How to use your sales data
Although data is everywhere and readily accessible, few companies truly optimize the usage of their sales data as efficiently as possible. According to HBR, 70% of companies don’t consider themselves “data-driven” while more than 50% have stated that they don’t view data as a helpful asset to their everyday operations. In today’s world, the possibilities stemming from data utilization are endless: performance optimization, cost reduction, and new client opportunities are among the most important. In this article, we will discuss several possible applications of data analysis, and how you can get the most out of it.
Before being able to properly analyze your data, you should start by making an inventory of all the possible available data within your company. This can arise from within different departments (marketing, sales, accounting, finance, etc.) or even from a service dedicated to data storage. Once all available data is collected, it will need to be cleaned up in order to be properly utilized. The data-prepping process is often the longest (accounting for 20% to 50% of total time spent on a data utilization project), but is crucial for the success of the project: poor data leads to poor results.
Knowing which data is in your possession will allow you to find out which essential info might be missing in order to complete the analysis of your choosing. To retrieve such missing data, you can gain access through specialized companies such as Linkdep or governmental services in order to compare your performance to your competitors for instance. Your data needs will thus depend on what you are looking for.
Maximization of data usage
Once the data is cleaned, you may proceed with your analysis. There are several ways to do so: descriptive analysis explaining a trend, predictive analysis looking to prepare for future outcomes, and lastly prescriptive analysis to cause an intentional event. In this article, we will focus on descriptive analysis.
As mentioned, descriptive analysis will help explain a current or past situation for your company. Thanks to this, you can learn more about your performance by scrutinizing various details and aspects of your operations and sales. For example, you can categorize your sales by SKU, sales channel, geographic region, etc. The goal is to get a breakdown of your performance in order to detect possible zones of improvement and new business opportunities.
To learn more, you can use historical data to model trends you are interested in. You can also cross-reference different datasets in order to paint an even clearer picture of sales performance, along with explanations to your results. For example, you can compare your SKUs per geographic region or sales channel. By conducting various analyses with data on marketing and advertising expenses, for instance, you can also bring elements of additional responses to better understand your current situation. Additionally, extra marketing expenses in specific regions may explain gaps in performance between themselves or the SKUs in question.
If you have data on your competitors or market, you can also conduct a benchmarking analysis in order to compare your performance to your competitive environment. Multiple cross-analysis will help you explain the differences in trends you might notice in your market. Benchmarking can also be used for internal purposes, by comparing a region or sales channel to the rest of your current or past activity.
If you are a manufacturer or distributor, you can seek to obtain sales data on total sales for the retail stores in your sales channel. In doing so, you can then identify cross-selling or upselling opportunities by analyzing consumer behavior. This can be very interesting to put in place promotions to incite customers to buy more products during their general shopping time. For example, if you sell sparkling water or beer (product A), and you find that your products are often bought with chips or jerky (product B), you can put in place a “Buy Product A and get XX% off Product B” type of promotion. This would help bring about a sale that wouldn’t otherwise have happened.
In conclusion, data usage is an undeniable advantage. Currently, it is necessary for your company to consider this as a major asset. Nevertheless, the data that you have on hand is useless if you do not analyze it. We have already seen certain types of analysis that can help you better understand your business performance and how to improve it. It’s your turn to give it a try!
If you necessitate help to properly use your data, we remain at your disposal. Do not hesitate to contact us to reserve an introductory meeting in order to determine your needs and how to meet them.