms of budget, geography, quotas, and so on.
With sales analytics, managers have access to data that can help them determine which products or services are the most (and least) profitable, and allocate resources accordingly. This allows them to reduce the amount of time spent on less profitable activities and increase time spent on the most profitable deals in order to boost overall revenue.
10 Most important sales metrics
There are tens, if not hundreds of sales metrics out there. From customer interactions to sales activities, they can provide insight into multiple aspects of an organization, so it’s important to choose metrics that are relevant to what you want to analyze. Here are just a few to get you started:
1. Average Deal Size
Measures the average dollar amount of each closed-won deal, which can provide a starting point to grow the size of your deals.
Revenue ($) generated from closed deal / # of closed-won deals
2. Average sales cycle length
Details the average amount of time it takes for a rep to close a deal from the first point of contact with the prospect. It measures how quickly reps are able to move prospects through the pipeline and generate revenue.
Total # of days it took to close all deals in a given period / Total # of deals closed in that period
3. Churn rate
Measures the number of customers who cancel or don't renew their subscription over a given time period. It can help you understand how often (and why) your customers are leaving.
Number of churned customers / Total number of customers
4. Weighted pipeline value
Highlights total expected revenue from all of your sales opportunities in a specific time frame, after accounting for probability of closing.
Total $ value of all opportunities x probability of closing
5. Quota attainment
Measures the percentage of closed deals in relation to a set quota (by number or value). It can be used to track progress towards goals and evaluate rep performance.
# (or $ value) of closed deals in a given period / Quota (# or $ value of deals) for that period
6. Sales growth
Measures the rate at which sales have grown over a given period (such as a week, a month, a year, etc.).
(Current period sales - previous period sales) / Previous period sales x 100
7. Customer lifetime value (CLV)
Highlights the average amount of revenue a company can expect from a typical client over the course of the relationship. It is often used in relation to cost of customer acquisition (CAC) to determine how long it takes to recoup the investment required to earn a new customer.
Sum of all revenue generated by an individual customer
8. Win rate
Measures the percentage of deals that are closed-won within a specific time period. It is used to gauge sales rep performance and overall sales effectiveness.
Total # of won opportunities / Total # of closed opportunities (both won and lost)
9. Lead conversion rate
Measures how many leads are converted into sales. This metric provides insight into how your entire term is performing and how effective your sales funnel is.
# of leads converted into opportunity in a given period / # leads created in that period
10. Average lead response time
Measures the average time it takes sales reps to reach out to a lead after being identified as a lead
Total time to respond to leads within a given period / # of responses in that period
Best sales analytics software
From prospecting to closing, sales analytics is useful at every stage of the sales cycle. Here are some of the best sales analytics tools to help your team measure, track, and reach its goals:
Salesforce is best known for customer relationship management, but beyond tools like opportunity tracking and contact management, it also boasts an impressive suite of sales analytics solutions. Each of its products come with built-in analytics and reporting capabilities, but those are just the start.
For deeper insights, Salesforce also offers Tableau CRM and Tableau. Tableau CRM goes above and beyond Salesforce's standard analytics by integrating any and all of your data with your CRM. It provides actionable insights and AI-driven analytics right in the Salesforce platform, helping your team spot opportunities and predict outcomes without disrupting workflows.
Tableau, on the other hand, is a standalone analytics solution that operates independently from Salesforce. Regardless of the source, it helps turn data into insights that drive business growth.
Clari is a revenue operations platform that aims to make your entire revenue process more efficient and predictable. Remember when we mentioned all of that data that gets generated on a daily basis? Clari automatically gathers it from all areas of your organization, then uses AI to create dashboards and execution insights. It unlocks the complete history of your revenue data, making forecasting, pipeline management, and revenue intelligence far more accurate. With total visibility across your business, it empowers every team member and leader with the data they need to make informed decisions.
Gong is a revenue intelligence platform that uses AI and machine learning to leverage customer interaction data to create real-time insights that help you close. It automatically collects information from calls, meetings, then breaks it down into actionable intelligence about your deals, customers, and market. The result? Complete visibility that helps you reduce deal risks, replicate winning behavior, and perfect your messaging.
Outreach is a sales automation platform that aims to transform the sales process, increase collaboration between sales and marketing, and increase revenue per rep. It provides conversation intelligence, buyer sentiment analysis, and team performance reporting to help reps and leaders maximize sales effectiveness across their organization. By pulling data from Salesforce, it shows reps how buyers react to each sales activity, helping them tailor their approach with personalized interactions.
Closing is arguably the most important step in the sales process, yet there always seems to be a lack of data around it. Many teams invest a ton of money and resources into top of funnel software like Gong or Outreach, but when it comes time to seal the deal, there’s a black box. Without visibility into your pipeline, or a way to track your proposals after they’re sent off to prospects, you might as well be sending them into the void.
Proposify gives you x-ray vision so that you can see exactly what's going on at each stage of the proposal process. With the live activity feed, you can see what your prospects are doing and get a play-by-play on your deals. Using the deal dashboard, you can understand what's happening in the pipeline so that you can start breaking through bottlenecks. And with sales reports, you’ll have easy access to all of the metrics your CEO actually wants to see.
Without data on your side, you have limited visibility into your sales process, and could be spending too much time navigating unnecessary roadblocks that block your path to closing. With sales analytics software, you can take back control by leveraging your sales data to improve processes and increase your sales effectiveness.