Sales people get all excited when the new figures come out for the month – heck, they’re excited to wade through sales figures for the week. But what can these figures tell you about how to improve sales for the future? Quite a lot, actually. Sales figures indicate where you need to spend marketing dollars, what products are worthwhile, and which salespeople might need training.
Look at Conversion
Conversion is where you should spend most of your time, provided that you have ample sales leads. Conversion ratio will tell you just how effective you are at selling. For example, a conversion ratio of 3 percent might be good in direct response advertising, but it’s horrible in direct sales (in many industries).
A 40 percent closing ratio means that you’re closing 4 out of every 10 people you see – a fantastic result for even seasoned professionals. How do you use conversion rates to help you improve? For starters, every industry has an industry average in regards to sales and closing ratios. If your conversion falls a little below average, it might mean you’re having temporary problems.
If it is consistently below average, however, it might indicate that your sales presentation is not working, that you’re not offering value to your prospects, or that you don’t have a good offer. It can also indicate poor sales leads. Rather than becoming discouraged, you should view low conversion rates as an opportunity to improve on your sales skills.
Look At Total Sales Leads
Total sales leads can help you determine what your potential is. If your closing ratio is 10 percent, and the industry average is 10 percent, yet you only have 100 leads per month to work with, your income is very limited – especially if your product has a long sales cycle or you’re selling a low-ticket item.
All other things being equal, a higher sales lead volume is better than a low one. The more leads, the more opportunities to sell. If your lead volume is low, it tells you that you need better marketing initiatives – as this is where all of your sales leads come from. It doesn’t matter whether you get referral leads, you use telemarketers, or you use direct mail, your system needs to be improved.
What Turnover Can Tell You
Product or inventory turnover tells you more about the quality and value you’re offering than almost any other metric. It also gives you insight as to how your purchasing and overhead is being managed. If turnover is low, yet sales volume is high, it means you’re buying too much inventory.
This could be catastrophic if you sell perishable goods. Even if you don’t, you’re wasting money by allowing excess inventory gather dust on shelves.
How To Spot A Sales Slump
Sales figures can also point to legitimate sales slumps and sort them out from business cycles. For example, if several salesmen are experiencing a “slump,” it’s tempting to blame the economy. However, a close examination of the sales figures will tell you whether you’ve traditionally experienced a slowdown during this time of year.
If some salesmen are seeing low conversion rates, yet historical sales figures show this to be a great time of year, there might be something wrong with marketing, the sales presentation, or your product quality. Knowing this can save you years of frustration and lost sales.
Kurt Smith is a business data analyst. His data analysis is usually used to refine sales and marketing campaigns. The NextDayLenses.com have refined their sales funnel having analyzed their customers buying habits, visit their site to learn more.