To grow your business, it goes without saying that you’re going to need to increase your revenues. One of the best ways to do this is by analyzing the trends and patterns in your sales data. This kind of analysis can give you valuable insights into how to improve your margins and raise your sales volume. Don’t worry about not having the right tools or training to do it — Microsoft Excel makes it easy to manipulate and visualize data to conduct sales analysis in helpful and enlightening ways.
Four Ways to Analyze Sales Data in Excel
1. Heat Mapping
When you’ve got a large table of numbers in front of you, it can be hard to focus on the figures that really matter. One way to make large sets of raw data tell a clearer story is by using conditional formatting to create heat maps.
Just select the data, open up the conditional formatting menu, and use color scales to assign different colors to the various ranges of value in your data.
2. Pivot Tables
Textual data can be full of useful insights, but extracting them can be difficult when you’re only used to crunching numbers. Pivot tables can help you quantify and report on text-based data.
Let’s say you wanted to know how many of your customers are from a particular city. Create a pivot table, and add the “city” data column to the row labels and value field area of the pivot table. You can then easily sort by the value field and see the count.
3. Weighted Averaging
In sales analysis, not all data is created equal. Some data points carry more weight than others.
Let’s say you wanted to know your average profit per sale. You’d need to calculate the average profit margin of each product weighted by the number of units sold.
Excel doesn’t have a built-in formula for weighted averaging, but with your data sets in columns A and B, this would return the correct figure: =SUMPRODUCT(A1:A10,B1:B10)/SUM(B1:B10).
4. Trend Spotting
Sometimes, simple visualizations can get you to the point much faster than complicated statistical analysis. When you just want to see which direction your numbers are headed in, select the range of data and create a line chart.
Excel is a Sales Analysis Multi-Tool
Whenever you’re in need of a quick and dirty software solution, think about whether Excel can deliver what you’re after. There’s a lot of things Excel can do in a sales department in addition to facilitating analysis.
Don’t let the accounting team have all the fun — every sales team should be conversant in this versatile and powerful program’s capabilities.