In today’s highly competitive marketplace, sales teams must have a way to stand out. Data analytics provides access to a wealth of sales data that can be analyzed by customer, region, individual rep, and product.
To help you leverage your data, this blog will explore four key questions you need to be able to answer to boost your sales analytics.
Do you know your most valuable customers and their lifetime value?
Data analytics offers a 360-degree view of customer profitability so your sales team can focus their efforts on those with the highest lifetime values. To determine a customer’s lifetime value, you need to calculate average purchase value, multiply this by purchase frequency rate to determine customer value. Then after you calculate average customer lifespan, multiply that amount by customer value to determine customer lifetime value.
By isolating your most valuable customers, you’ll also identify your bottom earners and those with a high cost-to-serve. Armed with the facts, your sales team will be able to fine-tune their sales strategy, ensuring you get the most value from your budget.
What channels are your customers coming from?
Before data analytics, it was difficult for companies to determine which marketing campaigns garnered specific returns. Since customer purchases are no longer confined to brick-and-mortar shopping experiences, greater visibility is critical to data-driven marketing campaigns. Data analytics enables your marketing and sales team to track customers from their first interaction through to purchase and then ongoing purchases. This empowers your team to prioritize spending on the best performing channels, thereby, attracting more customers.
What is your profit margin for each product? Has it moved recently?
Profit margin is the big picture view of your profitability. With Phocas, and similar solutions, you are able to use the grid to check your profit margin by product group. From there, you can focus on your areas of concern and drill down into the data for more detail. For instance, you may be concerned about a specific type of customer. Drill down to see the margins for customers of this type and determine where the margin is being eroded the most. In this example, your sales team can use this information to focus their efforts on improving relationships with these customers to boost your numbers.
What customers have you lost this quarter compared to last year?
Customer loss is a normal part of doing business. As such, many companies focus on customer acquisition to replace lost customers. Yet, customer retention costs far less in time and money than acquisition. Because customer acquisition is costly, the ability to determine how many customers you are losing is essential to your bottom line. The most effective way to save a declining customer is to quickly identify declining purchasing values so your sales team can intervene before a customer is completely lost.
Analysis of customer buying trends also provides new ways to refine pricing strategies or improve product mixes to match your customers’ changing preferences. Interactive dashboards allows you to ask questions of your data and cross reference your current practices to identify anomalies in the data.
To find out more about boosting sales with strong analytics, download the Cross-selling and Upselling eBook.