Profit Based Selling Using Analytics

Historically, sales performance has been measured and reported in terms of total revenue. This is largely because the capture of cost of sale was too complex and the reporting too tedious.

Fortunately, things have changed and using business intelligence tools to capture both transactional and operational input into a single sale, not only can sales performance profitability be reported, but so too product profitability and customer profitability.

This has enabled businesses to become less product focused and more customer focused, finally actioning their promise to be more customer centric.

Having a corporate strategy to drive a minimal 15% margin across all products, unless they have a strategic contribution was easy to say and difficult to measure, let alone deliver.

Using sales analytics, key performance indicators linked directly to such corporate objectives are now possible.

At a glance, the sales manager can determine whether the $20million dollar a year product line has a 20% profit margin or a 2% profit margin.

This has lead the focus away from the ineffecient revenue based selling process to the more logical profit based process, changing not only the way businesses veiw their performance but also in the way processes are structured and decisions made.

Overall, analytics provide a richer, more dimensional view into the business indicating what and who is driving business profitability. This has shocked many new analytics converts, to the extend that some struggled to believe the new insight was in fact true.

Evidence based decisions mean that product lines can be managed by region and market microsegments. It can also reveal which sales tactics used by which sales teams have proven more effective - and more critically, further analysis can reveal why.

The old marketing adage that "marketing is only 50% successful - but we don't know which 50%" is no longer true, not when analytics are employed.

Time wasted debating what is driving sales and profits is no longer as performance drivers become very evident.

The outcome is a more focused selling strategy, timelier tactics and more profitable outcomes.

This capability is available to every sales person - not just managers. Individuals using personal dashboards can track their own productivity and sales performance by account and customer; by product and time period.

This allows sales people to fine tune their pitch to each individual customer - with a massive impact in close rates, cost of sale and thus profitaiblity.

Overall, sales analytics supports a profit-centric business model that is totally aligned with product development, marketing, customer support and corporate objectives.

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Sales Index | Sales Analytics | How SA Works | Benefits | Social Media & CRM