Sales Analytics in Marketing

For effective work, a marketer must know a lot or almost everything about the company's sales. And even be able to set up a sales analytics system.

It's no secret that the main task of marketing is the quantitative and qualitative growth of sales. To effectively manage any process, it first needs to be measured against all criteria that are important for decision-making. As a result, a database is formed that serves as a source of information for managing commercial activities.

It would seem that all of the above are truisms, but in practice, almost all companies I have worked with or in had certain problems with sales analytics. The accumulated experience in this area has revealed several key points that may be of interest to everyone working with sales analysis, especially when a company reaches a certain level of sales that requires setting up a system for recording, processing, and presenting data for use in work.

List of Sales Database Fields

This is the first thing that requires coordination by all interested parties. In other words, what information has independent value and can serve as a parameter for selecting records for individual deals. In practice, the number of such fields can reach several dozen, and I recommend обязательно including the following parameters (even if they seem redundant when starting a business, in 3-5 years it will be very labor-intensive to restore the database manually and supplement the fields):

- product/service (at several levels of indicator aggregation, for example, alcoholic beverages – wines – red wines – dry red wines – wine "X" red dry 0.75 l. 13%);

- client (also several levels of aggregation, for example, buyer for own consumption – heavy engineering – LLC "A");

- actual and / or legal location of the client (for example, Russian Federation - Volga Federal District - Samara Oblast – Samara urban okrug - Leninsky intracity district of Samara urban okrug), preferably with the urban okrug, its district or settlement at the lowest level;

- cost characteristics of the deal: total cost, prepayment / postpayment, discounts, etc.;

- manager assigned to the deal;

- source of the request (recommendation, response to advertising channels, "cold sale", etc.);

- date of sale (contract signing, prepayment, shipment, postpayment).

The list of fields changes for specific tasks, but the basic positions are usually standard.

Assigning Responsibility for Entering Primary Data, as well as Procedures and Deadlines for Entering Primary Data

Depending on the company's staff, responsibilities of interested parties, software used, etc., the optimal combination of responsible persons and procedures is chosen, based on achieving two basic tasks – data reliability and data entry speed.

Codification and Unification of Primary Information

This issue is usually given extremely little attention, meanwhile, its timely solution saves a lot of resources.

A large volume of sales data entered is textual, for example, client names, product names, geographical objects, etc. When forming a primary database, many records appear that are not comparable, although they relate to the same object. The reasons can be inattention (typos), incorrect data in source documents, for example, invoices, as well as staff illiteracy (not everyone knows the composition of all federal districts of the Russian Federation).

To solve such a problem, it is necessary to create internal directories where each item corresponds to a unique code. An example is the well-known codification of subjects of the Russian Federation. Similarly, it is necessary to codify products, clients, etc., including by introducing composite codes.

For example, if we take the product – wine "X", it can have the code

02130804654, where

02 – alcoholic beverages,

13 – wines,

08 – red wines,

04 – dry wines,

654 – "X" 0.75 l. 13%.

As a result, data entry speed increases, and errors when entering primary information are minimized.

Coordination of the Sales Reporting System

Together with interested parties, the list of reporting information, its composition, depth of sales activity parameters, time horizons, as well as the frequency of report preparation and the procedure for their submission to the company's management must be clearly defined.

Usually, the reporting system is related to decision-making procedures in the organization, primarily with the schedule of regular meetings.

So, if weekly meetings are held on Tuesday, then the weekly report should be ready by Monday evening for preliminary review. In addition to weekly reports, monthly, quarterly, and annual reporting periods are often used.

Integration of the Sales Reporting System and Other Management Reporting of the Company (Economic, Financial, etc.)

The optimal option can be considered when all reports are interconnected and prepared jointly within the framework of assigned areas of responsibility. This approach minimizes time costs and increases the level of control.

Selection of Software for Implementing the Reporting System

Such selection is determined by the characteristics of each specific company. It is important that the choice is common for all departments that work with sales analytics. As practice shows, up to an annual revenue of 10 billion rubles, regardless of the average check, using the standard Microsoft Office Excel package is quite suitable. Modern versions of this program have a fairly wide range of functionality in working with databases, including importing and exporting databases in special formats (.csv, .dbf, etc.).

Using Reporting as a Basis for Introducing a Sales Forecasting System

Most companies that have successfully passed the start-up stage sooner or later face the task of sales forecasting. In the absence of reliable analytics on sales history, it is quite difficult to form an accurate forecast, especially in unstable markets or markets with pronounced seasonality.

Forecast forms should be based on the formats of reports for similar periods with the necessary level of detail for production, procurement, and other consumers of such forecast information.

At the same time, algorithms for automatically generating forecasted parameter values based on the available series for the past period can be written, including taking into account special factors such as seasonality. Nevertheless, it is always necessary to leave the opportunity for experts, i.e., salespeople, to adjust the calculated values based on their knowledge of the prospective market dynamics.

When the system is formed, the stage of its "running-in" in working conditions begins. In the process, shortcomings are identified, wishes are formulated, which leads to the refinement of the forms and content of reporting.

The marketer, in turn, gets a good tool for work. Having a complete breakdown of sales, it is easy to calculate the effectiveness of marketing activities, for example, in the field of pricing or promotion. This allows for quick adjustment of hypotheses for working with the market and increasing the effectiveness of the company's commercial activities.

Established analytics are of particular importance for employees associated with the company's product policy. Over long time periods, general patterns of market development are well traced, and the dynamics of the product line, client portfolio, and geographic expansion of the company are visible. Research of these factors in aggregate allows finding growth points for the business and increasing the company's competitiveness in a strategic aspect.

Quality sales analytics are necessary for competent management of both strategic and tactical marketing of the company.