Planning, execution and control.
All three of these elements are equally important for ensuring a business’s success.
Unfortunately, a lot of businesses fail to understand it and don’t give reporting all the respect that is due. This, however, is the wrong approach. You can only truly develop your business and have a reliable data-driven strategy when you are fully aware of the outcomes of all the activity taking place within your company.
The first stop on the path to greatness is sales reporting.
What Is a Sales Report?
A sales report, also known as a sales analysis report, is a comprehensive record of all the sales activity taking place within a company over a certain period of time.
Essentially, it provides sales managers with an overview of all the sales processes and operations carried out by the business. It both acts as a reflection of the various trends occurring in the sales volume over a particular time and gives an insight into the different steps of the sales funnel. Moreover, it also contains analytical information regarding the performance of all the sales executives on the team.
There isn’t a strictly defined form that every company needs to follow when creating their sales reports. Depending on the needs and internal workflows of the specific company, the elements included in the report can vary. Nonetheless, traditionally, sales reports consist of the following features:
- The project overview
Before you go into the actual report and cover the details of the tracked period, you need to provide the person reading your report with some background information. After all, you never know who will end up reading your report, so it’s essential to make sure that the information laid out in it is accessible even to the people who have little to no knowledge of your company’s previous sales accomplishments.
The best approach to take here is to include both the objective of the report and a reminder of the accomplishments from previous time periods.
- Data breakdown
Although it’s a great idea to make your reports as detailed as possible so that everyone reading it can better understand your sales processes. Nonetheless, including endless spreadsheets and tables isn’t always the best way to present your data - it’s often inefficient and confusing.
Instead, you should take all the information you have gathered and break it down into smaller, more manageable pieces. Compile it and present it in digestible chunks, with each item showing a singular process or reflecting on a single metric. Don’t forget to clearly identify what each item is measuring and what’s the exact time frame it’s looking at. Then, make sure to explain the possible fluctuation in data and any other additional information that would give your readers a better understanding of the figures in your report.
- Interpretation of results
Once you’ve established your objectives and presented the collected data, it’s time to explain what the data means for your business in the bigger picture. Instead of simply throwing a set of random figures and graphs at your sales report readers, explain what those mean for your company.
For instance, if you’ve just implemented a new strategy and are seeing some fluctuations in the sales figures, you can make a judgement about whether or not the strategy in question was successful. Then, you can go even further and try to identify what exactly led to the fluctuations.
Why Is Sales Reporting Important?
While sales reporting might not be as exciting as other, more creative parts of the sales process, it’s clearly an important part of a successful sales strategy.
The very definition of a sales report suggests that it’s a powerful analytics tool that allows businesses to both evaluate their current sales performance and assess their broader sale strategy. However, there’s more to sales reporting than just that. To better understand the numerous reasons why sales leaders from all over the world put their time and energy into the regular creation of sales reports, let’s have a look at the benefits sales reporting offers:
- It allows you to successfully locate and remove bottlenecks in the sales funnel. It’s not unusual for businesses to hit the stagnation point or even see a decline in sales and, therefore, profit. In fact, all, even the most successful businesses, go through it in their lifetime. The efficient sales managers keep track of all the sales activities taking place within their business, so whenever a decline in sales occurs, they’re able to locate the problem and effectively get rid of it. Having a detailed and intuitive sales report provides you with an opportunity to quickly spot when exactly the issue arose and what could have been the cause of it.
- It helps sales reps to close more deals. Sales reports provide sales managers with context and highlight which processes resulted in which outcomes. In turn, sales managers can put a finger on the exact thing that sales reps could improve to close more deals. They can facilitate training and workshops to boost certain skills and gain more expertise in particular areas that lack those.
- It gives a chance to discover positive trends throughout specific territories. When you have an extensive record of your sales activity, you get to see which leads come from where. This means that you can spot which sources of leads generate the most high-quality leads, and which practices are the most effective for nurturing those and scale them.
- It mitigates the drawbacks of staff turnover. It’s a completely normal thing for larger companies to have high staff turnover rates. People come and go as they discover new opportunities for themselves. However, your employees’ career paths don’t have to negatively affect your company’s sales performance. You don’t want any of your essential sales information to walk out the door with the individual holding as they leave the company. To keep all your data safe and well-organised, you should have a centralised sales reporting system in place.
- It provides the sales team with a better sense of direction and motivates them. While sales reporting can cause your employees to feel closely watched and even overwhelmed, it can also make them more motivated to work harder. When they know there’s a way to track their performance, they will try to hit all the sales targets.
All in all, sales reporting is an extremely important process to have figured out. You need to treat it accordingly and think of all the metrics you need to measure in order to reflect on the sales processes within your business fully and accurately.
The Different Types of Sales Reports
As it has already been mentioned, you are the one who defines the set of metrics to track and, subsequently, decides on the selection of different reports to produce. When coming up with these, you need to pay attention to your specific business processes as well as the capabilities of your sales reporting system. However, if you’re looking for some essentials that are suitable for businesses of all natures and calibres, here are some of the more widespread types of reports that you can include in your sales reporting process.
First, let’s draw a line between two different kinds of reports - you can either look at sales reports or pipeline reports.
The most common sales reports include:
All Deals Won
This report reflects on the number of deals that you have successfully won (including those that are currently at the 100% probability stage) over a certain period of time. It’s considered to be the traditional closed revenue report as you can switch the view from the number of deals won to the amount of revenue generated.
You can use this type of report to analyse how well you’re doing in terms of revenue generation and whether or not you are meeting your sales targets. Moreover, the All Deals Won report is amazing for analysing the effectiveness of different sources of leads. The majority of sales reporting systems allow you to switch to the ‘by sources’ view mode to visually see which sources have most contributed to revenue growth over a given time period.
Traditionally, this type of report is produced monthly, quarterly and/or yearly.
All Deals Lost
This report reflects on the number of deals that were lost by your business over a certain period of time.
So, why is it important to know how many deals were lost over the tracked period of time? There are lots of reasons, the most important one being to understand that your current sales strategy is somewhat flawed and requires immediate attention.
It’s best to look at the All Deals Lost report paired with the previous sales account mentioned, All Deals Won. That way, you can assess the extent of the problem and decide on the next steps to take.
Moreover, you can also see at what point exactly things went south to understand which actions of your sales reps led to the downfall of the deal:
- Poor Follow-up
- Wrong Decision Maker(s)
- Lack of References
- Lack of Expertise
- Lack of Resources, etc.
Just like All Deals Won, All Deals Lost is produced monthly, quarterly and/or yearly.
Won by Sales Rep
Another important type of reports to produce is Won by Sales Rep. These allow you to better understand how each individual sales rep is doing in terms of nurturing leads and closing deals. Once you know where your sales reps stand, you can think about your subsequent strategy.
You can pinpoint the representatives that are doing the best and motivate them to work even harder by giving them a reward. Alternatively, you can single out the sales reps that aren’t closing deals as much as expected, and have a closer look at the obstacles they’re facing.
Progress Towards Sales Goal by Sales Reps
This report goes hand in hand with the previous one and further defines the data presented in it. While the number of deals and the amount of revenue generated from those is important, it’s even more important to understand whether or not your sales reps are meeting their sales targets.
This report provides information about the amount of revenue generated by each sales rep and how it correlates to the planned figure.
Weighted Sales Forecast
Not every sales opportunity results in a closed deal. You need to recognise it and realistically assess your positions so that you could know how much money you’re actually going to generate in the given period. That’s why you need to pay close attention to the weighted sales forecast that refers to identifying the deal value by assigning a probability value to each deal based on where it is in the sales funnel.
The formula used in this type of report is fairly straightforward:
Probability of closing * Deal value = Weighted value
It’s not just sales reports that you need to take into consideration. Pipeline reports are also extremely valuable in the process of sales reporting and can provide you with lots of valuable insights:
- Number of deals at each stage of the pipeline
The contents of this report can be easily deduced from its name. The Number of deals at each stage of the pipeline shows you how many deals you currently have at every stage of the sales process. Knowing this allows you to understand which stages of the sales funnel are the most challenging to convert from, and, therefore, can help you focus on developing more effective strategies for those bottlenecks.
- Amount of money at each stage of the pipeline
In the same way, you want to know the number of deals at each stage of the pipeline, you also want to know how much money those are generating. Usually, to calculate this figure, sales reporting software multiplies the cumulative size of the deals at each stage of the pipeline multiplied by their respective probabilities. That way, you get the most accurate representation of your current and forecasted sales. Not only is this information extremely important for sales planning, but it also allows you to identify the thin areas that require more attention.
- Top Deals in the pipeline
While you definitely do need to treat each customer and lead of yours equally and ensure they both have the best customer experience possible regardless of the size of their deal, it’s only fair to notice that some deals will be more beneficial for your business than others. This means, your sales reps need to put more effort into converting those high-end leads to ensure you meet your sales goals by the end of the given period. This becomes possible with the Top Deals in the pipeline report. It helps to identify the top-10 or top-20 highest value deals that are currently present in your pipeline so that you can pay sufficient attention to them.
There are lots of different things you can control using the powers of sales reporting. Start small, but do start!
Crack the sales formula with CRM Lab
Twice a month, receive actionable CRM content to your inbox.