Why Sales Tracking Is Important For Your Distribution Business
Do you track sales performance metrics for your company? If not, you may want to consider starting!
Whether you are a small business or a national corporation, tracking has become incredibly important. When looking at companies at large, Forbes reported that you must focus on measuring what truly matters. When it comes to sales, the sales metrics you choose and how closely you monitor them can mean the difference between profit or loss as you transition into the new year.
In this article, we will outline three reasons you should start tracking sales immediately.
3 Reasons You Should Be Tracking Sales
Why is sales tracking important? While the process of tracking sales may seem tedious — it’s a valuable activity. It will help you identify potential patterns, close more deals in less time, and better forecast what products and customers will make the biggest impact in the coming year. Adding a software solution to automate how you process incoming leads, how they are handled and what KPI’s to watch will make the process easier.
Let’s take a closer look at each of the benefits.
Identify Potential Problems
Sales tracking will give you real-time insight into your sales team’s efforts. Because of this, you’ll be able to identify potential problems and remedy them before they become massive issues.
For example, you start looking into your lead to customer conversion rate, and you notice that one of your salespeople is converting fewer leads this month than last. Upon investigation you realize that the sales rep hasn’t prioritized follow-ups or made calls to current customers to offer additional products. In a case-study researched by Invesp, 48% of salespeople never make a single follow-up attempt, while 60% of customers say no four times before converting and saying yes. When you have visibility on where the communication process stopped on a sale, and how many touchpoints were made to attempt a conversion, you can work to improve prospecting behavior.
Whether you’re focusing on which calls are being made, orders due, or the time it takes from lead to sale, sales tracking will help you pinpoint the issue immediately so that you can take steps to “right the ship” as quickly as possible.
Close More Deals In Less Time
When you’re able to easily identify and remove sales process issues, you’ll be able to close more deals in less time. Let’s look at another example:
You notice that one of your reps is converting far fewer leads this month than last month and have found that they’ve started using a new email template to engage with prospects, but it isn’t engaging enough for customers to want to reach out and get more information on deals being offered. With tracking indicators alerting you of the negative engagement, you can start to determine if the issue is related to messaging, or the number of follow-up emails sent out after the previous engagement to entice the sale. You’ll be able to compare the conversion rate of the new template against previous campaigns.
Moving forward, salespeople will be able to view what works to engage with potential leads, A/B test different offers, and showcase additional products the customer may be unaware of in a more effective way and convert them from prospects to customers at a faster rate.
Better Forecast Future Sales
Sales tracking will also help you forecast future sales. When you have your thumb on the pulse of your salespeople, you will know how many leads they contact on a daily, weekly, and monthly basis.
Reviewing information such as:
- Last order date
- Specifics on each product sold
- Order frequency
- Discounts and Pricing
- Customer touchpoints
You will understand the way your team interacts with customers, as well as inventory insights on what products customers are drawn to. This lets you predict how often sales will be made and product trends, as well as giving you insights on opportunities to pitch products to customers outside of standard promotions that they might be interested in.
In Hubspot’s Ultimate Guide to Sales Forecasting, they found that although most salespeople spend 2.5 hours on their own attempting to forecast sales each week, their predictions are typically less than 75% accurate.
Watching beneficial KPI’s lets you forecast product trends and revenue over time and gives you the ability to present a list of target products and prospects to the reps that will drive profit.
Building A Better Distribution Business With Sales Tracking
It is extremely difficult to grow a business without tracking sales.
Fortunately, when you have the right system in place, you can review a lot of these actions and focus on structuring your sales and leads to achieve success. In a study put together by Harvard Business Review, they found that of all the metrics being used to “manage” sales performance, only 17% were Sales Activities, 24% were Business Results, and 59% were Sales Objectives. That means that 83% of all the numbers on all of the sales dashboard are completely unmanageable without a tracking system in place.
When you transition from what has worked in the past and start putting a solution in place to track some of the possible KPI’s tailored to your industry, you can identify potential patterns, monitor and investigate the problem areas, close more deals in less time, and have an easier time forecasting future sales. All of which will help you focus on building better sales practices and drive revenue forward in distribution.