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What Is Sales Analysis and How Does It Help You Close More Deals?

Don't rely on instinct to hit your sales goals. Dig into your data to find a clear path to success.

Jeffrey Steen

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Data and intuition walk into a bar. Data orders a gin martini — strong, reliable, and no-nonsense. Intuition, on the other hand, asks for something off the menu.

Data knows what it wants and orders based on experience, evidence, and time-honored tradition. Intuition isn’t interested in those things. It wants to push the envelope, get creative, and try something new.

Your team might be filled with intuitive sellers. But to hit your sales goals, there’s nothing stronger than data. That’s why sales analysis is so important. When you pair your instincts with real data, your reps can make evidence-based decisions and steer clear of guesswork.

Research from McKinsey shows that companies using data analytics to drive their sales processes have seen lead conversion rates soar up to 30%. We’ll break down how you can achieve the same success.

What you’ll learn :

What is sales analysis, the benefits of sales analysis, key sales metrics to watch, what to look for in a sales analysis tool, hit key kpis with real-time pipeline insights.

What could you do with relevant insights at your fingertips? Sell smarter, take action, and hit your forecasts. That’s how Sales Analytics works.

Sales analysis is the process of gathering and “dissecting” sales data to uncover trends and patterns in your sales team’s performance and your customer behaviors. For example, you might see patterns in product performance, customer purchasing patterns, or the effectiveness of your sales channels. This meticulous attention to detail helps sales leaders identify areas where they can enhance forecasting accuracy, boost team performance, and speed up internal processes.

For example, recognizing inefficiencies in the sales process could lead to targeted interventions, such as refining your approach to lead qualification or improving follow-up tactics, directly impacting sales effectiveness.

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Sales analysis is key to honing your sales strategy , providing a clear picture of where your efforts are paying off and where they’re not. It’s about increasing your team’s productivity by identifying the most efficient sales practices, and highlighting areas that aren’t working and need improvement. On the customer side of the equation, sales analysis can help you prioritize prospects most likely to close, ensuring resources are allocated effectively.

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Depending on your goals, there are different ways to slice and dice the sales data you can analyze for actionable insights. Below are the most common sales metrics and KPIs that sales teams analyze to understand performance and opportunity:

Pipeline metrics

These metrics, like how quickly a lead moves through the pipeline and how many leads are in the pipeline at any given time, offer a view of how successfully a rep is selling. It can reveal obstacles that cause deals to stall and help you manage rep workload to ensure they have enough — but not too much — to focus on.

Conversion rates

A critical measure for both sales reps and managers, conversion rates show you the rate at which leads are moved from one stage in the sales process to another. By analyzing these rates, sales reps can refine their approaches to improve actions in specific stages. For example, a rep may choose to add follow-up emails after the sales call stage to ensure prospective buyers remain engaged.

Average deal size

This metric provides insight into the typical value generated per sale. Ultimately, this guides sales managers in strategic planning, setting revenue targets , and identifying lucrative market segments for focused engagement.

Average sales cycle length

Used to assess the efficiency of the sales process, this metric helps in identifying bottlenecks that lengthen the cycle. Shortening the sales cycle through faster lead qualification and engagement tactics in various sales process stages can significantly impact overall sales performance.

Won and lost deals

Comparing won and lost deals reveals patterns and areas for improvement in sales strategies. This analysis is invaluable for enhancing onboarding and training programs and refining sales tactics to increase future success rates.

Customer churn

This metric pinpoints when and why customers leave your business and opens the door for conversations and ideas about how to improve retention rates. Are there common times when customers leave, or triggers that seem to push them out the door? How can you fix these?

Sales call feedback

Sales reps primarily use this metric to assess their call performance. Managers can also use it to coach reps on effective communication techniques and call strategies. Additionally, they can find insights to praise or discourage certain techniques during performance review conversations.

Lead response time

Your lead response time is the amount of time it takes for reps to follow up with potential clients after they first contact your company.

Forbes cited the average lead response time as 47 hours and notes that those who reach out within five minutes are 100+ times more likely to see success than those who wait even 30 minutes. Ultimately, understanding this metric can help sales reps become more proactive about reaching out to leads.

Annual revenue

A comprehensive metric that reflects the overall financial health of the business, annual revenue is crucial for strategic planning and growth projections. It provides a broad view of the company’s success and areas for future expansion.

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Sales analysis tools help you turn raw data into actionable insights. They not only simplify the process of gathering and analyzing sales information, but they also give you a complete view of your sales performance. To improve your sales analysis, look for tools with this functionality:

Easy-to-use customer relationship management (CRM) capabilities

CRMs manage sales data of all kinds in one place: customer interaction, sales activities, and overall performance. For example, without a CRM, you might miss key information like customer behavior patterns, such as when potential customers typically drop out of the sales cycle or which channels engage customers the most effectively.

A CRM that balances advanced features (like AI and automation) with an intuitive interface empowers your team to excel without unnecessary complexity. This ease of use is crucial for ensuring that the tool becomes an integral part of your daily operations. For maximum impact, it should facilitate seamless management of customer relationships and sales data analysis.

AI-powered insights

Many advanced CRM systems now incorporate AI for a deeper, more nuanced analysis. For example, AI can use data to identify which potential customers are most likely to purchase based on analysis of past deal behaviors and customer trends, so teams can create more targeted sales strategies.

Here’s an example: AI surfaces an insight showing female customers from the Midwest between the ages of 18 and 35 prefer a particular brand and flavor of soda. Sales teams can use this information to focus their efforts on this region with tailored promotions and personalized communication to this demographic via social media.

Visualization

Embedded in CRM systems, dashboard creation tools provide visual summaries of sales metrics, often in real-time. They highlight vital data like leads in pipe, conversion rates, and customer engagement levels. They can also flag problem areas. For example, a dashboard might reveal that many deals are stalled at the negotiation stage. This allows you to address the issue by refining negotiation tactics or adjusting pricing to start moving more deals forward.

Automation capabilities

Now often found built into CRMs, automation helps simplify tasks like record updates, report generation, and other admin duties. Automation not only brings consistency and efficiency to routine processes, but it frees up reps’ time to focus on relationship-building.

Predictive analytics

Using historical sales data, predictive analytics can forecast future trends . These forecasts are instrumental in preparing for market shifts or changes in customer behavior. For example, if analytics reveal that certain customers tend to upgrade their services at the end of the fiscal year, sales reps can proactively time their outreach. Then, they can tailor their conversations to offer upgrades or additional features around that period.

Take action with insights from sales analysis

Sales analysis digs into data for insights and strategies. It’s about finding what works based on solid evidence. When blended with a seller’s instinct and human intuition, sales teams can make informed decisions while testing new strategies and recipes to drive sales success.

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As a business and marketing writer for 15 years, Jeffrey specializes in skill-up content at Salesforce. His work touches on everything from sales fundamentals to employee coaching, leadership best practices, and growth strategies.

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How to Perform a Sales Analysis (Step-by-Step): Methods & Metrics

Want to achieve your sales goals? Then you have to kiss guesswork and intuition goodbye. Instead, get cozy with regular sales analysis to generate cold, hard data for your team.

Of course, wanting to go steady with data and actually making it happen are two different things. To make it a reality, you have to know what sales analysis is, why it's so beneficial to sales teams like yours, and how to analyze sales metrics and KPIs for your sales strategy .

Keep reading to learn everything you need to know about sales data analysis. That way you can boost performance —for you and your team—and capture that elusive jena se qua that will turn your competitors green with envy. Let's do this!

What Is Sales Analysis?

It's pretty simple: sales analysis is what happens when sales professionals monitor sales data, in order to evaluate sales team performance. Doing so can uncover insights about:

• Top-performing products/services
• Underperforming products/services
• Customer behavior and retention
• New sales and market opportunities
• The future outlook of your sales team

When done right, sales analysis can help you run a more efficient and effective sales department now and in the future .

Curious about total contract value ? Hey there, our article holds the answers.

How Often Should You Perform a Sales Analysis?

Worried you'll come off too strong? You definitely don't want to look desperate. How much is too much? Luckily, the quickest way to sales analysis' heart is to spend quality time with it.

In other words, check in on a regular basis. How regular? It depends on the sales metrics you need to track, overall performance, and the type of sales reports you're analyzing.

Your sales goals can also impact how often you should perform sales analysis.

In general, expect to track overarching metrics like net sales and/or deal size on a monthly basis . More specific metrics, like calls or emails sent, should be tracked on a shorter-term basis. Whatever your cadence, remember to monitor seasonal changes and YoY metrics, too.

What is Included in a Sales Analysis?

Better said: what isn't included in a sales analysis?

In the end, what you decide to include in your sales analysis report will depend on your goals. Here are some ideas:

• Sales activity volume
• Ratio of new leads to qualified leads
• Information about your pricing structure
• Data on your social media campaigns
• Current sales trends
• Revenue and costs for a specific period

Along with these things, a clear sales data analytics report will show you want to do with the information. Specific action steps are a key piece of sales analysis, meaning you can do more with the information you've gathered. Moreover, explore Google sheets alternatives that may better suit your sales analytics needs, providing enhanced functionalities for improved data management.

What is Sales Analysis Useful For? 4 Irresistible Benefits

Why should sales managers get serious about sales analysis? Two words: the benefits!

Seriously, if you want to see how your team performs against its sales goals—throughout the entire sales cycle—you need to monitor the specific metrics that pertain to them.

They may have unmet demands that will streamline your business processes and benefit you in the long run, including outsourcing needs that cover 3PL warehouse management , manufacturing, offshore or onshore, etc. This is one of the reasons why those metrics must be monitored.

Once you do, you'll be able to make better decisions, understand market trends, boost company profits, and improve customer satisfaction. Let's take a closer look:

• Make better decisions: Sales analysis will reveal the real-time success of your sales plan . You can use this information to build a better, data-driven approach.
• Understand market trends: It doesn't matter what you're doing—launching a new product, planning inventory , etc. A sales analysis report will help you uncover hot market opportunities and must-know trends to make the most of your efforts.
• Boost company profits: Top sales reps spend more time talking to high-quality leads. Sales analysis will help you identify the best prospects so that your team can close more deals. It will also reveal information regarding your non-customers, which can be used to sharpen your sales pitch and personalize future marketing strategies .
• Improve customer satisfaction: Finally, sales analysis will help you understand what customers want and why they buy. These details can be used to forge deeper bonds with your target audience that lead to more upsell and cross-sell opportunities.

Does the idea of sales analysis have you hot and bothered? Great! Now I'll show you a proven, four-step process you can use to analyze the metrics and KPIs that matter to you.

How to Perform Sales Analysis: A 4-Step Process

You're ready to take the plunge and generate your sales analysis report—but how? Follow this four-step process, and you'll have sales analysis wrapped around your finger in no time!

Step 1: Choose the Right Sales Analysis Method

Different sales analysis methods will allow you to generate different kinds of reports. So, before you do anything else, choose a method that aligns with your sales goals.

Here are seven specific sales analysis reports you need to know about:

• Sales trend analysis: This type of sales analysis looks for patterns in sales data. Use it to track your team's progress towards its sales goals, while simultaneously understanding sales patterns in specific products, customers, and/or geographies.
• Sales performance analysis: Sales performance analysis is crucial for effective sales performance management . This type of analysis will help you gauge your sales team's performance and evaluate the overall effectiveness of your sales strategy. Utilize it to compare actual results to expected outcomes, and then make necessary adjustments. Implementing these changes can lead to faster closing times, increased win rates, and a significant boost in revenue growth. (Dive into the world of CRM and its pivotal role in driving revenue growth .)
• Predictive sales analysis: This type of sales analysis is designed to help you predict future risks and opportunities. Use it to create accurate sales forecasts.
• Sales pipeline analysis: This type of sales analysis will help you discover common sales activities prospects go through before they convert. As such, it will give your sales team the context it needs to shorten sales cycles and close more deals.

• Product sales analysis: This type of sales analysis is perfect for large companies and/or companies with extensive product offerings. Why? Because it helps them determine which products actually affect their bottom lines. Use it to better understand your company's demographics, pinpoint popular products, and the like.
• Prescriptive analysis: This type of sales analysis will empower your sales reps with knowledge, helping them determine which opportunities to pursue and which to dump like radioactive waste. Use it to increase rep success and team-wide win rates.
• Market research: This type of sales analysis may seem old-fashioned, but it's never gone out of style. To use this technique, simply survey your customers, research your competitors through web scraping (a technique that automates the process of extracting data from a website ) using curl proxy for greater efficiency and reliability, and read general sales statistics. Once you do, you'll have a much better understanding of your customer's needs , thereby improving your sales effectiveness.

Step 2: Identify the Specific Information You Need

You've chosen the perfect sales analysis method. It just seems to get you and the sales goals you want to achieve. Congratulations! But your work is far from over…

Now you need to identify the specific bits of information that you need. For example, you might want to measure the impact of your sales training efforts. Or find the top-selling product from a recent marketing campaign. Or determine similarities between repeat customers.

When you know what information you need, you can choose metrics and KPIs that will help you acquire, track, and measure it. We'll talk about this a bit more in the next section.

Before we get there, though, we need to talk about timing—as in, what time frames should you collect data for? The answer to that question will depend on the metrics you're tracking, but weekly, monthly, quarterly, and yearly time periods are pretty common.

Just remember, consistency is essential, regardless of which metrics you decide to monitor. With that in mind, plan to conduct analysis more frequently during special promotions.

Step 3: Choose a Sales Analysis Tool and Analyze Your Data

Your sales analysis efforts are going strong! To keep them that way, invest in an analytics tool to help you get the most out of every metric you decide to track. Here are a few ideas:

• Spreadsheets: You gotta love the classics, right? A spreadsheet tool like Microsoft Excel can help you analyze and interpret your sales data. Just make sure that you have sufficient quantity and quality of data before you get started. If you don't, you won't be able to make informed decisions that propel your company forward. (Note: sidle on up to these report templates to make spreadsheet reporting way easier!)
• CRM software: Every sales organization needs a CRM. How else will you store contact information, automate email sequences, and view sales pipelines from one sales dashboard? Newsflash: your CRM tool can also be used for sales analysis. If you use Close , for example, you can easily generate reports for any metric or KPI, including detailed pipeline and funnel reports, which will help you with sales forecasting .
• Sales analytics apps: Some tools are completely dedicated to sales analysis. Chorus.ai , for example, will help you analyze sales calls and pinpoint areas of improvement. Gong.io will help you report on customer interactions and forecast future sales. And Seismic will help you calculate the effect of your sales enablement efforts.

At the end of the day, choose the sales analysis tool to help you accomplish your goals. Look for substance, not style. We all know you'll make better business decisions with the right data analytics tools in your toolbox.

Step 4: Share Your Results with Relevant Stakeholders

Last but not least, you need to present your sales data analysis to key stakeholders.

Unless you’re asked to share the process by which you arrived at your results, only show the main findings. You can use graphs and visuals to help your audience interpret the data. Additionally, employing tools like the revenue growth calculator can be instrumental in visualizing and comprehending complex sales data effectively.

For example: If you lead a sales team and want to share information regarding sales team performance with your CEO, you might want to include charts around your sales goals, your best-selling products, and the revenue and expenses of your team.

Overall, your sales analysis presentations should share actionable insights and be easy to understand. End with recommendations to help accomplish this goal.

Seeking sales excellence? Discover the power of challenger selling strategies .

Choosing the Sales Analysis Metrics and KPIs That Matter

At this point, you know exactly how to perform an in-depth sales analysis—just follow the four-step process above. Now you need to choose a few KPIs to monitor.

Here are 10 metrics you'll probably end up tracking at some point. This is definitely not an exhaustive list of KPIs. If you want that, check out this article when you're done with this one.

1. Monthly Sales Growth

This metric will give you the juicy deets on your overall sales revenue. Is it going up, going down, or holding steady? When you know, you can better optimize your sales processes.

2. Sales Opportunities

This KPI will tell you about the opportunities your sales reps create. It can be used to determine good and bad-fit prospects, which makes it useful for sales prospecting.

3. Lead Conversion Rate

This metric will help you understand why and how leads are converted . This information can then be used to design a foolproof customer acquisition plan for your company.

4. Average Conversion Time

This KPI is all about productivity. Track it to determine how long it takes for leads to convert into paying customers. You can also combine it with other metrics, like lead conversion rate and total sales opportunities, for a handy bird’s eye view of your company's sales pipeline.

5. Monthly Onboarding and Demo Calls Booked

This metric will help you understand the health of your sales funnel. Why? Because prospects that make it to the demo and/or onboarding stages of your funnel are likely to convert.

6. Pipeline Value

This KPI will tell you the amount of revenue you can expect to generate from the sales opportunities in your department's pipeline, within a specific time frame.

7. Sales Targets

This metric will share historical data regarding team performance. Want to know the amount of revenue generated or the number of product subscriptions sold? This metric will help.

8. Customer Lifetime Value (CLV)

This is an extremely popular KPI —with good reason. Track it to learn how much revenue the average customer generates for your company during their lifetime, based on the average deal size and how long your customers stay with you. Then use it to predict future revenue, make informed decisions about customer acquisition , etc..

9. Calls and Emails Per Rep

This metric will tell you how many calls and emails your sales team makes every day, week, and month. It can be used to evaluate productivity and to identify broken sales funnels.

Want to amplify your sales results? Dive into our comprehensive guide on the best sales productivity tools available.

10. New and Expansion Monthly Recurring Revenue (MRR)

These are important metrics for SaaS companies because they tell them how much revenue they generated this month, compared to last month. Brands can then use this information to determine the effectiveness of their sales and marketing teams, and help minimize churn.

How to calculate these two metrics:

Fall in Love with Sales Analysis

Sales analysis reports create accountability, reveal insights about one's customer base , the specific traits top-performing sales reps have… Honestly, they have the power to revolutionize your entire sales and decision-making processes, which is why they deserve your unending love and devotion.

The question is, which tool will you use to generate said reports? Here's my advice: choose Close. Our top-rated CRM platform has all the tools you need to create custom reports and monitor specific KPIs. Even better, you can try before you buy with this 14-day free trial .

That's right, I'm not asking you to put a ring on our hand just yet. Take us out on a date, see what we have to offer, then decide if you want to spend the rest of your life with us. (Or at least the rest of your sales career .) Something tells me we're a match made in heaven!

I want to try Close for free for 14 days . (Just say YES!!!)

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What Is Sales Analytics and How Does It Benefit My Business?

Get more information about sales analytics. Read this guide to find out what sales analytics can do for your business.

If your business relies on selling products or services, you may benefit from learning more about sales analytics. Discover the different types of sales analytics, how they might help your business, how to make a sales analytics plan, and more.

What is sales analytics? 

You can use sales analytics software to gain information about customers, their buying habits, product or service performance, sales trends, and more when selling products or services. Tracking this information might help you improve your products or services, enhance marketing and other sales methods, boost company efficiency, and predict future sales and revenue. 

Who uses sales analytics?

Sales-oriented businesses rely on sales analytics to gain valuable information. Company employees that use sales analytics include the marketing team, the sales team, the people who manage them, and company stakeholders.

Important sales metrics to track

Before exploring different types of sales analytics, you may want to identify which sales metrics you want to track. Some standard sales metrics companies track include:

Sales targets: Goals set for sales

Monthly sales growth: How much sales rise or fall each month

Lead conversion rate: Rate at which leads convert to paying customers 

Sales by region: Measure of sales within a particular geographical area

Sales per rep: Measure of sales made by each representative

Sales per product/service: Measure of sales of each product or service

Sales by contact method: Measure of sales made using a particular prospecting method (cold call, warm call, email, etc.)

Sell-through rate: Percentage of inventory sold versus received in a given period

Different types of sales analytics

Knowing how sales analytics differ can help determine which might benefit your company. Explore several different types.

Diagnostic analytics

Diagnostic analysis allows you to understand the reasons behind a particular event. Examples of events you could examine include why a product didn't sell well during a specific month or the relationship between lower sales and a new competitor opening nearby.

To get to the cause of an event, diagnostic analysis involves various techniques, including:

Hypothesis testing: The process of testing an assumption

Correlation: Examining the directional relationship between two or more variables

Regression analysis: The use of statistical methods to determine a relationship between two or more variables

Market data analytics

Market research offers an abundance of helpful information. It can tell you how current or potential customers view your company and how you compare to your competition. It can also tell you where to find potential customers, whether to launch a particular product or service and how to improve your product promotion or packaging.

Types of marketing data worth analyzing include:

Customer data: Demographics, geographic location, interests

Customer satisfaction data: Results of surveys, satisfaction ratings, and other feedback

Market campaign data: Effectiveness of a particular campaign

Sales and purchasing data: Amount of sales, who buys your products or services, what days or times of day do you make the most sales

Sales performance analytics

You can learn a good deal from accessing and analyzing sales performance data. You might discover:

What products or services are more popular than others

Where your sales team or sales processes may need improvement

Where you may need to make pricing changes

How to improve customer service

Sales trend analytics 

Sales trend analysis allows you to detect patterns in various types of sales data. Some trends you can examine include:

Conversions (when leads convert to paying customers)

Sales of specific products or services

Total sales

Predictive sales analytics

Analysis of past and current sales data helps you predict future sales. The ability to make more accurate sale predictions can help you:

Plan your budget

Narrow your target market

Improve your customer messaging

Reduce risk when launching new products or services

Meet product demand

Boost investor confidence

Key benefits of sales analytics

Collecting and analyzing sales data can benefit your company in various ways. Read on to explore a few of the key advantages.

Pinpoints strengths and weaknesses

By clearly identifying areas that need improvement and areas that don't, sales analytics can help companies run more efficiently. For instance, you can use sales analytics to quickly examine the amount of sales per representative to determine a need for extra training or a well-deserved promotion. Sales analytics also helps identify problems with certain products or services and may help improve the sales process.

Improves decision making

Sales data analysis provides companies with factual information about customers, purchasing behaviors, marketing strategies, and more. This information allows company managers and stakeholders to make better decisions more quickly. 

Identifies sales trends

Identifying sales trends can help you narrow your target market and improve sales. For instance, sales analytics might show that you're making most of your sales to a specific age group or customers in a particular geographical region. You can use this information to narrow your target market and boost sales.

Saves money

Sales analytics can help companies save money by offering valuable information. Examples might include:

Learning about strengths and weaknesses in marketing messaging

Discovering which products bring in the most sales

Identifying what prices generate the most sales

Learning about each agent's sales performance over some time

How to make a sales analytics plan in 6 steps

To use sales analytics effectively, it helps to have a plan. Get started using these six steps for reference. 

Decide what information you need.

Identify the sales analytics tools and methods to use.

Collect your data.

Analyze your data.

Share the information with company stakeholders.

Use your results to make improvements.

Getting started on Coursera

It might help to have a general understanding of data analysis for deploying effective sales analytics. Consider taking the Introduction to Data Analytics course offered by IBM on Coursera. You'll discover what data analysts do and what kinds of tools they use. You'll learn about data gathering, cleaning, analysis, and sharing and become familiar with terminology like data ecosystem, data lake, and data pipeline. At the end of the course, you'll apply what you've learned by performing a series of data analysis tasks, and you'll receive a Professional Certificate to display in your office or share on your professional social media profile or resume.

Keep reading

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Coursera’s editorial team is comprised of highly experienced professional editors, writers, and fact...

This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.

10 Important Sales Analysis Reports [+ 4 Sales Report Templates]

Published: October 28, 2022

Are you finding it difficult to hit your sales goals , unclog your sales funnel , and increase your sales velocity ? Sales reports can help.

Sales reports allow you to improve your sales process, fill knowledge gaps, and hit your quotas consistently. As a sales manager, creating a sales report also allows you to gather hard data for your colleagues or C-suite to make informed decisions quickly.

In this post, you’ll learn what sales reports are, their benefits, and how to use sales report templates.

What is a sales report?

• Benefits of Sales Reporting

How to Write a Sales Report

Types of sales analysis reports, sales report templates.

A sales report or sales analysis report is a document that shows trends impacting your sales operations within a specific period. While the content of sales reports may vary depending on your goal, they include metrics like revenue, accounts won, leads, and more. Insights from these reports help you identify the strengths and weaknesses of your sales strategy.

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A free, interactive template to calculate your sales KPIs.

• Average Deal Size
• Customer Acquisition Cost (CAC)
• Customer Lifetime Value (CLV)

You're all set!

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The Benefits of Sales Reporting

Reporting data in a standardized way is crucial to the success of your business. Here are the common benefits of developing a sales reporting cadence.

Improving Team and Reps Performance

Sales reports provide data-driven insights about the sales performance of individual reps and your entire team. This allows you to know if underperforming reps need coaching. You can also identify who would benefit from regular one-on-one meetings to level up and hit their quotas.

The same applies to your team. If your team isn’t hitting the company’s revenue goals, you can use sales reports to find gaps to improve your sales process .

Assisting Fast Decision-making

Making informed and timely decisions is vital to the success of any sales strategy . This is where sales reporting shines.

With regular sales reporting, your C-suite or managers can quickly iterate on what drives the company's growth. You can also track and adjust sales tactics that are performing below par.

Boosting the Morale of Your Sales Team.

Creating daily sales reports may be time-consuming. But whether you do this daily, weekly, or monthly, these reports can take team morale to new heights.

Monitoring and showing the sales performance of each team member motivates them to do more. Gamifying performance results can challenge other team members to quit settling for average performance. Put another way, sales reporting can create healthy competition and push your sales team to aim for the “best” outcomes.

The goal of every sales report is to pass actionable and detailed sales information to your team. To do this, you need to know the purpose and audience of your sales report. You’ll also need to use the right data, decide on a reporting timeframe, and create engaging slides.

Here’s a breakdown of how to write an engaging sales report.

1. Know the purpose of your sales report.

Identifying your goal is the first step toward creating a winning sales report. With your goal in mind, you can easily determine the best data to include and decide on a reporting timeframe.

2. Tailor your sales report to your audience.

Metrics that interest your sales reps may not interest your CEO. Those that interest your CEO may not interest your director or VP of marketing. These folks are in the same organization as you, but they have different interests.

Sales reps may want granular details on their sales performance. Your marketing lead may only be interested in the sales reports from marketing campaigns. And your busy CEO may only want the overall results of your marketing and sales activities without the specifics of how you reached your goals. See, different strokes for different people. Tailor your sales report accordingly.

3. Determine your sales reporting timeframe.

Your reporting timeframe depends on your sales objectives and how frequently you need to update your team or management. You can do this in three ways.

Daily Sales Reporting

A daily sales report tracks the sales activities of each business day. This report increases your rep’s accountability, encourages productivity, and includes sales performance metrics like:

• Duration of each outbound call.
• Number of sales opportunities.
• Number of outbound calls.
• Number of proposals sent.
• Number of emails sent.

Weekly Sales Reporting

A weekly sales report measures the weekly sales performance of individual reps and your entire sales team. This report allows sales leaders to know which reps are on track to hit their KPIs. Weekly sales reports track metrics like:

• Call/contact volume.
• Lead-to-opportunity ratio.
• Lead conversion ratio.
• Number of appointments set.
• Number of closed deals.
• Sales volume by channel.
• Total sales by region.

Monthly Sales Reporting

A monthly sales report summarizes your sales performance for the month. This report helps you determine the effectiveness of your sales strategy so you can tweak it if necessary. Monthly sales reports track metrics like:

• Number of deals at each stage of the pipeline.
• Number of scheduled meetings.
• Length of the sales cycle.
• Average close rate.
• Average deal size.
• Sales volume.

4. Get your sales data.

Collecting and analyzing your sales data is a lot easier when you’re using a CRM. With a CRM, you can use filters to remove duplicate records and pull specific information. That’s more fun than relying on clunky spreadsheets, right? Here’s a quick video on how you can gather sales data for your reports.

You can also create custom reports if you regularly use certain sales data. Here’s how:

5. Explain key insights from your sales data.

You need to make sense of your sales data by explaining the “why” of each one.

• If there was a dip in the close rate, why?
• If there was a high lead conversion ratio, why?
• If there are more won deals in a specific region, why?

Just as the questions are endless, so are the insights you can gain by evaluating your sales data. For instance, more won deals could have resulted from a new tactic your team tried, a new channel they started using, a partner ecosystem they joined, and much more.

When you state why there’s an upward or downward trend in your data, you provide a roadmap for what your team can improve and what they can continue doing to achieve the best sales results.

Note: If possible attribute which changes to your sales data were caused by team tactics and which are attributed to the larger macro-economic environment. A spike or dip in sales may be the result of factors beyond your control. You’ll want to distinguish those factors where possible.

6. Use visuals to show vital sales trends and metrics.

Remember the popular saying, “A picture is worth a thousand words?”

It’s true, especially with sales reporting. When you create attractive visuals, your audience won’t have to wade through spreadsheets with lots of numbers. This saves their time and allows you to quickly communicate the insights in your report.

The best part? You can generate engaging visuals directly on HubSpot . Think pie charts, bar charts, line charts, and more.

Having dedicated technology to track lead and customer data makes it easy for sales leaders to analyze team performance and identify areas for improvement. But what are some essential reports every sales leader needs to track? We've listed some of the most important ones below.

• Sales Pipeline Report
• Conversion Rates Report
• Average Deal Size Report
• Average Sales Cycle Length Report
• Marketing Collateral Usage Report
• Won and Lost Deals Analysis Report
• Churned Customers Report
• Sales Call Report
• Lead Response Time Report
• Revenue Report

1. Sales Pipeline Report

A complete and accurate pipeline is a must-have. Without one, you can’t assess the sales health of your company. As a sales leader, you need to know the deals that are likely to get closed, those that may not, and how much of an impact each deal has on your bottom line.

To accurately forecast these, ensure your reps are doing their due diligence to guarantee a realistic sales pipeline .

This is an example of what a pipeline report looks like in HubSpot Sales Hub. You’ll notice each stage of the pipeline and where opportunities are within it. You can even add forecasted deal amounts to see the worth of each deal and its proximity to closing.

Image Source

Understanding the sales pipeline stages where your team excels and needs help. You can also identify the specific actions your reps should take to move prospects through each stage of your pipeline, the number of prospects in the pipeline, and how close your team is getting to their targets.

2. Conversion Rates Report

Conversion rate measures the ability of your team to turn prospects into leads and leads into customers.

By monitoring your conversion rate, you can identify where your team excels or underperforms in the sales lifecycle. If your team consistently has a high conversion rate of turning leads into opportunities, you can scale the strategies that are already working. Otherwise, you can start finding areas for improvement.

This report is also a litmus test for the strengths and weaknesses of individual reps. If a rep is performing below par, looking into their conversion rate helps you uncover why.

Revealing the efficacy of your overall sales strategy on an operational or team-wide scale. It also measures the effectiveness of your sales team at converting leads into customers.

3. Average Deal Size Report

Your average deal size helps in predicting revenue. For instance, if your revenue target is $200k per quarter and your average deal size is $20k, it means you have to land 10 deals to hit your quarterly target.

The average deal size report provides the basis for your reps' quotas and lets them know how many deals they're expected to land. It also allows you to set expectations and milestones for your sales cycle. Ultimately, it might seem like a no-brainer, but it's still worth a reminder — always monitor your average deal size because it’s vital to your sales operations.

Setting expectations for each rep, creating weekly and monthly milestones, tracking the performance of each rep, and gauging the overall success of your company’s sales strategy.

4. Average Sales Cycle Length Report

Average sales cycle length is the average time it takes a rep to close a sale. This metric shows the sales performance of individual reps and the overall efficacy of your sales process.

When considering the metric, establish an ideal timeframe to use as a benchmark. One of those benchmarks is how long it takes a rep to work through your sales cycle . If you find some reps with much longer sales cycles compared to their peers, you can evaluate their efforts and identify areas for coaching.

If all your reps can’t keep pace with your target average sales cycle length, then it's probably time to take an objective look at your operations. You might find flaws in your approach, training, or management style, and these insights can help you fix the issues. To enable your reps to see how they're performing with real-time visualization dashboards, tools like Datapine can help.

Knowing if your reps are closing deals at a similar rate as their peers. You can also create contests to foster healthy competition and unify your team to work towards a common goal.

5. Marketing Collateral Usage Report

Marketing teams expect sales reps to put the collateral they create to good use. This helps the sales reps to move prospects through the sales process quickly.

That said, some marketing collateral may be irrelevant to your rep’s prospects. With this report, you’ll know which marketing content works. Communicating this information to your marketing team gives them the insights they need to create more useful content.

Sales enablement platform SoloFire tracks how many people have used a piece of collateral, how many times they’ve interacted with it, and for how long.

Determining which marketing collateral gets the most traction with prospects and collateral that could use a refresh.

6. Won and Lost Deals Analysis Report

To understand the state of your business, you shouldn’t track only deals in progress. You should track deals you win and lose.

Perhaps prospects go crazy for specific features that you offer. Or, you notice that there’s a preference for a competitor’s product. Both trends provide an overall picture of your product’s overall strengths and weaknesses.

This is also a good way to spot under- and over-performers. For example, two reps who have the same average quota attainment could both appear to be stellar but differ wildly in actual performance.

If your data reveals that one rep spends a lot of time helping others get deals across the finish line while still maintaining high attainment, you have a great manager candidate on your hands.

On the flip side, records could reveal that a second rep has the same attainment as the first, but relies on other teammates to run demos or closing calls.

There’s always a story behind the numbers. Analyzing won and lost deals by rep will reveal it.

Evaluating performance against variables like company size, product type, sales reps, and sales teams.

7. Churned Customers Report

Every company will always experience customer churn . However, churn rates higher than your company or industry average can reveal larger problems.

There might be an issue with your pricing, service, product quality, product features, or delivery. You may also identify misalignment during the sales process, or some other aspect of the customer experience.

If your report shows higher than normal churn, speak to your customers to understand their challenges and fix them. This can improve your customer retention rate and overall customer experience.

Closely monitoring trends in churned customers so you empower your team to fix bad patterns throughout the sales process.

8. Sales Call Report

One way to measure the effectiveness of your sales reps is to track the number of calls or visits they make to prospects. You can use this report to track and find gaps in the close rate of your team.

Ideally, you want your reps to close a healthy number of deals compared to the number of prospects they meet with. If they meet with ten per day, but close none, this report will allow you to understand why and propose better closing techniques. If the opposite is true, you can find what’s working and share those tactics with the team.

The sales call report can also help you segment data. For example, if a certain industry is responding well to your products and services, you could advise your team to narrow down their call list. You can then prioritize the highest converting segment.

Identifying the most effective tactics for closing deals, setting daily call benchmarks for new hires, and iterating on your sales closing techniques.

9. Lead Response Time Report

Regardless of the length of your sales cycle, lead response time should be relatively quick. Studies show contacting prospects within the first five minutes after they become a lead increases their likelihood of converting into an opportunity.

Five minutes is short, and if you’re far from meeting this time, the best thing to do is track your progress. You won’t move from a 48-hour lead response time to five minutes overnight. But by making strategic decisions and prioritizing your team’s workload , you can attain this goal.

Here’s how a lead response time report looks in HubSpot.

Measuring the average time it takes sales reps to follow up with a lead. Plus, you can compare this metric to industry benchmarks.

10. Revenue Report

As a nice complement to the average deal size report, a revenue report can help you and your reps see how their work impacts the bottom line.

Seeing a breakdown of new business and renewals, as well as the reps who contributed to each. To get the most out of this report, you’ll want to first set your sales and revenue goals .

Many sales teams focus on identifying potential clients and closing deals, leaving little time for detailed reporting. The good news is that your team can use several powerful templates to expedite your sales reporting.

Here are four sales reporting templates we recommend.

1. Forecasted vs. Actual Sales Report Template

A forecasted vs. actual sales report can help your salespeople compare their progress against monthly and quarterly goals. These reports provide a quick way to analyze sales numbers and make adjustments as necessary.

For instance, this free sales report template from HubSpot allows you to track deals in your pipeline, know which ones to prioritize, and helps you hit your quota.

2. Reasons for Lost Deal Report Template

While every sales team strives to close as many deals as possible, some customers will inevitably say no. Understanding why your reps lose deals provides insight into why potential clients go elsewhere.

When creating this report template , you’ll want to add a column or prompt to your current sales pipeline. This allows salespeople to choose why your team lost the deal. Here are a few reasons to include in your lost deal report:

• Losing to a competitor.
• Not the right time.
• Lack of product features.
• Poor sales experience.

3. Overall Activity Report Template

For managers, having the ability to quickly view their team’s overall activity can be a great way to track productivity. It also provides information on key business development metrics, such as emails, prospect visits, and client calls.

Make sure to customize your report to include the metrics that matter most to your sales team. For instance, if your organization places a higher value on meeting prospects in person, you’ll want to include KPIs focused on visiting prospects.

4. Total Sales Report Template

Creating a custom total sales report dashboard allows your management team to quickly see how each salesperson is doing over a period. This information makes it easier to identify team members who outperform their peers and those who may need coaching.

Build Reports Your Sales Team Will Use

As a sales leader, you have a lot to keep track of. That’s where these sales reports shine. These documents provide critical insights into what’s working and what you could improve.

Here’s a key takeaway: Always track your customer and lead data. If you don’t, you'll miss out on reports that will undoubtedly help your business to drive revenue growth.

Editor's note: This post was originally published in March 2016 and has been updated for comprehensiveness.

Don't forget to share this post!

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Calculate average deal size, win-loss rate, churn rate, and more.

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• What is Sales Analytics? [Benefits, Types, and Metrics to Track]

Analytics has become an integral part of life, from finding the shortest route to work to forecasting stock market trends. 

Analyzing previous trends ensures that businesses always make the right decision. And as the scale of the decision and its impact magnifies, more robust analytics need to take over. The gut feeling cannot cut it anymore.   

According to McKinsey, businesses that rely on data to make decisions are 19 times more likely to be profitable. It’s no surprise that sales, a number-driven aspect of business, benefits from the right analytics. If your goal is fast and sustainable growth, your sales team must make quick and accurate decisions to improve its performance.  

Sales analytics isn’t a new term. Businesses have been using it for years to optimize various steps of the sales cycle . But most of them are just at the tip of the iceberg when it comes to intelligent sales analytics.  

This article aims to help you identify appropriate sales analytics to resolve business challenges.   

What is Sales Analytics?

Sales analytics refers to the use of technology to collect and use sales data to derive actionable insights. It is used to identify, optimize, and forecast sales. It uses different metrics and KPIs to plan an efficient sales model that generates higher revenue for the business. Here’s how Prashant Ahlawat, Vice President – Analytics and Transformation, at LeadSquared, defines sales analytics:

“Sales analytics is a compass for your sales teams. It guides you towards growth using tools that track past data and current performance against goals. The analytics reports then help you plan targets in the future.”  

Sales involves many stages with their own set of metrics. There’s always an abundance of data to track, but it’s hard to make sense of it every time.  

While you may want to use data to find gaps in your sales processes, it’s next to impossible without the right tools.  

One such tool is sales analytics. It can help you identify gaps and improve your sales processes.  

Let’s take a closer look at it.  

Benefits of Sales Analytics

1. Boost sales productivity  

Sales reps need to always be on their toes to achieve results. Sales processes are often complex. You’ll find several hurdles between lead gen to closing a sale .  

Data analytics in sales help managers decrease the sales cycle length by identifying the areas of improvement. Along with an average 20% increase in sales productivity , analytics also helps salespeople decrease leakages in the sales pipeline . 

2. Identify new sales opportunities   

As a business grows, products evolve, new sales opportunities emerge. Tracking sales data helps enterprises understand the product fitment across industries and regions. The historical data allows salespeople to define their customer base and introduce opportunities to upsell and cross-sell .  

3. Plan effective sales targets  

  Sales data—deals closed, qualified opportunities, length of sales cycles—captured over a year or even a quarter, can significantly improve the way businesses strategize their sales targets .  

Predictive analysis helps forecast sales revenues and set individual targets based on your sales team’s performance.  

4. Improve customer acquisition  

Personalized customer journeys are hard to build without insights into customer behavior. The customer’s journey has multiple touchpoints , which can be improved by tracking factors like time on a certain website, tone during the call, and response rate. Customer analytics help salespeople make relevant recommendations, and over 44% of businesses use it to acquire new customers.  

5. Incentivise sales teams   

Incentives are the biggest motivator for sales teams. But you can’t reward their performance without accurate records.  

Recording sales activities and their outcomes help businesses incentivize their sales teams fairly. Analytics simplify payroll management and help managers choose an appropriate sales commission structure .  

6. Increase customer retention   

Every business aims to improve their Customer Lifetime Value because acquiring a new customer is 5X more expensive than retaining one. And that’s precisely what sales analytics help you achieve! Diagnosing the possible drop-off stages and taking preventive measures brings down the number of churned accounts. 

So, now you know the benefits of sales analytics. And the first step to achieve them is to use the right type of sales analytics that align with your sales goals .  

7 Types of Sales Analytics [+ Metrics to Track!]

The scope of sales analysis is vast.  

But it all boils down to choosing the right analytics and metrics that help you achieve your business goals.  

Business analytics fall under four broad categories: 

• Descriptive  
• Diagnostic   
• Predictive  
• Prescriptive 

However, sales analytics are more specific to a business’ sales process. Let’s look at the 7 essential sales analytics and relevant metrics under each type.   

1. Market Research Analytics

Marketing research involves deriving data related to target customers, well-performing regions, and untapped markets. It is vital to launch a new product and begin sales in new geos.   

The metrics to track are: 

• Targetable customer base 
• Region-wise sales 
• Competitor performance and market share  
• Demand for the product 
• Sales performance in the previous quarter (Especially if you’re looking to ramp up sales in a certain region) 

2. Product Sales Analytics

Product Sales Analytics can be highly effective for businesses with multiple or seasonal product offerings. It considers the performance of every product or service that the company offers. It helps the sales team identify the products to focus on based on the revenue and sales targets . The analytics can be tracked for a certain timeframe and demographic. 

• Net Promoter Score (NPS) for the product/service (NPS score= %promoters – %detractors, where promoters rate your product 8-10 and detractors rate it 0-7 out of 10) 
• The number of active users over a daily and monthly timeframe.  
• Monthly recurring revenue (MRR = Average revenue per account x Total number of accounts) 
• % Sales volume ((Units of individual product sold x 100) ÷ Total units of all products sold) 
• Repeat buys per product (Repeat Purchase Rate = (Repeat customers x 100) ÷ Total customers) 
• Minimum, maximum, and average selling price per product 

Comparing these metrics across different products/services helps you ramp up sales or drop certain products. 

3. Sales Effectiveness Analytics

Almost every business would want to track its sales effectiveness. The extent and type of analytics used to monitor teams vary across different industries and businesses.  

Tracking productivity and sales effectiveness on a daily, monthly, and quarterly basis help in identifying your team’s scope of improvement.  

The metrics to track differ as per the targets that the business has set and its sales workflow. B2Cs usually have a higher sales velocity and shorter sales cycles than B2Bs. But in general, here are a few metrics that B2Bs and B2Cs rely on.   

Sales effectiveness metrics for B2B businesses 

• Target achievement analytics (Your targets can be conversions or revenue dependent. For revenue dependent targets, % Achievement = (Revenue generated x 100) ÷ Target revenue). And for conversion dependent targets, % Achievement = (Number of deals closed x 100) ÷ Target conversions.)) 
• Number of meetings generated  
• Ratio of leads to qualified meetings  
• Ratio of qualified meetings to conversions  
• Attrition rate (Usually calculated for team managers, Attrition Rate = (No. Of employees who left the team x 100) ÷ Average no. of team members) 
• Customer feedback  
• Sales and CRM hygiene  

Sales effectiveness metrics for B2C businesses 

• Daily talk time  
• Weekly and monthly sales conversions (Conversion Rate = (Conversions x 100) ÷ Total opportunities) 
• Turnaround time  
• Lead to opportunity ratio  
• Total revenue generated (Total Revenue = Number of products sold X Cost per unit) 
• Customer feedback 
• Length of the sales cycle   
• Sales and CRM hygiene 

4. Sales Pipeline Analytics

The journey from a qualified prospect to a customer is mapped in the sales pipeline . But each stage in the sales pipeline can turn into a drop-off point if it isn’t properly tracked and analyzed. Sales pipeline analytics help you determine what slows down the conversions and what you can do to speed it up.  

The metrics to track are:  

• Conversion rate by sales funnel stage 
• Pipeline to conversions ratio  
• Weighted value of pipeline (Weighted value = Probability of Closing x Deal Value, where the probability depends on the stage of the pipeline, such as 50% for the negotiation stage) 
• Sales Pipeline Velocity (Sales Pipeline velocity= (Number of deals in pipeline x Average deal size) ÷ Average sales cycle length) 
• Pipeline Coverage (Number of opportunities in pipeline for given period ÷ quota period) 
• Deal Drop-off by Stage  
• Sales Rep Pipeline Performance  

(Also read: 32 Sales KPIs Every Manager Should Measure to learn more about the different sales performance metrics in detail) 

6. Predictive Analytics for Sales Strategy

Every business aims to grow faster, witness higher conversions, and create an unmatched revenue stream. Hours of planning, strategizing, and forecasting go into realizing these goals, but there’s no guarantee they’ll be met. Creating a sales strategy using analytics can’t assure the desired results, but the chances that you will meet them shoot up.     Forecasting growth while keeping all the variables in mind is highly complicated. Sales data from the past acts as a benchmark and every year the stakes are increased to ensure business growth. 

Here are some of the metrics that help you set suitable targets for your teams:  

• Year-over-year (YoY) growth ([(Current Year’s Revenue – Previous Year’s Revenue) x 100] ÷ Previous Year’s Revenue) 
• People level analytics to assess team’s performance  
• Lead Scoring , which helps you prioritize warm leads for faster conversions  
• Sales Cycle length (Sum of the Number of days it took to close each deal ÷ Total Number of deals) 
• Win rate (Deals closed ÷ Total Number of deals) 
• Sales Linearity assesses if the progression of leads in the pipeline is as predicted 
• Marketing Qualified Leads (MQL) to Sales Qualified Leads (SQL) conversion rate 

7. Churn Analytics

Churned accounts can be discouraging for your sales teams. Also, it brings a steep drop in your annual revenue.  

Churn analytics help you identify touchpoints with a higher drop-off rate and the accounts with a high churn probability. A lot of the churn metrics are qualitative or based on customer behavior. With this information, your salespeople can intervene to prevent churn.  

The churn analytics can be divided into two categories, predictive and post-mortem. The metrics to track are interdependent for both these categories. 

Metrics that predict churn:

• Low user activity  
• Slow response rate 
• No opportunities to upsell  
• Delayed payments  

Once the account is churned, it is important to evaluate the factors that caused the churn to avoid them for other accounts. It is also known as the post-mortem of the churn. 

Metrics to analyze the churn:

• Lifetime Value (LTV) of a customer (LTV = Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period) 
• Churn rate ((Lost Customers ÷ Total Customers at the Start of Time Period) x 100) 
• Customer and revenue churn (% Change in number of customers and annual revenue because of the churn)  

8. Marketing analytics

Marketing Qualified Leads (MQLs) have high intent and can be easily converted into a customer by the sales team. Employing the right marketing analytics ensure that leads keep flowing into the sales funnel .  

Usually, many campaigns and marketing activities run in parallel. Figuring out which strategy generates the highest ROI and brings in the greatest number of leads is extremely important. So, analyzing your lead sources and the effectiveness of each campaign helps the marketing team restructure their budgets to improve the volume of quality leads.   

• Customer Acquisition Cost (CAC) (Customer Acquisition Cost = Cost of sales and marketing ÷ number of new customers acquired) 
• Lead to acquisition ratio (Lifetime Value (LTV) ÷ Customer Acquisition Cost (CAC)) 
• Traffic by source  
• Number of Market Qualified Leads  
• ROI from each Lead Source  
• Lead to Demo Conversions  
• Average Search Engine Results Page (SERP) Position 

Now that we’ve discussed all the types of sales analysis methods, mapping them to your business analytics becomes extremely easy. This table sums it all up.  

You can bookmark this page or download this  Sales Analytics Guide  to share with your team. Sales analytics carry the power to transform your business However, the general notion is analytics is a high-end and complicated matter that’ll take up a lot of investment.  

But this isn’t true; you just need to identify what works for your business.  

Getting Started with Sales Analytics

“Any business with a sales team needs sales analytics, irrespective of the industry or the complexity of your product. All KPIs that you set for your teams should be tracked and analyzed, even if you use the most basic reports.”    Murali Krishna, Vice President – Sales, LeadSquared  

The biggest deterrents to using advanced sales analytics tools are the cost and the need for a well-defined sales process. However, sales analysis doesn’t always need a tool.   

For businesses with small teams or a short and simple sales process, people-level analytics and sales effectiveness metrics should suffice. The business can effortlessly record and analyze this data on Excel sheets.   

As the size of your sales team increases, Excel sheets begin to break. The amount of data increases exponentially and only a good sales analytics software can meet the requirements. 

A sales analytics software is also essential if you have multiple product offerings that need to be mapped to customers.   

“While a few industries can make do without a sales analytics software, it’s a basic requirement for others such as edtech, real estate, banking and insurance, manufacturing, and e-commerce.”    Pritika Khorana, Regional Sales Manager, LeadSquared 

If you’re just getting started with sales analytics, the following courses and books could help!  

Sales Analytics Courses:  

1. LinkedIn’s Business Analytics: Sales Data  2.   Sales Analytics Beginner Complete Course by Udemy   3. Wharton’s Business Analytics  

Sales Analytics Books:  

1. The Power of Sales Analytics by A. Zoltners, P. Sinha, and S. Lorimer  2. Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die by E. Siegel  3. Business Analytics: Data Analysis & Decision Making by S. Christian Albright and Wayne L. Winston 

The right sales analytics can be a game-changer for your business. That’s exactly how Tricoci University of Beauty Culture, a Chicago-based cosmetology school, increased their process efficiency by 75%.  

Here’s a little peek into their sales analysis journey with LeadSquared.   

How Tricoci University Increased Process Efficiency by 75%

Tricoci University has 16 campuses spread across Illinois, Wisconsin, and Indiana. The school takes pride on its people-centric approach to preparing the leading beauty professionals of tomorrow.   

An absence of sales and marketing analytics made it hard for them to improve their enrolment process quickly. Here’s when they chose LeadSquared as their CRM tool to meet their enrolment goals.   

The sales analytics journey will be impactful only when the data trends are visualized and reported. There are a few ways to go about this. You can either integrate your sales data with a visualization and reporting tool—like Tableau, Microsoft Power BI, or Qlikview— or you can opt for a CRM with reporting tools.   

Both these options work great for businesses, but a CRM with sales reporting abilities is more convenient and financially feasible. LeadSquared CRM , with its advanced reporting tools, is a one-stop solution to track and visualize sales data.   

Watch our Masterclass on LeadSquared Reports & Analytics to understand the different types of reports that you can generate on the LeadSquared platform.  

Every business intends to use its sales analytics software for different purposes. And there are many that you can choose from.

Key Features of a Sales Analytics Tool

A sales analytics tool tracks and analyzes sales data to make actionable improvements. But choosing the right tool for sales analysis is imperative. Here’s a checklist of the features that you should evaluate before you purchase a new sales analytics software.

1. Visualization Capabilities  

The tool should be able to visualize your sales data in every way possible–charts, tables, graphs, or tables. It’s important to note that the visualization must be real-time and easy to generate and access.  

  2. Scalability  

Can the tool handle the data when your team and the number of leads increase by 10X or 15X? If you aim to grow rapidly, it’s important for the tool to scale along with your business.  

3. Platform Security  

Loss of data, whether it is process-related or sensitive lead information, can affect your business negatively. The platform should be secure enough to prevent data leaks and the loss of important information. 

4. Uptime of the system  

Sales data is generated by the minute. So, your sales analytics software must always stay operational. The core engine should be robust enough to carry out all the calculations and handle reports even when lead volume peaks.  

5. Short term and long-term data insights  

The insights must help you make decisions both on a short and long term. For instance, on a daily/weekly and on a monthly/quarterly/yearly basis. So, the software must consistently record and update the data. 

I hope this article helps you streamline your sales analytics strategy to resolve any business challenges you may face. To sum it up, sales analysis is all about putting your data to work to improve sales outcomes. With the right tool, sales analytics can completely transform your business. 

A CRM is one such tool to track sales data, record it, and derive insights from it. If you’re looking for a CRM with advanced monitoring and reporting capabilities, you should give LeadSquared a shot! 

Book a demo to know more about LeadSquared’s Sales CRM.

Sales analytics is used to identify, optimize, and forecast sales. It uses different metrics and KPIs to strategize a sales model that is efficient and generates high revenue for a business.  

Sales data that is tracked on a CRM can be used to generate insightful reports. These reports help you boost sales productivity, increase customer retention , improve sales strategy and generate a high lead volume. The CRM analytics also highlight the products and markets that your sales team must focus on.

Business analytics fall under four broad categories—descriptive, diagnostic, predictive, and prescriptive. They take both qualitative and quantitative factors into account and help your business achieve rapid growth.

Kritika is a content writer at LeadSquared. She loves reading and is trying to learn more about sales. Through her writing, she wants to make sales easier for everyone. You can connect with her on LinkedIn or write to her at [email protected].

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Data-driven decision making via sales analytics: introduction to the special issue

• Published: 26 July 2020
• Volume 8 , pages 125–126, ( 2020 )

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• J. Ricky Fergurson 1  

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Sales powers business throughout the world. While sales (and marketing) literature has spent much time exploring analytics and measurement, there seems to be a revitalized interest in sales and especially sales data and analytics. Marketing analytics powers the current wave of data-driven decision making, and leveraging strategic data remains a source of building a sustainable competitive advantage. In Volume 1, edition 1 of Journal of Marketing Analytics , Breur ( 2013 , p. 1) proclaimed in the journal’s first editorial,

We’re drowning in data. Structured data, unstructured data, ‘Big Data,’ in an increasingly digital world, we create even more data. According to an IDC report, the global growth in data volumes amounts to about 60 percent per year. That means it will grow tenfold every 5 years!.

As we stand here seven years later, the available amount of data has grown exponentially due to the increased connectivity and data availability made possible by technology increasingly permeating the sales profession. Salespeople, sales managers, and executives must quickly make sense of oceans of sales-related data. With this influx of sales data, organizations need to develop actionable insights for their sales teams and their clients. The Sales Education Foundation ( 2020 ) notes that sales-specific research is necessary for bridging the gap between academia and industry. In reinforcing this need, the Sales Education Foundation has provided more than $125,000 in grants to promote high-quality sales research since 2011. (Sales Education Foundation 2020 ).

Additionally, more universities are beginning to add sales analytics to their available sales courses. Given this increased availability of sales data and information and the apparent growing demand for sales research, I feel that reaching a better understanding of sales analytics is paramount in academic research. That is why I felt honored to be invited to edit this special issue on sales analytics.

The business world changes rapidly, and organizations must be able to help there sales teams adapt to these changes. Sales managers need the availability to quickly access published research to gain insights into best practices and solid methodology to deal with their daily challenges (Sales Education Foundation 2020 ). With the recent upheaval of industry due to the COVID-19 pandemic, the potential rise or fall of some corporations hinges on their ability to leverage sales data assets quickly and effectively. The goal of the Journal of Marketing Analytics has always been to incorporate rigorous research methods with real-world cases so that academics and industry professionals can stay on top of the latest trends and cutting-edge analytics. Measurement has always played a pivotal role in connecting theoretical concepts, and the conclusions reached about these concepts in academic research. As noted by Krishen and Petrescu ( 2018 , p. 117), “Metrics and data are empty shells without proper theories and interpretations behind them.” Hall and Lee ( 2019 ) reinforced this insight in the Journal of Personal Selling & Sales Management’s special edition on “Measurement in Sales Research” by accentuating the strong links between theories, empirical data, and research conclusions.

As I set out to consider the many submissions for this special issue and extend invitations to reviewers, it was inspiring to see the high commitment level by sales scholars. The overarching goal was to meld strong theoretical and empirical analytics research in sales and sales management. The articles published in this special issue accomplish that goal and offer insightful views into each of their chosen topics. In each article, the authors’ insights and perspectives lay a foundation that should be considered for future academic research. The first two articles provide a common theme in regard to using CRM.

First, Hoyle et al. dissect how sales managers and salespeople are using the modern-day tools at their disposal to achieve accurate sales forecasting and the resulting impacts. In doing so, this article examines factors that influence the type of forecasting used and potential explanations for why. While recognizing the importance of data-driven decisions and predictive analytics in organizational success and the ability to improve day-to-day efficiencies, Hoyle et al.’s research demonstrates that there is a lack of action and follow through on these ideals among both sales managers and salespeople. This research offers several managerial contributions relating to the process of sales forecasting. It also puts forth a call for further research on forecasting, including the role of varied CRM and ERP systems, sales force automation, and other technologies to identify the diverse impacts on forecasting, planning, and goal setting.

Second, Rodriguez and Boyer integrate Technology Acceptance Model (TAM) and IS success model to explore the influence (Mobile CRM) mCRM has on sales performance. This article applies an adaptation of mCRM to salespeople in a business-to-business context. This research also helps elucidate the role mCRM plays in traditional CRM adoption.

In the other two articles, Merkle et al. use a unified theory of brand equity to explore the decline of Major League Baseball (MLB) ticket sales and game attendance within the framework of MLB brand equity. Additionally, this research examines the mediating role of attendance and local television and the moderating role of Twitter followers in the relationships between MLB marketing assets and the financial performance of the teams using secondary data from multiple sources. Additionally, Said looks at a bibliometric analysis of salesforce research from 1912–2019 to put forth a four-step procedure to merge SCOPUS and Web of Science databases when performing a bibliometric analysis. This research demonstrates that doing separate bibliometric analyses of each database does not prove a complete picture of the state of knowledge and tendencies in a field.

It was my pleasure to work with the reviewers and authors to put this special issue together. As I feel that critical research into sales analytics is still in its infancy, I hope that this special issue lays a foundation for the academic community to conduct further sales analytics research.

Breur, T. 2013. Editorial. Journal of Marketing Analytics 1: 1–2.

Article   Google Scholar  

Hall, Z.R., and N. Lee. 2019. Taking the measure of measurement in sales research: Introduction to the special issue. Journal of Personal Selling & Sales Management 39 (3): 201–206.

Krishen, A.S., and M. Petrescu. 2018. Marketing analytics: Delineating the field while welcoming crossover. Journal of Marketing Analytics 6: 117–119.

Sales Education Foundation. 2020. Elevating sales research . https://salesfoundation.org/elevating-sales/sales-research/ . Accessed 14 June 2020.

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Fergurson, J.R. Data-driven decision making via sales analytics: introduction to the special issue. J Market Anal 8 , 125–126 (2020). https://doi.org/10.1057/s41270-020-00088-2

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How to Conduct Marketing Research and Analysis

A key component of running any successful business is regularly conducting market analysis—a process that provides insight into where the company is and where it's heading. This analysis contains qualitative and quantitative marketing research, primary and secondary research, and additional data points regarding positioning, industry and market statistics, insights into consumer attitudes and buying habits, customer satisfaction, and more.

According to the global data and business intelligence platform Statista, the worldwide market research industry surpassed $81 billion in 2022. 1 The United States Bureau of Labor Statistics (BLS) projects that employment in the industry is due to grow 13% over the next ten years. 2 In light of that strength and likely rapid expansion, facility with marketing research and analysis is an increasingly valuable skill. Keep reading to explore some of the key elements of this essential process.

Market Research, Marketing Research, and Other Key Terms

It’s important to understand the differences between market research/analysis and marketing research/analysis. The terms are similar but the meanings are distinct: 3

• Market research: A study done to collect statistics on a given market within a specific industry
• Market analysis: Interpretation of market information to determine a market’s size, growth potential, audience, and competitive landscape 4
• Marketing research: The process of collecting data to understand consumer behaviors, preferences, and market dynamics
• Marketing analysis: Evaluating and interpreting collected data to draw conclusions, derive actionable insights, and make informed, data-driven marketing decisions

In addition, as you get further into marketing research and analysis, you’ll need to be familiar with these terms:

• Quantitative marketing research involves gathering numerical data to quantify and analyze patterns and relationships in consumer behavior
• Qualitative marketing research involves gathering information that isn't expressed in numbers to gain insights into consumer behaviors, attitudes, and motivations
• Ethnographic research is the process of studying a target audience's environment to gain a clearer understanding of potential customers’ behaviors and preferences
• Market segmentation is the process of dividing a target market into distinct groups of consumers; each group of people shares similar characteristics or needs
• Data mining is the process of analyzing large datasets to identify patterns, relevant trends, and valuable marketing insights; data mining for marketing insights is used to influence strategizing and decision-making
• Competitive analysis: By analyzing competitors to understand their strategies, strengths, weaknesses, and market positioning, businesses become able to identify opportunities and threats
• Market trend analysis is the examination of historic and current market data to identify patterns and emerging trends

Primary and Secondary Research in Marketing: What’s the Difference?

To conduct thorough, effective marketing research and analysis, you need both primary and secondary data.

Primary research involves original data collected directly from targeted sources. This is typically done through in-person or online surveys, focus group studies, observations, or experiments.

Primary research offers several distinct advantages. It’s highly relevant due to its freshness and the researchers’ ability to customize the surveys or studies they administer. It also allows analysts to hone in on the specific market they're trying to understand, which leads to sharper data precision and accuracy.

Secondary research, on the other hand, uses existing information that others have previously collected in the form of published reports, articles, academic papers, market research reports, government publications, industry databases, or historical data.

Secondary research is more cost-effective and saves time because it doesn’t require data collection. It also provides a broader perspective by offering a comprehensive view of trends and historical information.

How to Conduct Quantitative and Qualitative Marketing Research

Quantitative marketing research is a structured process that involves gathering, processing, and interpreting numerical data.

• The process begins with defining specific research objectives and selecting an appropriate quantitative research method, such as experiments or customer surveys
• Researchers then develop a structured instrument, like a questionnaire, to collect numerical data from a representative sample
• After data collection, meticulous data entry is essential for ensuring accuracy
• Analysts then employ statistical analysis methods, such as descriptive and inferential statistics, to interpret the data

Qualitative research delves more into the motivations behind consumer behavior by analyzing non-numerical information. By its nature, qualitative data can be ephemeral—hard to quantify. The research process can involve listening to recordings from focus group studies, reading social media comments and reviews, and understanding subtext from customers based on visual and other non-verbal cues.

• Similar to quantitative marketing research, qualitative research begins by selecting a research method, such as individual interviews or focus groups, and defining research objectives
• Researchers then carefully recruit a diverse set of participants that represent a target audience
• During data collection, the use of open-ended discussions and follow-up questions can uncover meaningful insights that might not be readily apparent at the outset
• Afterward, transcribing the data and looking for recurring themes and patterns can allow researchers to interpret the findings within the context of the research objectives

How To Present Market Research and Analysis

Once you’ve completed marketing research and analysis, you’ll likely be called upon to present your findings. If market research techniques come easily to you but presenting before other people seems daunting, a few simple strategies can streamline the process:

Focus on Key Insights

Highlight the most important findings to avoid overwhelming your audience with too much data. They don’t need or want to know every fact that your research turned up, so stick to the information that addresses their priorities. Be ready to answer questions with contextual, detailed information if people ask for it, but keep the structure of your presentation focused on the big-ticket items.

Use Data Visualization

Data visualization involves using software to display substantial amounts of information in a graphic format: as dashboards, pie charts, graphs, and so on. By presenting your findings visually, you can share them with diverse audiences—company leadership, clients, and other stakeholders—in engaging, relatable ways.

Tell a Story

Frame your presentation as a narrative—that is, tell a story—to engage your audience even more and make your findings memorable. Encourage your audience to ask questions. This turns your presentation into a collaborative dialogue, keeps them involved, and helps you shine as you present direct answers to address their needs.

Add Marketing Research and Analysis to Your Expertise

The world of marketing is constantly changing, so up-to-the-moment expertise is essential for a successful career . The comprehensive curriculum in SCU's Online Master of Science in Marketing program will hone your expertise in marketing strategy, marketing technology , social media marketing, search engine optimization, email marketing, marketing analytics, and more.

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1. Retrieved on September 21, 2023, from statista.com/topics/1293/market-research/#topicOverview 2. Retrieved on September 21, 2023, from bls.gov/ooh/business-and-financial/market-research-analysts.htm 3. Retrieved on September 21, 2023, from keydifferences.com/difference-between-market-research-and-marketing-research.html 4. Retrieved on September 21, 2023, from coursera.org/articles/market-analysis

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What is Market Research Analysis? Definition, Steps, Benefits, and Best Practices

By Nick Jain

Published on: September 8, 2023

Table of Contents

What is Market Research Analysis?

Market research analysis steps, market research analysis benefits, 15 market research analysis best practices.

Market research analysis is defined as the systematic process of collecting, processing, interpreting, and evaluating data related to a specific market, industry, or business environment. Its primary purpose is to gain insights into various aspects of the market, including consumer behavior, market trends, competitive landscape, and other relevant factors. Market research analysis aims to provide businesses with actionable information that can inform their decision-making processes and strategies.

Here are the key components and objectives of market research analysis:

• Data Collection: The process begins with gathering data from a variety of sources. This data can be classified into two main categories:

Primary Data: Data collected directly from original sources, such as surveys, interviews, focus groups , observations, and experiments.

Secondary Data: Existing data collected by third parties, such as market reports, government publications, industry publications, and academic studies.

• Data Processing: Once collected, the data is processed to ensure its accuracy and reliability. This step involves cleaning the data to remove errors or inconsistencies and structuring it in a way that is suitable for analysis. Data processing may also involve data coding, categorization, and transformation.
• Data Analysis: The heart of market research analysis involves examining and interpreting the data to extract meaningful insights. Various analytical techniques and statistical tools are used to identify patterns, relationships, trends, and correlations within the data. This analysis supports businesses in making knowledgeable decisions.
• Competitive Analysis: Assessing the competitive landscape is an essential aspect of market research analysis. This includes studying competitors’ strengths, weaknesses, strategies, market share, and customer perceptions. Understanding the competitive environment is crucial for shaping a company’s strategy and positioning in the market.
• Consumer Behavior Analysis: Understanding how consumers think, feel, and act is a central objective of market research analysis. It involves identifying consumer preferences, purchasing habits, motivations, and pain points. This information helps businesses tailor their products, services, and marketing efforts to meet customer needs effectively.
• Market Trends Identification: Market research analysis helps businesses stay updated on the latest market trends, industry developments, and emerging technologies. Recognizing these trends allows companies to adapt, innovate, and remain competitive in their respective markets.
• Strategic Decision-Making: Ultimately, the goal of market research analysis is to provide actionable insights that inform strategic decision-making. These decisions can relate to product development, pricing strategies, marketing campaigns, market entry or expansion, and more.
• Risk Mitigation: By understanding market dynamics and potential challenges, businesses can proactively identify and mitigate risks. This reduces the likelihood of unexpected setbacks and allows for more effective crisis management.

Market research analysis is a vital tool that helps businesses gather and interpret data to make informed decisions, mitigate risks, identify opportunities for growth, and stay competitive in their respective markets. It plays a pivotal role in shaping business strategies and ensuring that resources are allocated effectively to achieve business objectives.

Market research analysis involves a series of systematic steps to gather, process, and interpret data to gain insights into a specific market or industry. These steps are crucial for making informed business decisions and developing effective strategies. Here are the key steps in the market research analysis process:

Step 1: Define Research Objectives

Precisely outline the goals and objectives of your market research . What specific insights or data are you aiming to acquire? What are your research questions? Understanding your objectives is essential for guiding the entire process.

Step 2: Data Collection

Collect relevant data from various sources. This can include primary data (directly collected from surveys, interviews, focus groups , observations, etc.) and secondary data (existing data from reports, publications, databases, etc.). Make certain that your data-gathering approaches are in harmony with your research objectives.

Step 3: Data Processing and Cleaning

Clean and preprocess the collected data to ensure its accuracy and reliability. This step may involve removing duplicate records, correcting errors, and organizing the data for analysis.

Step 4: Data Analysis

Perform data analysis using appropriate techniques and tools. Common analytical methods include statistical analysis, regression analysis, trend analysis, customer segmentation, and sentiment analysis. The objective is to derive significant insights from the data.

Step 5: Competitive Analysis

Assess the competitive landscape by studying your competitors. Analyze their strengths, weaknesses, market share, strategies, and customer perceptions. Recognize potential opportunities and vulnerabilities within the competitive landscape.

Step 6: Consumer Behavior Analysis

Examine consumer behavior by analyzing data related to preferences, purchasing habits, motivations, and demographics. Gain insights into what drives consumer decisions and how they interact with your products or services.

Step 7: Market Trends Identification

Identify and analyze current market trends, industry developments, and emerging technologies. Stay up-to-date with changes in the market that could impact your business.

Step 8: Data Interpretation

Interpret the outcomes of your data analysis within the framework of your research goals. What do the findings mean for your business? Are there actionable insights that can inform your decisions?

Step 9: Report and Presentation

Create a comprehensive report or presentation that summarizes your research findings. Use clear visuals, charts, and graphs to convey the information effectively. Include recommendations and insights that can guide decision-making.

Step 10: Strategic Decision-Making

Use the insights gained from your market research analysis to make informed strategic decisions. These decisions can relate to product development, pricing strategies, marketing campaigns, market entry or expansion, and more.

Step 11: Implementation

Put your strategic decisions into action. Implement the changes and strategies based on your market research analysis. Continuously track progress and adapt your approach as necessary.

Step 12: Continuous Monitoring

Market research analysis is an ongoing process. Continuously monitor market conditions, consumer behavior, and competitive developments to stay adaptable and responsive to changes in the market.

By following these steps, businesses can harness the power of market research analysis to make informed decisions, gain a competitive edge, and drive growth and innovation in their respective industries.

Learn more: What is Research Design?

Market research analysis offers numerous benefits to businesses and organizations across various industries. These benefits are instrumental in making informed decisions, shaping strategies, and ultimately achieving business objectives. Here are some of the key advantages of conducting market research analysis:

• Informed Decision-Making: Market research analysis provides valuable insights and data-driven information that support informed decision-making. By understanding market dynamics, consumer behavior, and trends, businesses can make strategic choices that are more likely to lead to success.
• Risk Mitigation: Through market research , organizations can identify potential risks and challenges in advance. This proactive approach allows them to develop strategies for risk mitigation and crisis management, reducing the impact of unforeseen events.
• Market Understanding: Market research analysis helps companies gain a deeper understanding of their target audience, including demographics, preferences, and purchasing behavior. This knowledge is critical for tailoring products, services, and marketing efforts to meet customer needs effectively.
• Competitive Advantage: By analyzing the competitive landscape, businesses can identify their competitors’ strengths and weaknesses. This information enables them to develop strategies that capitalize on their strengths and exploit competitors’ weaknesses, leading to a competitive advantage.
• Product Development: Market research analysis guides product development by uncovering consumer preferences, pain points, and unmet needs. This ensures that companies create products that resonate with their target market, increasing the likelihood of success in the market.
• Effective Marketing Strategies: Understanding consumer behavior and preferences helps in crafting more effective marketing campaigns. Market research analysis can identify the most suitable marketing channels, messaging, and timing to reach and engage the target audience.
• Optimized Pricing Strategies: Businesses can determine the optimal pricing strategies for their products or services through market research analysis. This includes assessing price sensitivity, competitive pricing, and value perception among customers.
• Market Expansion and Diversification: Market research analysis can reveal new market opportunities and potential areas for diversification. Companies can use this information to expand their reach into new markets or introduce new product lines.
• Improved Customer Satisfaction: By aligning products and services with customer preferences, companies can enhance customer satisfaction and loyalty. Contented customers are increasingly inclined to become returning purchasers and enthusiastic brand supporters.
• Cost Efficiency: Market research analysis can help companies allocate resources more efficiently by focusing on strategies and initiatives that are most likely to yield positive results. This reduces wasteful spending on ineffective activities.
• Measurable Results: Market research provides a basis for measuring the success of strategies and initiatives. It allows companies to set benchmarks, track progress, and assess the return on investment (ROI) of various marketing and business efforts.
• Innovation and Adaptation: Market research analysis keeps businesses up-to-date with market trends and emerging technologies. This knowledge encourages innovation and the ability to adapt to changing market conditions.
• Enhanced Reputation: Companies that demonstrate a commitment to understanding their market and meeting customer needs often enjoy an enhanced reputation in the eyes of consumers, partners, and investors.

Market research analysis is a valuable tool that empowers businesses to make data-driven decisions, minimize risks, gain a competitive edge, and achieve sustainable growth. It is an investment that can yield substantial returns by helping organizations align their strategies and resources with market realities and customer expectations.

Learn more: What is Primary Market Research?

Effective market research analysis is crucial for businesses to make informed decisions and stay competitive in their respective industries. To ensure that your market research analysis yields valuable insights, consider these best practices:

1. Clearly Define Objectives

Begin by clearly defining the objectives of your market research analysis. What particular inquiries do you aim to address? What are your goals and desired outcomes? Having a well-defined purpose will guide your research efforts.

2. Use a Mix of Data Sources

Combine both primary and secondary data sources. Primary data is collected directly from your target audience, while secondary data comes from existing sources. Using a mix of data sources enhances the comprehensiveness of your analysis.

3. Ensure Data Quality

Data quality is paramount. Take steps to ensure the data you collect is accurate, relevant, and reliable. Verify the credibility of your sources and implement data-cleaning processes to remove errors and inconsistencies.

4. Segment Your Audience

Segment your target audience into distinct groups based on demographics, behaviors, or other relevant criteria. This allows for more tailored insights and strategies.

5. Use a Variety of Analysis Techniques

Employ a range of analysis techniques such as quantitative and qualitative methods . Quantitative analysis involves numerical data, while qualitative analysis explores insights from open-ended questions and interviews. This all-encompassing strategy offers a more complete perspective.

6. Stay Objective and Unbiased

Avoid bias in your research by maintaining objectivity. Be aware of any preconceived notions or assumptions that might influence your analysis. Use unbiased language and interpretation of results.

7. Thoroughly Understand Your Market

Before conducting research , gain a deep understanding of the market and industry you’re investigating. This background knowledge will help you ask the right questions and interpret findings effectively.

8. Invest in Technology and Tools

Utilize advanced tools and software for data analysis. These tools can streamline the process, handle large datasets, and provide more robust insights. Consider investing in data visualization tools to present findings effectively.

9. Continuous Learning and Adaptation

Keep yourself informed about the most current research methodologies and industry developments. Market conditions evolve, so it’s essential to adapt your research methods accordingly.

10. Ethical Considerations

Adhere to ethical standards in data collection and analysis. Respect privacy and confidentiality, obtain informed consent when necessary, and ensure compliance with data protection regulations.

11. Regularly Communicate Findings

Share research findings with relevant stakeholders within your organization. Effective communication ensures that insights are used to inform decision-making and strategy development.

12. Iterative Process

Market research analysis should be an iterative process. As you implement strategies based on your findings, continue to monitor and analyze the market to stay responsive to changes.

13. Benchmark and Measure Progress

Set benchmarks and key performance indicators (KPIs) to measure the success of your strategies. Regularly assess whether you are meeting your objectives and adjust your approach as needed.

14. Seek External Expertise

Consider consulting with external experts or hiring market research professionals when needed. Their expertise can enhance the quality and reliability of your analysis.

15. Document Your Process

Maintain thorough documentation of your research process , including data sources, methodologies, and assumptions. This documentation is valuable for transparency and future reference.

By following these best practices, businesses can conduct market research analysis that provides actionable insights, informs decision-making, and contributes to long-term success in a competitive market.

Learn more: What is Qualitative Market Research?

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Sales Analysis

Table of Contents

What is sales analysis.

Sales analysis is reviewing your sales data to identify trends and patterns. Sales data can help you make better decisions about your product, pricing, promotions, inventory, customer needs other aspects of your business.

Sales analysis can be as simple as reviewing your sales figures regularly. But it can also involve more complex statistical methods. Either way, the goal is to gain insights that will help you boost sales and improve your bottom line.

There are many ways to approach sales analysis. Some businesses use software that automatically crunches the numbers and produces charts and graphs. Others prefer to do things manually, using Excel or another spreadsheet program.

The most important thing is to review your sales data regularly and look for opportunities to improve your business. With sales analysis, you can make informed decisions that will help you grow your business and achieve your sales goals.

• Sales analytics
• Sales data analysis
• Sales revenue analysis

The Importance of Sales Analysis 

Sales analysis is a critical tool for businesses of all sizes. By understanding revenue-driving metrics , companies can make informed decisions, from pricing and product development to sales strategies and target markets. Essential metrics to analyze are sales volume, growth, mix, and trends.

Sales volume is the total number of sales made over a specific time. This metric can help assess whether a business is growing or declining.

Sales growth is the percentage change in sales volume from one period to the next, which can help determine whether a business is growing at a healthy rate.

The sales mix is the ratio of different products and services a business sells. This metric can assess whether a company sells a diversified product and service mix.

Sales trends are changes in sales volume over time. This metric can assess whether a business is experiencing seasonal or long-term sales patterns.

Sales analysis is a critical tool for businesses of all sizes. Companies can make informed decisions about growing revenue and increasing profits by understanding these sales metrics. 

Types of Sales Analysis

Sales analysis is a process that helps you to measure and manage your organization’s sales performance . The three most common types of sales analysis are:

1. Sales Forecasting

2. Sales Management

3. Sales Reporting

Sales Forecasting

Sales forecasting is the process of predicting future sales. This type of analysis is usually done internally by companies. For example, if a company wants to know how much revenue they expect to generate this year, they may forecast sales based on historical data. They might then compare those predictions with actual results to see how well they did. If their forecasts were off, they would have to take action to correct any problems in their sales processes or implement new sales enablement tools.

Sales Management

Sales management is the process of managing existing sales. Companies use sales management to ensure that they are meeting their sales targets. They also use it to identify areas where they need to improve the customer journey and accelerate the sales cycle length. For example, if they find that they are not growing revenue as expected, they could adjust prices, add new products., or enable their sales team with tools and strategies to optimize the sales process.

Sales Reporting

Sales reporting is the process of summarizing information about sales. Companies often use sales reporting to track sales progress and to communicate with investors or executives. For example, they may report monthly sales figures to shareholders so that investors can better understand how their investments are performing.

How to Use Sales Analysis Data

Sales data provides companies with a valuable source of data to make informed decisions about their sales operations and strategies. 

Sales data can be used in several ways, including:

• Analyzing customer needs and preferences
• Understanding buying patterns
• Tracking competitor activity
• Analyzing the customer journey and sales cycle
• Measuring sales team performance
• Improving marketing efforts
• Targeting new customers

Top Sales Analysis Metrics & KPIs

Sales analysis is a vital part of any business. It helps you understand what’s working and what isn’t so that you can make changes to improve your sales process. Here are the top KPIs for analyzing sales performance:

The most critical metric in sales is revenue, which is the money your company makes from its products or services. To calculate revenue, multiply the number of units sold by the price per unit.

Net Profit Margin

Net profit margin measures how profitable your company is. The net profit margin, also known as net margin, indicates how much net income or profit is generated as a percentage of revenue. It’s the proportion of total profits to revenue for a firm or sector.

Gross Profit Margin

Gross profit margin , also known as gross margin, measures your company’s efficiency at turning orders into revenue. Gross profit margin is a financial ratio that calculates the percentage of revenue that exceeds the cost of goods sold. The gross profit margin ratio is important because it allows investors and analysts to see how well a company performs relative to its costs.

Customer Lifetime Value (LTV)

Customer lifetime value measures how valuable your current customers are to your company. LTV is calculated by multiplying the average order size by the customer’s retention rate. The longer customers stay with your company, the more valuable they become.

The churn rate measures how often customers cancel their accounts. Churn rate is calculated by dividing the number of active users who have canceled their accounts by the total number of active users.

Retention Rate

The retention rate measures how long customers stay with your company after signing up. The retention rate is calculated by dividing active users by new users.

It’s also vital to analyze the sales pipeline to pinpoint areas where leads are not moving from one stage to the next. By tracking the correct data, you can better measure your sales pipeline performance and identify areas of improvement. Sales pipeline data to analyze include the number of leads generated, the number of qualified leads, conversion rates, average sales cycle length , average deal size , and win rates.

How Sales Analysis Reports Help 

Analyzing sales reports provides valuable insights into the business’s current state and helps organizations make informed decisions about strategies to improve sales performance. Ways to use sales analysis reports include:

• Evaluate sales deal data to make informed decisions about growing revenue and improving sales performance.
• Assess overall sales trends and determine whether growth is occurring.
• Understand what customer needs are being met and where opportunities for new product development may occur.
• Determine whether prices are realistic and align with customer demand.
• Examine which channels are performing well and where there may be opportunities for improvement.
• Assess the effectiveness of marketing campaigns.
• Identify areas of waste or inefficiency in the sales process.
• Benchmark performance against competitors.
• Generate reports to share with key stakeholders.

Sales analysis is a critical part of running a successful business. By reviewing sales deal data regularly, companies can gain valuable insights into their performance and make informed decisions to improve sales results.

Sales Analysis Tools

Sales analysis tools come in many different shapes and sizes. Some are designed to give you a general overview of your sales data, while others focus on specific aspects or types of sales data. The most common types of sales analysis tools include:

Sales reports: These provide a high-level overview of your sales data, typically including information such as total sales, average order size, and top-selling products or services.

Sales dashboards: These provide a more detailed view of your sales data, typically including information such as customer types, geographical regions, and sales by channel.

Sales performance analysis: This type of tool is designed to help you track and improve your sales performance, typically by providing information such as win/loss ratios and conversion rates.

Sales pipeline analysis: This type of tool is designed to help you manage your sales pipeline , typically by providing information such as lead conversion rates and deal size.

Customer profile analysis: This type of tool is designed to help you understand your customers better, typically by providing information such as customer types, buying habits, and demographic information.

The right sales analysis tool for your business will depend on a number of factors, including the types of data you need to track, the level of detail you need, and your budget. Some sales tools cover many of the use-cases above, such as CRM and CPQ. 

CPQ (configure price quote) software can help with sales analysis by providing accurate pricing and product configuration data. This data can be used to understand how customers are buying your products and how prices impact demand. Additionally, CPQ data can be used to evaluate the effectiveness of marketing campaigns and optimize future efforts.

Sales analysis is an important part of any sales organization. CPQ software can help make this process more efficient and accurate, resulting in better decision-making and improved sales results.

People Also Ask

Why do we do sales analysis.

There are several ways to do sales analysis, but the basic goal is always the same: to better understand your company’s sales so that you can make better decisions about how to grow your business. Sales analysis involves looking at which products are selling well, which markets are most profitable, and where you might be losing sales. In addition, it can help you make informed decisions about pricing, product development, marketing, sales operations , and other areas of your business by identifying opportunities and threats.

How do you analyze sales growth?

Sales growth can be analyzed by looking at overall sales figures, comparing sales figures to previous periods, and analyzing customer acquisition and retention rates. By understanding how sales grow, businesses can make more informed decisions about where to invest their resources. Overall sales figures can give you a broad overview of your business’s performance. You can track total revenue, average order value, and other key metrics to see how they trend over time. This can be helpful in spotting overall trends in your business. Comparing sales figures to previous periods can help you understand whether your business is growing or declining. By looking at year-over-year sales growth, month-over-month sales growth, or even day-over-day sales growth, you will see how your sales are trending, and you can make more informed decisions about how to grow your business Analyzing customer acquisition and retention rates can give insights into how well your business attracts and retains customers. For example, you can track how many new customers you acquire each period and how many existing customers you lose. This data helps identify whether your customer acquisition efforts are working and whether you’re at risk of losing customers.

What should sales analysis include?

Sales analysis evaluates sales data to make informed decisions to help sales reps win more deals , and help the company grow revenue. Some key factors to consider are: Sales volume: This is the total number of units sold over time which helps assess overall sales trends and growth. Sales mix: This refers to the types of products or services sold. This information can be useful in understanding customer needs and opportunities for new product development. Sales price: The average sale price can give insights into whether prices are realistic and align with the perceived value of the product or service. Sales expenses: This includes all costs associated with generating sales, such as advertising, commissions, and travel. Tracking sales expenses can help to identify areas where costs may be too high or where there may be opportunities for cost savings. Sales pipeline: This is a list of all potential sales that are in the process of being closed. The sales pipeline can help forecast future revenue and assess the health of the sales department.

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What is Sales Analysis?

Table of Contents

What is a Sale

A sale is an activity that generates profit or revenue for every business which consequently covers all the costs and expenses. Sale is very important for every organization. However, there are many ways to achieve the sale, easy and difficult both, they vary from business to business.

What is a Sales Analysis?

As the name implies sales analysis means analyzing the company’s sales over time. Different companies create sales analysis reports at different times; it might be on a daily basis, weekly basis, monthly basis, quarterly basis or annual basis. The purpose of sale analysis is to check the company’s performance and how it can be improved.

Importance of Sales analysis

Opportunities to expand your reach.

By analyzing the sales data helps us to see the opportunities that we have missed or couldn’t claim it in the past and how we can achieve it in the future. It also helps us to make better decisions like which product to keep (continue) and which to discontinue. Or rearrange market activities, change in the manufacturing process, inventory management and which scheme or offer to be launched or not.

Customer Analysis

It would be absolutely right if we say that sales analysis equals to customer analysis because it tells us the buying and shopping of our targeted customer and how he reacts to our product or service.

Product Mix Analysis

Whenever a company plans to launch a new product; it is actually based on the sales analysis which tells us market trends and customer’s buying pattern. Sale analysis also tells the timing of the product to be launched, seasonally or off seasonal, holidays or festivals, because customer’s buying pattern changes depending upon the timing and situation.

Decision Making

All the top management decisions are based on the sales analysis, for instance, if a product isn’t selling then the company will decide to discontinue the product. Back in 2005-2006, Nokia button pad phones were at their peak but the management of Nokia ignored sales analysis reports and growth of upcoming touchpad phones at the time. What happened? 10 years later, Samsung captured the whole market of touchpad phones which were once belonged to Nokia’s button pad phones. Why? Nokia’s management refused to make a decision based on the sales analysis report.

Types of Sales Analysis

Different companies use different types of sales analysis depending upon their requirements. Here are some such as;

Descriptive Analysis

It describes the product, link or channel of distribution isn’t selling well and how it could be improved, or it should discontinue.

Predictive Analysis

As the name implies, it foretells the future sales based on the current and past sales analysis reports and timing.

Product Analysis

The sale of different products is different at different times of the year. For instance, winter’s clothes are only sold in the winter, but not in summer. Summer clothes are only sold in the summer, not in the winter.

Sales Analysis Examples and Templates

The purpose of sales analysis is to get the exact results of profit by sales. Now, the question is how to present your data into some understandable format, here’s a link to some templates;

Template.Net

Template.net is a good place where you can find sales analysis templates in different formats like Word, PDF, and excel. These sales templates can help you to collect and analyze sales data.

Sampletemplates.Net

This website is another good example of marketing and sales templates. It is not possible to set targets for the upcoming period without a detailed analysis. This is a place where you can find desired templates to analyze your sales reports, revenue, loss or any other expense incurred.

How to Create Your Sales Analysis Report

Sales analysis report can help you to discover very valuable information; it could be whether to change the product, price or even launch some new product or service.

The difference between the financial statement and sales analysis report is that the financial statement only provides you sales records and numbers. Sales analysis report, on the other hand, also provides you the new opportunities to grow your business and how it can be improved along with the financial statement.

What You Want to Track

Sales analysis report provides you an opportunity to dig deeper through the surface of certain product, service or department. If you’re planning to create a sales analysis report, then your objectives must be outlined, such as;

• Repetitive sales to your targeted customers at one location
• Newly acquired customer in a given time period
• Frequently mentioning the purchases during the campaign.

How Frequently You Need Sales Analysis

Your company must decide how often they want to track their sales whether it is daily, weekly, monthly, quarterly, and so on because it gives you an overview of your previous sale. There must be more than one sales analysis reports with multiple variables.

How frequently your sales analysis reports should be; it depends on the nature and category of sale. As Gandy explains it that you want more frequent reports during the period of marketing promotions and in the season rather than in an ordinary typical month.

Set the Important Variable

You must know your key variables and how they are going to provide you the necessary data to achieve your objectives. Gandy suggests that one should drill down from top to bottom for more detailed variables like;

• Amount of sale

If you want to be more precise about your product line, service, and customer trends; then add some more detailed variables such as;

• Product number
• Gross margins of the product
• Category of the product
• Customer data like phone number, email address, and name
• Metrics for your sale campaign

Collect all the data (sales) from the sales point to customer management and put it into a spreadsheet.

Tabular and Graphically Representation

Once you have your required sales data in an excel spreadsheet. Now convert it into line graph or bar chart, it’s all automatic, just select the option and excel will the rest. This graphical representation will tell you that which of your sales variables are decreasing, growing, and maintaining a steady level. You can also compare your sales performance in a certain time period like a holiday, off-seasons, festivals, and etc. To check your sale performance from the historical perspective, you can track certain incrementing variables over the life of your product, service or business.

Analyze Your Results

Once your data is present in charts and graphs; then the final step is to analyze your sales report and look for market emerging patterns and trends and asks questions like;

• What mix (product & service) is bought by the customers collectively?
• When certain items of a mix (product or service) are being sold mostly?
• Does the buyer follow any seasonal trends? Or any pattern emerges?
• Repetitive customers and first-time customers are buying the same items of certain or different products?

Most importantly, notice the changes in your sales over a period of time. If some product or service isn’t performing, find out why and how it could be improved.

About The Author

Ahsan Ali Shaw

How Market Research Drives Success & Sales Through Customer-Centric Strategies

Market research is the first step towards understanding your target audience, your market, and the factors that influence purchasing decisions of the buyers.

But what does market research involve?

In this article, we will discuss what market research is, why businesses need it, the different types of marketing research, and real-life examples of successful market research done by companies.

Market research is the process of gathering crucial data on a company’s target market, industry, and competitors. Market research combines consumer behavior and economic trends to validate and enhance your company plan.

Marketing research  allows a business to identify its ideal customer and gauge customer demand for its offerings. Companies can offer superior goods, enhance the customer experience, and create an effective marketing plan to attract new customers.

Marketing Analysts

Marketing analysts evaluate data to support a company’s marketing. They can help companies increase revenue or optimize marketing initiatives with their expertise.

Marketing analysts  clean, sort, and analyze data. In particular,

• Collecting, cleaning, and classifying data using techniques such as surveys or website analysis
• Reviewing marketing campaign results to enhance efforts (such as revenue growth, reach, or engagement)

Product Marketers

A Product Marketer, or Product Marketing Manager, promotes a company’s products and services to the appropriate demographic. They are responsible for researching the company’s offerings, identifying selling points, and developing promotional strategies.

A marketer’s primary task is to convince potential buyers of the product’s worth. The following marketing research strategies  and ideas help to accomplish this objective:

• Choosing which marketing materials to produce and share
• Planning and executing promotional spending plans
• Using collaborators in the content creation process to generate material that accurately represents the product and brand
• Organizing and managing a publication schedule

Content Marketers

A content marketer’s responsibilities span a wide range, including information gathering, strategy development, content production, and promotion.

By keeping tabs on industry trends, keywords, target audiences, content gaps, and best practices (in terms of SEO, auditing existing content, and using analytics), a content marketer may better attract leads and convert them into customers.

A content marketer’s  responsibilities might expand to include market research and content performance analysis, depending on their level of expertise.

Social Media Marketers

A social media marketer is a professional in advertising who uses social media sites to spread the word about a business’s products and services. Social media sites like Facebook, Instagram, Twitter, and TikTok frequently advertise to a broader audience, foster relationships with present consumers, and provide brand-new offerings.

As a social media marketer,  you can be responsible for the following duties:

• Manage an organization’s social media strategy
• Post social media updates with copywriters and designers
• Track social media data to improve performance
• Follow social media trends, technology, laws, and best practices
• Address user comments and messages
• Social listening technologies can reveal a company’s social media reputation

All Marketers

All marketers use market research to figure out whether or not a new product or service will be successful. The findings may be applied to modify the product’s design and improve the launch plan.

Information obtained to identify market segmentation might fall under this category. It also influences how to differentiate products, which then gets used to customize advertising.

To finish the market research process, a company does various things. Information is gathered based on the market segment that the product is targeting. This data is then evaluated, and pertinent data points are interpreted to conclude how the product may be created and sold to the target market group most effectively.

Market research lets you get to know your most important stakeholder, your consumer. Focus on your consumers’ wants, requirements, and preferences — survey current consumers about your product’s delivery and functioning.

Let’s take a look at the many uses of market research, as well as the pros and cons of using market research.

Keep Your Focus On The Customer

The first step in making your company customer-centric is conducting thorough market research to learn more about your target audience.

You may learn about the wants and needs of your target audience and other relevant details through market research. You need to know your customers to build a customer-centric business, and market research helps you meet clients’ wants and preferences. Customers and your company can both benefit from this situation.

Improve Audience Engagement

Understanding your target clients helps you reach them better. A well-planned marketing effort saves time and money.

To properly engage with your audience, you must customize your marketing materials. Your tone, aesthetics, and product characteristics should communicate to your target demographic. When you “speak their language,” customers are more inclined to listen.

Recognize Potential For Growth

Market research is crucial for every business, not just startups or those introducing new items to the market. Market research should be conducted regularly to help identify and capitalize on growth prospects.

Testing Ideas Reduces Risks

Ensuring product demand is an effective risk-reduction strategy.

If you want to know if your product idea will sell, you must conduct serious market research. Never build a product on a hunch due to the risk involved. Having a proof of concept gives you greater confidence in your efforts and increases your chances of successfully attracting investors.

Make Decisions Based On Data

The results of market studies allow businesses to make educated, data-driven decisions. These results can serve as a map that directs a company’s decisions toward attracting and keeping its ideal consumers.

Perform Better In The Field Of Competition

Doing thorough market research might give you a leg up on the competition. One benefit of customer knowledge is the potential to outperform the competition in customer engagement. Also, by learning more about the competition, you can better assess where you are in the market.

Some important uses of market research are:

Demand Forecasting

Businesses may benefit from marketing research to better anticipate what consumers will want. Through various methods, it helps companies manufacture just the appropriate amount of items to meet expected demand.

Sales Analysis

With the use of marketing research, companies may evaluate their sales figures. It reveals which products are moving well, whether or not the sales team is doing their job, which supplies need to be stocked more, and how much capacity to build.

Advertising Research

Effective and efficient advertising mediums may be determined using marketing research. According to the advertising objectives of the business, it evaluates the ad’s topics, appeals, headlines, communication clarity, attention value, etc.

Positioning Research

Market research may help determine where a product, service, or brand should be positioned in the marketplace. Businesses can position their items in the market better because of the data it collects and offers about potential clients.

Market Segmentation

Information on the market is gathered and relayed to businesses using this method. It’s how companies learn essential details about their prospective clients, allowing them to divide the market into niches.

Product Research

Market analysis plays a crucial role in the product development process. Supplying data on market trends, product testing, and an analysis of the company’s present product mix helps businesses develop the best possible products.

Pricing Research

Market analysis helps companies determine the best-selling prices for their goods. Competitive pricing tactics, consumer price expectations, and the influence of external variables on pricing decisions may all be gleaned via marketing research.

Distribution Research

Learning how best to get goods to people as quickly as possible is the goal of this study on distribution methods. Distribution channels are analyzed and identified as a part of marketing research to select the most effective market intermediaries, lower distribution costs, and measure the channels’ efficacy.

Customer Satisfaction Research

This involves speaking to consumers about their brand-related buying experiences. Marketing research aims to learn how customers feel about the items a business offers.

Market research is crucial for more than just making some positive assumptions. As stated above, market research is beneficial, and not doing it might cost your company in the following ways:

Never Learning Your Competitive Advantages

Market research lets companies optimize practically every process. It highlights what processes or activities are on-brand, lean, and practical while also highlighting things your competitors may be doing you can incorporate, siphoning clients, growing market share, and gaining competitive momentum.

Avoiding Customer-Centric Marketing

Market information helps companies understand customers. Consistent customer and market segmentation is an art and a science. Companies may learn new sales tactics, create more effective brand messaging and commercials, and spend more on customer-facing platforms and contact points via customer-focused market research employing focus groups, surveys, interviews, field studies, and more.

Strategic & Operational Risk Rising

Market research helps businesses avoid making rash judgments. Organizations know what works internally and outside. With this data, they may adjust procedures and allocate resources to:

• Improve budget cycles
• ROI decision-making
• Accelerate product or service launches
• Improve product or market entrance strategy

Cannot Make Data-Based Enterprise Decisions

Enterprise choices based on real-world, credible facts inspire more confidence. Therefore, stakeholders have higher trust in company decisions that:

• Have more preemptive, not reactive, plans, patterns, and actions.
• Improve competition prediction.
• Improve customer prediction.
• Reduce market anomalies and improve response.

While big data has revolutionized how researchers acquire and analyze data, study design remains mostly unchanged. The three main categories of market research are outlined below.

3 Types Of Marketing Research

Exploratory research.

Exploratory research uncovers subject-related data and perspectives for companies. It seldom gives enough data to make market judgments, but it allows organizations to establish stronger research objectives for future studies.

Exploratory research often employs qualitative methods, including consumer and expert interviews, focus groups, and secondary sources like books, syndicated reports, and trade publications.

Customer feedback may be gathered and discussed in online groups. Idea Exchange  is a closed, members-only network that Hallmark established to learn more about how their customers engage and speak about its products.

The community members stepped in to teach the greeting card company how to speak the customer’s language through online surveys, which Hallmark then implemented in its marketing strategy.

Descriptive Research

Descriptive research helps companies make decisions and track progress. It uses a standardized framework with close-ended questions to obtain quantitative data for statistical analysis. Surveys, questionnaires, and some experiments can offer the data needed to draw conclusions, take action, and track evolving attitudes and behaviors.

This can gather customer demographics, assess a product’s market potential, or track a target group’s attitudes and behaviors. They can draw market-wide inferences from the data obtained.

Apple is among the world’s top technological corporations. Apple could do this because of its dedication to product innovation and customer market research. Apple’s in-house research team is evidence of the company’s devotion to the discipline.

The Apple Customer Pulse  is an online community dedicated to meeting the needs of tech consumers through data analysis and market research gleaned from a wide range of customer satisfaction surveys.

These surveys have allowed Apple to refine and improve its products in response to customer feedback. Apple, for example, has made several of its gadgets with larger screens to enhance the viewing experience for its users.

Causal Research

Companies employ causal research methodologies to determine a cause-and-effect link between variables. Descriptive and causal research is quantitative. Instead of reporting, researchers utilize experiments to predict and test ideas about a company’s goods and marketing.

For example, an organization could experiment with packaging or advertising to see how it affects sales. Causal research can be helpful, but it’s impossible to isolate and prove any one variable’s potential to cause any given impact. Thus, its results should be moderated by other studies.

Dove’s successful #SpeakBeautiful campaign was sparked by the discovery that female Twitter users are twice as likely to post a critical self-review  than a positive one.

The #SpeakBeautiful campaign, launched by the soap company in collaboration with Twitter in 2015, was substantially informed by data gleaned from social media listening. The number of negative tweets has decreased from 5 million in 2015 to 3.4 million in 2016, a fall of 36.8 percent. Overall, the campaign was a big success for the company, with the hashtag being used more than 168,000 times.

4 Methods For Conducting Primary Research

Primary research has several methods. The best strategy depends on your questions and situation. The major market research methodologies are interviews, surveys, focus groups, and observations.

Interviews are phone or in-person one-on-one or small group question and answer sessions. Interviews are best for gathering plenty of data from a small sample. Interviews with specialists are common. To clarify personal research, ask follow-up questions.

When a big audience has to respond, internet surveys using paid or accessible technologies are convenient and cost-effective. Pre-written questions provide respondents minimal freedom if their answer doesn’t fit (making it more difficult to skip questions), and response rates can vary. If a survey is too long, participants may grow bored and leave. Short surveys don’t capture enough data.

Focus Groups

Focus groups acquire data from a small group of subject matter specialists. To discuss ideas, the group talks. Businesses use this strategy to research specialized markets and clients.

Observations

By observing and taking notes, observations are unbiased. This strategy avoids direct researcher-subject contact. This strategy eliminates interview or survey bias by observing actual reactions. Cameras or skilled observers can be employed for this purpose.

Where To Find Secondary Research

Secondary research is a study that has previously been conducted by others and published. Publications from regulatory bodies, industry groups, and competitors are included. Because of the time and cost reductions associated with secondary research, it is typically the method of choice for startups and other businesses operating on a tight budget.

Using the right search phrases, you can find an abundance of useful secondary sources on the Internet, but that wouldn’t be enough to take your marketing research process  to the next level. Secondary sources also include magazine and newspaper articles, trade journal and industry publication content, reference library use, and communication with relevant professional groups.

Government entities often provide outstanding secondary research data for no cost. In contrast, accessing data released by private companies may need authorization or payment.

The 4 C’s Of Marketing Research

The 4 C’s of Marketing are Customer, Cost, Convenience, and Communication. These four factors are what ultimately decide a business’s success or failure.

Customer: The customer is at the center of each successful marketing plan. If customers don’t buy what you’re selling, you won’t make any money. Satisfying customers should be a company’s first priority since it may result in substantial financial gains.

Cost: Cost is an important aspect of marketing since it requires time and resources to build a strong brand and communicate effectively via many mediums.

Convenience: Marketing may be simple or difficult, depending on the specifics of your business and the people you’re trying to reach. In a nutshell, the complexity of your business directly correlates to the likelihood that you will need to invest resources into advertising.

Communication: Last but not least, effective communication is critical for every company’s success since it facilitates the development of a loyal customer base.

How To Conduct Marketing Research

1. interviews.

The term “market research interview” refers to any method for gathering information from a respondent in the context of market research. Interviews can range from brief conversations on the street to lengthy discussions in a focus group or the telephone (in the form of a tele-depth).

Make use of questionnaires and surveys to learn more about your target audience. You can learn a lot about your audience by observing your customer’s habits and noting their broad tendencies and preferences.

The survey participants may not always be honest, but this is an attempt to collect information. Just make it clear that these are the findings from the survey and not universal truths.

We’re all intrigued by others’ thoughts. Participants may help you answer that question and contribute to the development of your market research through surveys.

3. Focus Groups

A focus group is a research technique that involves interviewing a small group of people in an organized and controlled setting. The sample is selected according to a set of predetermined demographic characteristics, and the questions are crafted to elicit useful information.

Observations of the group dynamic might inform future studies on consumer decisions, goods, or contentious subjects, participants’ responses to focus group questions, and even participants’ body language.

Compared to one-on-one interviews, focus groups are less intrusive, more organic, and simpler to conduct than experiments or large-scale surveys.

4. Observations

Observational marketing research is a qualitative way of gathering and interpreting information collected by directly or indirectly viewing and observing other people in natural or prepared contexts. This can be done as part of the research process for marketing products or services. It’s the first (and sometimes only) thing that’s done when starting a new marketing effort.

To achieve the highest quality and most useful findings, social research techniques and observational research methods can be carried out covertly or openly. In addition, researchers may choose to take part in the activity in order to offer a more informed report.

Starbucks Coffee Company

Starbucks ‘ business decisions are informed by market research in the form of consumer feedback. In 2008, Starbucks launched “ The Idea Platform ” to collect customer feedback. It was wildly successful, yielding invaluable insights into consumer habits and tastes. The company still welcomes client feedback through suggestions for future products or services, suggested modifications, requests to reintroduce discontinued items, etc.

The following are components of Starbucks’ approach to market research:

• Keeping tabs on cultural shifts
• Keeping tabs on online activity
• Collecting comments from the public
• Testing merchandise in-store

The American company Zappos  sells shoes and apparel online. Market research methods tried and tested by Zappos, such as surveys and in-person interviews with customers, allow for excellent customization of its products for their customers.

The secret to Zappos’s sustained success is treating consumers like genuine people, not just another number. In-depth interviews and customer satisfaction surveys were developed for this same reason.

By conducting in-depth surveys and conversations with customers , Zappos is able to hone in on their specific wants and requirements. Using these methods, businesses may better connect with and meet the demands of their customers.

More people, according to studies, are interested in eating nutritious fare. KFC  has responded by forming a partnership with Beyond Meat, a company that makes vegetarian meat alternatives. In August 2019, KFC began selling a limited quantity of Beyond Meat fried chicken  to the public for testing purposes. In about 5 hours, the Beyond Fried Chicken completely sold out. KFC saw a growing need for vegetarian and vegan choices and quickly adapted by expanding its menu to include them

The LEGO Group

LEGO  has traditionally catered to male consumers because of its focus on construction toys. But LEGO didn’t want to restrict itself to serving only one gender. Its goal was to get all kids interested in its products.

LEGO studied the play behaviors of 3,500 girls and their moms  over the course of four years. This method proved quite useful for estimating the potential of entering a new market.

In response to the market research findings, LEGO introduced a new toy brand called “ Friends ,” aimed squarely towards girls and women.

Market research informed LEGO’s decision to use primary colors and make the figures relatively large. LEGO was able to take advantage of this to broaden the appeal of its merchandise to girls.

Marketing91

What is Sales Analysis? Why is it important?

June 12, 2023 | By Hitesh Bhasin | Filed Under: Marketing

For every company , Sales is the ultimate revenue generator which takes care of all costs and expenses. While Sales may be achieved easily or in some cases in a very difficult way, analysis of the Sale that has materialized is very important.

Not only the how but also the why a particular sale has happened and why not has a sale not happened along with a periodic comparison of achieved Sales is very important for the organization. This helps them to give a logical answer of Sales instead of relying on gut-feeling. That is why Sales analysis is carried out from time to time. If you have heard about Sales reviews, then it is nothing but sales analysis carried out as a timely activity. 

Table of Contents

What is Sales analysis?

As the name suggests, sales analysis involves analysing the sales made by a company over a period of time. Many companies have a weekly sales analysis, a monthly sales analysis or a quarterly sales analysis. A regular sales analysis helps the company understand where they are performing better and where they need to improve.

Every company has a sales target which its salesmen have to achieve. If the target was to be achieved in a month, then on the 15th day of that month, the salesmen should know where they stand. This is where sales analysis plays it role. It helps determine where the company stands in terms of sales and then helps in sales strategy to reach a predetermined goal.

Sales analysis is done from the bottom level to the top level of the company. Even the CEO of the company does a sales analysis to understand segments where the company is gaining in sales and segments where it is dropping in sales. Such sales analysis can also help product development.

Importance of Sales Analysis

1) Missed opportunities :

Analyzing the available data can show the company where it has missed the opportunity and if or not that can be claimed. Market research will play an important role in this presenting data to compare while the field force will prove of valuable assistance in informing the practicalities of the situation.

2) Future decisions :

Sales data will help a company to take a future decision in terms of inventory management , marketing activities, schemes or offers to be rolled and changes in manufacturing processes if applicable. Based on Sales data, major decisions like continuing or discontinuing a product is taken. Those future decisions will help the external stakeholders of the company to decide whether or not to invest in the company.

3) Market Trends :

Sales analysis will also show the current market trends to the company. While the company may be preparing to launch a new product, Sales Analysis would show a drastic increase in Sales of the earlier product after an activity, showing that it was the lack of awareness which was a hindrance in realizing Sales and not the product. Also, Sales of a certain product may skyrocket during a festival or decrease seasonally.

4) Customer analysis :

 Effectively, Sales Analysis is nothing but Customer Analysis . Answering why did a particular customer buy the product in a particular month may give crucial customer insights which will help with the planning of the company.

5) Detailed analysis :

A detailed Sales Analysis is broken down product wise, customer wise, year and month wise and geography wise is a source of huge information for the company.

Types of Sales Analysis:

Although many companies may use various types tailored to fit their organization, here are the few common types of Sales Analysis performed :

1) Periodic Analysis :

This can be a month on month or year on year or year till date compared to previous year till date as the need may be. This gives insight into the impact of time on sales.

2) Product wise Analysis :

Sales of products during different times in different areas can be used. This is majorly used in large-scale equipment.

3) Channel of distribution wise :

 This will give the trend of where the sales are maximum and answering Why will give more insights and help the company decide whether or not to continue with the current channel of distribution .

4) Forecast vs Achievement analysis :

This gives the details of sales which were used to forecast the numbers – and inventory was arranged accordingly – and what is the actual achievement of Sales – and whether the inventory needs to refilled or schemes need to be rolled out for the liquidation of stocks.

5) Combination of above :

For more detailed analysis, the company may perform a combined analysis of above for example multinationals like Proctor and Gamble may analyze the Sales of Tide detergent in Asia Pacific region for the year 2018 and compare it with Sales of the year 2017. This involves Product as well as periodic sales.

Advantages of Sales Analysis :

1) Opportunities :

 Sales analysis of own products as well as competitor products is important as analyzing sales of competitors allows insights into the market from a different perspective and may help the company to reach the missed out customers and grab the missed opportunity.

2) Decision driver :

 Sales analysis, as explained above acts a decision driver for the company to make major changes in their products. If the Sales of a product are not up to the mark, the company may discontinue the product with immediate effect. For example, as the Sales of Touchscreen phones increased all the traditional button models changed their phones to touch screens. With the advent of Facebook and Twitter , earlier sites like Orkut had to be shut down because of lack of revenue and shift of audience from one platform to other.

3) Customer Service :

 Knowing the reason behind why a particular sales occurred during particular time will help the companies to keep the inventory ready and help them to serve the customers better. Delighting the customers will, in turn, benefit the company by increased sales further and help to develop goodwill and establish the brand value of the company.

4) Marketing support :

Sales of a certain product may require one-time marketing support or multiple times or seasonal support. Those decisions are taken based on Sales analysis. For example, products like cough syrup would require marketing and ad campaigns just before and during winter while airline services require constant marketing support.

Disadvantages of Sales Analysis :

1) reliability :.

A lot of times, Sales Analysis might have done in a haphazard way or the reasons for the increase in sales of a particular product may go up purely on the effort of the Salespersons or offers rolled out. This may have nothing to do with customer or trends and relying on those conclusions can be problematic for the company.

2) Political factors :

12 countries in Europe introduced a single currency in 2002 which caused temporary disruption of the economy. In such cases, even though the trend may say that the Sales is supposed to increase, owing to unavailability of purchasing power of customers, the company may face a dip in sales. The following year to this incident when the economy may again stabilize, comparing previous years’ data will show askew results again since the customers are purchasing normally as per their requirement but there would be a tremendous growth in the analysis.

3) Technical knowledge :

High technical knowledge is required for Sales Analysis and not everyone may be suited to do that. Good arithmetic skills along with high market knowledge are basic requirements and those may not be fulfilled by every Salesperson.

A detailed Sales Analysis along with its interpretation is outsourced by many companies. The dedicated firms or software may be costly which the company would have to bear regularly. Also, the privacy of data would be compromised when sharing the Sales data to the third party. A Sales analysis performed by an internal employee instead of outsourcing would increase the cost of the firm in terms of salary, training the person for technical knowledge and there are chances of human error in Manual Sales Analysis.

Liked this post? Check out the complete series on Sales

Related posts:

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• What is Primary sales, Secondary sales and Tertiary sales and what factors determine them?
• Why customer reviews and recommendations are most important nowadays?
• What is the Importance of Marketing Mix and why are the 4 P’s important?
• What is Brand Activation & Why is it Important?
• Importance of Retailing – Why Retail is Important?
• Brand Strategy – Steps, Components and Why it is Important for Business
• What is Authenticity and Why it is Important?
• What are Research Skills? And Why are they Important?
• What is Service Excellence? And Why it is Important & excellent

About Hitesh Bhasin

Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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The Strategic Value of Regression Analysis in Marketing Research

by Michael Lieberman , on December 14, 2023

Regression analysis offers significant value in modern business and research contexts. This article explores the strategic importance of regression analysis to shed light on its diverse applications and benefits. Included are several different case studies to help bring the concept to life.

Understanding Regression Analysis in Marketing

Regression analysis in marketing is used to examine how independent variables—such as advertising spend, demographics, pricing, and product features—influence a dependent variable, typically a measure of consumer behavior or business performance. The goal is to create models that capture these relationships accurately, allowing marketers to make informed decisions.

Benefits of Regression Analysis in Marketing

• Data-driven decisions : Regression analysis empowers marketers to make data-driven decisions, reducing reliance on intuition and guesswork. This approach leads to more accurate and strategic marketing efforts.
• Efficiency and cost savings : By optimizing marketing campaigns and resource allocation, regression analysis can significantly improve efficiency and cost-effectiveness. Companies can achieve better results with the same or fewer resources.
• Personalization : Understanding consumer behavior through regression analysis allows for personalized marketing efforts. Tailored messages and offers can lead to higher engagement and conversion rates.
• Competitive advantage : Marketers who employ regression analysis are better equipped to adapt to changing market conditions, outperform competitors, and stay ahead of industry trends.
• Continuous improvement : Regression analysis is an iterative process. As new data becomes available, models can be updated and refined, ensuring that marketing strategies remain effective over time.

Strategic Applications

• Consumer behavior prediction : Regression analysis helps marketers predict consumer behavior. By analyzing historical data and considering various factors, such as past purchases, online behavior, and demographic information, companies can build models to anticipate customer preferences, buying patterns, and churn rates.
• Marketing campaign optimization : Businesses invest heavily in marketing campaigns. Regression analysis aids in optimizing these efforts by identifying which marketing channels, messages, or strategies have the greatest impact on key performance indicators (KPIs) like sales, click-through rates, or conversion rates.
• Pricing strategy : Pricing is a critical aspect of marketing. Regression analysis can reveal the relationship between pricing strategies and sales volume, helping companies determine the optimal price points for their products or services.
• Product Development : In product development, regression analysis can be used to understand the relationship between product features and consumer satisfaction. Companies can then prioritize product enhancements based on customer preferences.

Case Study – Regression Analysis for Ranking Key Attributes

Let’s explore a specific example in a category known as Casual Dining Restaurants (CDR). In a survey, respondents are asked to rate several casual dining restaurants on a variety of attributes. For the purposes of this article, we will keep the number of demonstrated attributes to the top eight. The data for each restaurant is stacked into one regression. We are seeking to rank the attributes based on a regression analysis against an industry standard overall measurement: Net Promoter Score.

Table 1 shows the leading Casual Dining Restaurant chains in the United States to be used to ‘rank’ the key reasons that patrons visit this restaurant category, not specific to one restaurant band.

Table 1 - List of Leading Casual Dining Restaurant Chains in the United States

In Figure 1 we see a graphic example of key drivers across the CDR category.

The category-wide drivers of CDR visits are not particularly surprising. Good food. Good value. Cleanliness. Staff energy. There is one attribute, however, that may not seem intuitively as important as restaurant executives might think. Make sure your servers thank departing customers . Diners seek not just delicious cuisine at a reasonable price, but they also desire a sense of appreciation.

Case Study – Regression and Brand Response to Crisis

A major automobile company has a public relations disaster. In order to regain trust in their brand equity, the company commissions a series of regression analyses to gauge how buyers are viewing their brand image. However, what they really want to know is how American auto buyers view trust—the most valuable brand perception of this company’s automotive product.

The disaster is fresh—a nation-wide recall of thousands of cars over safety issues regarding airbags—so our company would like a composite of which values go into “Is this a Company I Trust.” Thus, it surveyed decision makers, stake holders, owners, and prospects. We then stack the data into one dataset and run a strategic regression. Once performed, the regression beta values are summed and then reported as percentages of influence on the dependent variable. What we see are the major components of “Trust.”

Figure 2 - Percentage Influence of "A Company I Trust"

Not surprisingly, family safety is the leading driver of Trust. However, we now have Shapley Values of the major components. These findings would normally be handed over to the public relations team to begin damage control. Within days the company began to run advertisements in major markets to reverse the negative narrative of the recall.

Case Study - Regression Analysis/Maximizing Product Lines

SparkleSquad Studios is a fictional startup hoping to find a niche among tween and teen girls to help reverse the tide of social media addiction. Though funded through venture capital investment, they found that all their 40 potential product areas, they only have capacity to produce eight. In order to determine the top 8 hobby products in demand, they fielded a study.

Table 2 - List of Potential Product Area Development

SparkleSquad Studios then conducted a large study gathering data from thousands of web-based surveys conducted among girls aged 10 to 16 across the United States. The key construct of the study is simple—not more than 5 minutes—and concise to cater to respondents' shorter attention spans. Below are the key questions.

• How much money do you typically allocate to hobbies unrelated to social media in a given month?
• Please check-off the hobbies that interest you from the list of 40 potential options below.

Question 1 serves as the dependent variable in the regression. Question 2 responses are coded into categorical variables, 1=Checked, 0=Not Checked . These are the independent variables.

Results are shown below in Table 3.

Table 3 - Top 10 Hobby Products for Production Determined Through Regression Analysis

Based on the resulting regression analysis, SparkleSquad will commence production of ten statistically significant products. The data-driven approach ensures these offerings meet the maximized determined market demand.

Regression analysis gives businesses the ability to predict consumer behavior, optimize marketing efforts, and drive results through data-driven decision-making. By leveraging regression analysis, businesses can gain a competitive advantage and increase their efficiency, and effectiveness. In an era where consumer preferences and market conditions are in constant flux, regression analysis remains an essential tool for marketers looking to stay ahead of the curve.

Michael Lieberman is the Founder and President of Multivariate Solutions , a statistical and market research consulting firm that works with major advertising, public relations, and political strategy firms. He can be reached at +1 646 257 3794, or [email protected] .

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Study: Americans need a six-figure salary to afford a typical home in nearly half of U.S. states

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If you want to buy a house this year, it’ll require a larger slice of your income.

It’s a harsh reality that Allison Dunbar, a product development coordinator and aspiring homeowner in Pittsburgh, quickly realized while speaking to her oldest brother about his homebuying experience in the same city a few years ago.

“He bought his house in Pittsburgh in 2018, and he got a very nice house in a nice area that fits his family now for $20,000 under asking,” Dunbar says. “That is not a thing in Pittsburgh anymore.”

A combination of high mortgage rates , rising home prices and low housing inventory over the last two years is pushing homeownership further out of reach for would-be homeowners, especially first-timers. To afford a median-priced home of $402,343, Americans need an annual income of $110,871, according to a new Bankrate analysis. That’s nearly a 50 percent increase in just the last four years.

To better understand the housing affordability crunch across the U.S., Bankrate also calculated how much aspiring homeowners need to earn annually to afford a median-priced home in all 50 states and the District of Columbia, compared to four years ago. Bankrate’s analysis found Americans need to earn six figures to afford a median-priced home in 22 states and the District of Columbia. Four years ago, only six states and the District of Columbia required a salary that high to afford a median-priced home.

Curious about your state? Here’s the annual salary you need to afford a typical home in 2024.

Affordability is the biggest issue — finding a home that’s in your budget. The higher the price of a home, the harder it is to come up with the down payment or to qualify for the monthly payment. Home values are near record highs, and if you want a house, you have little choice but to pay a high price. — Jeff Ostrowski | Bankrate housing market analyst

Bankrate’s key takeaways on housing affordability

• To afford a median-priced home of $402,343, Americans need an annual income of $110,871, up 46 percent since the start of 2020. Americans must earn at least $100,000 annually to afford a median-priced home in 22 states and the District of Columbia.
• Aspiring homeowners in the West and Northeast need the most income to afford a typical home. Anyone looking to buy in California, Hawaii, District of Columbia, Massachusetts and Washington must earn between $156,814 and $197,057.
• Aspiring homeowners in the South and Midwest need the least income to afford a typical home. Anyone looking to buy in Mississippi, Ohio, Arkansas, Indiana and Kentucky must earn between $63,043 and $65,186.
• The five states where the annual income needed to afford a typical home has increased the most since the beginning of 2020 are Montana (+77.7%), Utah (+70.3%), Tennessee (+70.1%), South Carolina (+67.3%) and Arizona (+65.3%).
• The five states where the annual income needed to afford a typical home has increased the least since the beginning of 2020 are North Dakota (+9.2%), the District of Columbia (+24.6%), Louisiana (+24.9%), Illinois (+27.2%) and Kansas (+29.3%).

Affordability is the biggest challenge for aspiring homeowners

Buying a home has become increasingly expensive, and millions of Americans, especially young people, feel locked out of homeownership. Twenty percent of aspiring homeowners think they will never be able to save enough to purchase a home, according to Bankrate’s Down Payment Survey .

Part of the reason is because wages haven’t kept pace with home prices. Would-be homeowners have to make $110,871 annually to afford a median-priced home ($402,343 per Redfin) in the U.S., according to Bankrate’s calculations. That’s almost a 50 percent increase since January 2020 when potential homebuyers only required an annual income of $76,191 to afford a typical home. Wages grew 23 percent between the fourth quarter of 2019 and November 2023, according to a Center for American Progress analysis of Bureau of Labor Statistics data.

At the state level, aspiring homeowners have to earn six figures to afford a typical home in 22 states and the District of Columbia, including many Western states that boomed during the pandemic, such as Utah, Montana and Idaho. Four years ago, only the District of Columbia and six states — California, Hawaii, Massachusetts, New York, New Jersey and Washington — required a six-figure salary to afford a typical home.

A surge in mortgage rates has caused the income needed to afford a median-priced home to increase everywhere nationwide. Mortgage rates jumped more than three full percentage points in the last few years. In January 2020, the average 30-year fixed rate was 3.68 percent, compared to 7.07 percent as of March 20, according to Bankrate’s survey of large lenders .

Keep in mind: Your mortgage interest rate can be the difference between spending or saving hundreds of dollars annually when purchasing a home. For example, if you locked in a 3.68 percent interest rate on a $250,000 home a few years ago and put down 20 percent, your monthly payment would've been close to $1,400. A 7.07 percent interest rate on that same home with a 20 percent down payment now equates to a monthly mortgage payment of roughly $1,800.

American families have to contend not only with elevated home prices and high mortgage rates but also with a  shortage of houses . Many homeowners who locked in ultra-low low mortgage rates during the pandemic are staying put to avoid today’s soaring mortgage rates, shrinking the pool of available homes for sale.

“Over the past few years, the supply of homes has been constrained by a number of factors, including muted homebuilding and the lock-in effect,” Ostrowski says. “But demand for homes has been growing, and there are more buyers than sellers.”

First-time homebuyers Dunbar and her husband know this reality all too well. After saving up for a down payment for five years and receiving inheritance money from a relative, Dunbar and her husband decided at the end of 2022 they were ready to buy a home. Since then, they’ve made offers on six houses, but none have panned out.

When you’re trying to buy a home for the first time, it’s hard to compete. It doesn’t feel like a shiny, picturesque experience. It’s taxing and time-consuming and you get burnt out from the process. — Allison Dunbar First-time homebuyer based in Pittsburgh, PA

Where you need the most and least income to afford a typical home in the U.S.

Bankrate’s analysis found aspiring homeowners in the West and Northeast need the highest salaries to afford a typical home, whereas aspiring homeowners in the South and Midwest can afford a typical home on much lower incomes. That’s correlated with higher home prices in Western and Northeastern states and lower home prices in Southern and Midwestern states.

Take California, Hawaii, the District of Columbia, Massachusetts and Washington, for example. Anyone who wants to buy a home in those states in 2024 has to earn a minimum salary of $156,000 annually. Out of all 50 states and the District of Columbia, California requires the highest annual salary to afford a typical home at  $197,057, followed by:

• Hawaii: $185,829
• District of Columbia: $167,871
• Massachusetts: $162,471
• Washington: $156,814

The Rust Belt and Sun Belt are the most affordable regions in the country for housing. Ostrowski says the Sun Belt, in particular, has experienced an influx of new homebuyers in the past few years . While the migration shift to the Sun Belt has made housing less affordable than it used to be, it’s “good for long-term homeowners in those regions,” he adds.

“That trend has been going on for decades, and it has intensified,” he says. “Meanwhile, some bargain-hunting buyers have moved to affordable markets in the Rust Belt and the Midwest.”

People looking to buy in Mississippi, Ohio, Arkansas, Indiana and Kentucky must earn at least $63,000 in 2024 to afford a median-priced home. Mississippi requires the lowest income to afford a home in the U.S. at $63,043, followed by:

• Ohio: $64,071
• Arkansas: $64,714
• Indiana: $65,143
• Kentucky: $65,186

Income needed for a typical home purchase jumped over 50 percent in nearly half of the U.S. since 2020

The annual salary needed to purchase a median-priced home has increased over 50 percent in 22 states since January 2020 — with Montana, Utah, Tennessee, South Carolina and Arizona experiencing the biggest jumps.

At the start of the COVID-19 pandemic, Americans quickly fled from city centers and dispersed to more remote parts of the country. Western cities like Boise, Provo and Phoenix experienced intense population booms , and their home prices skyrocketed. Something similar happened in the Southern part of the U.S. during the pandemic: Many people, particularly those living in dense metro areas, flocked to Austin, Texas and Cape Coral, Florida, which offered warmer weather, cheaper and more spacious housing and growing economies with job opportunities.

States with struggling job markets, stale economies and declining populations, like North Dakota, Louisiana and Illinois, have seen the smallest increases in income needed to purchase a median-priced home over the last four years.

“It’s all about home price appreciation,” Ostrowski says. “The states with the most dramatic increases in income needed to afford a home have experienced above-average appreciation in recent years, while those at the bottom of the list have seen much more modest rises in home prices.”

5 states where income required to afford a typical home grew the most

People looking to buy in Montana have to earn 77.7 percent more than four years ago to afford a median-priced home there — the biggest percent increase across all states. Homebuyers in Montana must earn $131,357 annually to afford the state’s typical monthly mortgage payment of $3,065. The median home price in Montana was $507,100 as of January 2024, compared to $299,300 in January 2020.

Utah’s booming real estate market is also making homeownership unaffordable for many younger Americans in the state. Utah has experienced the second-biggest increase since January 2020 in income required to purchase a median-priced home, at 70.3 percent.

People looking to buy in Utah must earn $133,886 annually to afford the state’s typical monthly mortgage payment of $3,124. The median home price in Utah was $525,500 as of January 2024, compared to $345,200 in January 2020.

The income required to purchase a typical home has increased by over 65 percent in three other states since the start of 2020: Tennessee ($94,371), South Carolina ($96,600) and Arizona ($110,271).

5 states where income required to afford a typical home grew the least

The annual salary needed to afford a typical home grew the least in North Dakota, the District of Columbia, Louisiana, Illinois and Kansas between January 2020 and January 2024.

Anyone looking to purchase a home in North Dakota must earn $73,414 to afford a median-priced home in their area, the smallest income increase of all U.S. states (9.2 percent). That’s despite North Dakota home prices falling 6.1 percent since the start of 2020, likely due to a combination of historically low inventory and high mortgage rates.

The District of Columbia, a historically expensive place for homebuyers, experienced the next-smallest required income increase — up 24.6 percent to $167,871. Louisiana, Illinois and Kansas followed, with four-year income increases that ranged between 24.9 percent and 29.3 percent.

Is it worth buying a home in 2024? Tips from 3 housing market experts

If homeownership, a widely acknowledged way to create financial security and long-term wealth, is out of reach for so many Americans, where do we go from here? Here’s what experts recommend for aspiring buyers navigating today’s housing market:

Daryl Fairweather: Don’t rush into buying a home

“Homeownership doesn’t necessarily need to be your be-all and end-all goal. It can be one way to secure your finances and build for your future, but it’s not the only way. In the short run, become more cognizant of your plans for saving to reach your financial goals. One of the benefits of renting is that it allows for more flexibility. That means it’ll be easier for you to take a new job in a new city or put yourself on a better financial path if you don’t tie yourself down. It might be a blessing in disguise because you have more flexibility to get yourself on a path where you can attain homeownership.”

Chief economist at Redfin

Jeff Ostrowski: Don’t time the housing market

“If you’re ready to buy, then buy. There’s no guarantee that the market will become more favorable for buyers. For instance, mortgage rates are expected to fall in 2024, and that means more buyers will be competing for homes.”

Bankrate housing market analyst

Danielle Hale: Rate proof your housing budget

“Something that’s hard to appreciate until you actually sit down and do the math is how big of an effect small changes in mortgage rates can have on your monthly payment. Calculate what your monthly payment will be in the price range you’re looking at with today’s rate, but also consider what happens if mortgage rates go up a quarter of a percent, or if they drop a quarter of a percent, so you already know what that means for your search price and your monthly payment. That’s important in this environment.”

Chief economist at Realtor.com

Full data: Annual income needed to afford a median-priced home by state and the District of Columbia

Methodology.

This study is based on an analysis of annual income needed to afford a median-priced home in all 50 U.S. states and the District of Columbia in 2024 compared to 2020. Bankrate accessed Redfin’s median sale price data from January 2020 and January 2024 on February 26, 2024 to calculate monthly mortgage payments for every state, the District of Columbia and nationwide to determine how much Americans need to earn to afford a typical home.

Monthly mortgage payments for 2024 for all 50 states and the District of Columbia were calculated using Bankrate’s mortgage calculator assuming a 20% down payment, no HOA fees or PMI, the 52-week average interest rate for a 30-year fixed mortgage, 2022 average state property taxes, and 2020 average homeowners insurance rates. According to Bankrate’s survey of large lenders on February 21, the 52-week average for a 30-year fixed mortgage interest rate was 7.05%. Bankrate used 2020 National Association of Insurance Commissioners data from the Insurance Information Institute to factor in the average cost of homeowners insurance in every state, the District of Columbia and nationwide in its calculations. Bankrate also included 2022 statewide property tax data from ATTOM in its calculations. Based on the same assumptions, Bankrate used Fannie Mae’s mortgage calculator to estimate the nationwide monthly mortgage payment as of January 2024.

Monthly mortgage payments for 2020 for all 50 states and the District of Columbia were calculated using Bankrate’s mortgage calculator assuming a 20% down payment, no HOA fees or PMI, the average 30-year fixed mortgage interest rate as of January 2020, 2020 average state property taxes, and 2020 average homeowners insurance rates. The 30-year fixed mortgage rate in January 2020 was 3.68%, according to National Association of Realtors data . Bankrate used 2020 National Association of Insurance Commissioners data from the Insurance Information Institute to factor in the average cost of homeowners insurance in every state, the District of Columbia and nationwide in its calculations. Bankrate also included 2020 statewide property tax data from ATTOM in its calculations. Based on the same assumptions, Bankrate used Fannie Mae’s mortgage calculator to estimate the nationwide monthly mortgage payment for January 2020.

The annual income needed to afford a median-price home is based on a person spending no more than 28% of their annual income on housing, as per the traditional 28/36 rule . Bankrate’s calculations did not include other monthly expenses or debts. Income data in this analysis is adjusted for inflation using the Consumer Price Index. In this report, Bankrate defines an “aspiring homeowner or homebuyer” as someone who will take out a mortgage to finance a home purchase. Results in this study in no way indicate approval or financing of a mortgage.

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Homebuying Season: What Recent Data Suggests for 2024

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Let’s cut right to the chase: 2024 will not be an easy year for the nation’s home buyers. The shortage of available homes will continue, which will hold prices aloft. And though mortgage rates may come down a bit throughout the year, they’ll continue to play a major role in affordability for buyers who need a home loan.

The pandemic disrupted many things, not the least of which was the housing market. The seasonal fluctuations we’d generally expect in housing prices and inventory were upended in 2020 and 2021. And while 2023 data indicates a return to more typical seasonal patterns, that certainly doesn’t mean smooth sailing for buyers.

Historic seasonal trends reveal what constitutes a typical homebuying season. A look at the past six years of housing market data from Realtor.com tells the story of disruption and the beginnings of recovery. We can expect some of these seasonal fluctuations to continue to normalize in 2024 — with inventory rising in warmer months, for example. However, the imbalance between housing supply and demand paired with higher relative rates will continue to make things feel abnormal.

A note on the dark horse of the 2024 homebuying season: The National Association of Realtors recently agreed to a settlement that will change how and by whom buyers’ agents are paid. While it isn’t entirely clear how much of an impact this change will have, it will make the already complex process of buying a home even more complicated.

Homes available for sale will increase

In a typical year, the number of homes listed for sale begins increasing in spring, as the weather warms, peaking in late summer to early fall before declining as the weather gets colder. In 2020, however, we entered lockdowns as this initial climb would typically begin, and the pandemic continued to suppress inventory throughout the year. While 2021’s seasonality did reflect a more traditional pattern, the number of available homes was about half the number listed before the pandemic.

As the market started to recover from extreme scarcity, both 2022 and 2023 saw inventory climb throughout the year with a minimal dip in the winter. December 2023 ended with about 714,000 available homes for sale, compared with 445,000 just two years earlier.

What 2024 buyers can expect: Inventory is likely to rise this spring and throughout the summer, on schedule with traditional seasonal trends. Barring any unforeseen economic shocks, buyers hoping to enter the market when the number of available homes is at its highest would do well to target late summer or early fall. However, inventory levels will remain depressed, and as listings increase, so too will competition.

The number of homes available for sale is in a deep hole. Even if inventory rises 20% this year — roughly the difference between the high point and the low of 2019 — there would still be hundreds of thousands fewer homes on the market than there were before the pandemic.

Prices will remain high, rising with warmer temps

A typical year has home sale prices starting low and rising as the weather warms. They peak around midyear before declining gently, ending the year higher than they began but lower than the summer peak. However, in 2020 and 2021, prices continued marching upward through the end of the year. And though both 2022 and 2023 showed a return to seasonal patterns, price levels were high.

In December 2023, the national median sales price among existing homes was $339,000 according to the Realtor.com data, up 31% from December 2019.

What 2024 buyers can expect: Prices are likely to rise more as we enter homebuying season, peaking in summer. The rapid ascent over the past several years is unlikely to be undone, largely due to the lack of available homes. The supply of homes can’t meet the demand of buyers, so sellers can command a higher price.

Homebuying season is on: Sales will rise

Despite high prices and low inventory, buyers still went to the mat after the initial pandemic shutdowns ended. It wasn’t until higher mortgage rates began exerting additional pressure that sales volume began falling. December 2023 capped off the lowest volume of existing home sales in a given year since 1995. Still, the seasonal patterns were steadfast: home sales rose into midyear before subsiding as the year ended.

Mortgage rates peaked in late 2023 after a long run of increases. While they’re still high relative to the past 10 years, they’re unlikely to rise much and will instead slightly decrease as the year progresses. Initially, as these rates climbed, buyers sheltered by more than a decade of low rates balked. But now buyers are likely accustomed to the idea that rates won’t reach 3% again anytime soon, meaning more will be willing to enter the market as listings increase.

What it means for 2024 buyers: Competition will be high this homebuying season. Even with rates at or above 6%, an influx of buyers lured by the seasonal increase in listings and acclimation to higher rates could mean a return to homes receiving numerous offers and selling well above the listing price.

Your 2024 homebuying strategy

Buyers this year should be ready for what they’ll face and prepare.

1. Go in with a plan. Set a careful budget , not only based on the home price but also on the mortgage rates you might encounter when it’s time to get financing. With rates around 6%, you can expect interest to add at least a few hundred dollars to your monthly payment on a typically priced home. Also, keep tabs on the evolving NAR settlement and what it means for the additional point of negotiations — agent compensation — that will come up during the buying process.

2. Learn your market. What is happening around the country, on average, may differ substantially in the neighborhood you would like to buy a house in. You could be pleasantly surprised if the average price is less than the national average, but the opposite is true, too. Reach out to a local real estate agent or two to get the lay of the land. Ask how much homes are selling for in your area, how many offers they’re typically getting, and whether your budget is realistic given the type of house you hope to get.

3. Be willing to compromise. When making your house wish list, not everything can be a must-have. Know what you’re willing to compromise on beforehand. With a lack of homes for sale, there’s a good chance you won’t find your dream house on a budget. If you’re willing to let go of the extra bedroom, expansive backyard or finished basement, you stand a better chance.

4. Know when to admit defeat. Deciding now isn’t the time to buy doesn’t mean forgoing homebuying forever. If the options available to you would stretch your monthly budget too thin or leave you in a home you’re unhappy with, waiting can be a strategic move. Use the extra time to continue building your down payment fund, so that when the right house comes along, you’re ready to make a competitive offer.

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Tesla’s Sales Drop, a Sign That Its Grip on the E.V. Market Is Slipping

Sales of the company’s electric cars dropped in the first three months of the year, even as other automakers sold more battery-powered vehicles.

By Jack Ewing and Neal E. Boudette

Tesla appeared to be losing command of the market it effectively created after it reported a stunning drop in quarterly sales on Tuesday, raising fresh questions about Elon Musk’s leadership of the company.

The sales decline caught investors off guard as rivals like BYD of China and Kia and Hyundai of South Korea reported increases in electric vehicle sales, suggesting that slower overall demand for battery-powered models was not the only explanation for Tesla’s problems.

Tesla pioneered the market for electric vehicles with its Model 3 sedan and Model Y sport utility vehicle, which proved that battery-powered cars could be appealing, practical and profitable. The cars revolutionized the auto industry and forced established carmakers to develop their own electric models.

But the market is evolving in ways that may not favor Tesla. In contrast to the early adopters who fueled Tesla’s rise, mainstream buyers may be put off by the vehicles’ unconventional design, including minimalist interiors and lack of buttons and switches. Almost all functions in Tesla vehicles are controlled from a large screen on the dashboard.

The system “makes it thoroughly distracting to adjust almost anything within the vehicle while motoring down the road,” Consumer Reports wrote in a review on Tuesday of a new version of the Model 3.

Tesla, which sells cars online and does not have many showrooms, is often the target of complaints about poor service. That may provide an advantage to established carmakers, like Ford Motor and General Motors, that have extensive dealer networks and are ramping up production of electric vehicles.

Tesla seems at a loss to respond to those challenges. It has been slow to follow up its initial success with new models, and Mr. Musk appears disengaged. He did not react Tuesday to the sales figures on X, the social media platform that he owns and posts on prolifically. Instead, he threw barbs at Walt Disney Company executives whom he accuses of being “woke.” Such remarks have made him a hero to conservatives but may be pushing liberals, who are more likely to buy electric cars, away from Tesla.

Tesla said it delivered 387,000 cars worldwide in the first quarter, down 8.5 percent from 423,000 in the same period last year. This was the first time Tesla’s quarterly sales have fallen on a year over year basis since a modest drop at the start of the pandemic in 2020. The sales figures were also significantly lower than the estimates of Wall Street analysts who had expected a modest increase.

“Tesla can’t stand still,” Ben Rose, president of Battle Road Research, said in an email. “Chinese E.V.s are already gaining a foothold in Europe, and it is unclear how long they will be forbidden from entering the U.S.”

More affordable cars would help Tesla appeal to a broader spectrum of buyers, Mr. Rose said.

To be sure, some of the sales decline may have reflected production problems beyond the company’s control, including a fire at a Tesla factory near Berlin that was the result of an arson attack.

And the company’s cars still have many fans. While panning the Model 3’s controls, Consumer Reports said the latest version provided a better ride than its predecessor and had improved handling.

But investors are clearly alarmed. Tesla’s shares have fallen more than 30 percent this year — including a 5 percent drop on Tuesday — because of concern that the company has lost momentum.

In China, Tesla faces BYD and dozens of other rivals with ambitions to expand worldwide. In Europe, established carmakers like Volkswagen and BMW have introduced more compelling battery-powered models. And in the United States, sales of electric cars are not growing as fast as they were a year ago, and many buyers are opting instead for hybrid models that pair a gasoline engine with batteries and electric motors.

Tesla rivals have continued to report sales increases. BYD said on Tuesday that it sold about 300,000 electric vehicles, up 13 percent from a year earlier. The company also sold 324,000 plug-in hybrid vehicles in the first quarter, up 15 percent.

BYD and other Chinese automakers have introduced new models rapidly, often undercutting Tesla on price. Those companies are also increasingly exporting cars to Europe, Southeast Asia and Latin America.

Kia, based in South Korea, said Tuesday that its sales of electric vehicles in the United States more than doubled in the first three months of the year compared with a year earlier after it introduced a new large sport utility vehicle, the EV9. Kia’s sister company, Hyundai, said it sold more than 10,000 electric vehicles in the first quarter in the United States, up 75 percent.

Toyota, the world’s largest automaker, doesn’t sell many fully electric vehicles. But the company said U.S. sales of electrified vehicles, a category largely made up of hybrids, under the Toyota and Lexus brands was up 74 percent in the first quarter.

Tesla pioneered mass-market electric cars, but its lineup is aging. The company’s only new model since 2020 is the Cybertruck , a futuristic pickup that went on sale in limited numbers last year. The least expensive version that Tesla says it can deliver this year starts at around $80,000, which makes it unaffordable to most car buyers.

Rivian, whose R1 pickup competes with the Cybertruck, said its sales, including of the truck and its two other models, rose 70 percent in the quarter, to 13,600 vehicles.

Tesla is working on an electric car that would cost around $25,000, but the model is not expected to go on sale in large numbers until 2026. In the meantime, Tesla remains dependent on the Model Y and the Model 3 for most of its sales.

The company has repeatedly cut prices, but analysts say the strategy has lowered its profits without doing enough to stimulate sales. The company has recently modestly raised the prices of some cars in the United States and China. The Model Y starts at nearly $45,000 before federal and state tax breaks, after an increase of $1,000 announced this week.

The quarterly sales figure shows Tesla managers “they need a real sales strategy and can’t rely on cutting price alone,” Gary Black, managing partner of the Future Fund, an investment firm, posted on X.

Mr. Musk, Tesla’s chief executive, has not given a clear indication of how the company plans to regain momentum. At the same time, his polarizing statements and endorsement of right-wing conspiracy theories have alienated many of the left-leaning customers who are most likely to buy electric cars.

Raphaelle Cassens, a Los Angeles resident, gave up her leased Tesla Model Y last year and replaced it with a leased electric BMW i4. Mr. Musk was one reason she switched, she said.

“Honestly, I don’t like him as an individual at all,” said Ms. Cassens, who is a registered Democrat but described herself as nonpartisan. She also said she received poor service from the company. “The attitude from the company definitely reflects the owner,” Ms. Cassens added.

At least one other large automaker is also struggling with electric vehicle sales. G.M. reported on Tuesday that its U.S. sales for the first quarter fell 1.5 percent, in large part because deliveries of battery-powered cars were down by about a fifth to around 16,000 vehicles.

The drop in battery-powered vehicle sales was the result of a sharp decline in sales of the Chevrolet Bolt, which G.M. stopped making at the end of 2023. Sales of other electric models that use G.M.’s newest battery technology rose but not enough to make up for the loss of the Bolt, which was one of the most affordable electric cars in the United States.

Jack Ewing writes about the auto industry with an emphasis on electric vehicles. More about Jack Ewing

Neal E. Boudette is based in Michigan and has been covering the auto industry for two decades. He joined The New York Times in 2016 after more than 15 years at The Wall Street Journal. More about Neal E. Boudette

The World of Elon Musk

The billionaire’s portfolio includes the world’s most valuable automaker, an innovative rocket company and plenty of drama..

SpaceX: President Biden wants companies that use American airspace for rocket launches to start paying taxes into a federal fund  that finances the work of air traffic controllers.

Tesla: The maker of electric vehicles appeared to be losing command of the market it effectively created after reporting a stunning drop in quarterly sales , raising fresh questions about Elon Musk’s leadership of the company.

Business With China : Tesla and China built a symbiotic relationship that made Elon Musk ultrarich. Now, his reliance on the country may give Beijing leverage .  

A Testy Interview:  In the wake of a rough interview with Elon Musk that touched upon Donald Trump, his reported drug use and hate speech on X,  the former television anchor Don Lemon said that his deal for a new talk show on X was called off  just days before it was scheduled to air.

The Musk Foundation: After making billions in tax-deductible donations to his charity, Musk has failed recently to donate the minimum required to justify a tax break  — and what he did give often supported his interests.

OpenAI: Musk, who helped found the A.I. start-up in 2015, has filed a lawsuit  accusing the company and its chief executive  of breaching a contract  by putting profits and commercial interests ahead of the public good.

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2024 Housing Market Forecast and Predictions: Housing Affordability Finally Begins to Turnaround

As we look ahead to 2024 , we see a mix of continuity and change in both the housing market and economy. Against a backdrop of modest economic growth, slightly higher unemployment, and easing inflation longer term interest rates including mortgage rates begin a slow retreat. The shift from climbing to falling mortgage rates improves housing affordability, but saps some of the urgency home shoppers had previously sensed. Less frenzied housing demand and plenty of rental home options keep home sales relatively stable at low levels in 2024, helping home prices to adjust slightly lower even as the number of for-sale homes continues to dwindle. 

Realtor.com ® 2024 Forecast for Key Housing Indicators

Home Prices Dip, Improving Affordability

Home prices grew at a double-digit annual clip for the better part of two years spanning the second half of 2020 through 2022, a notable burst following a growing streak that spanned back to 2012. As mortgage rates climbed, home price growth flatlined, actually declining on an annual basis in early 2023 before an early-year dip in mortgage rates spurred enough buyer demand to reignite competition for still-limited inventory. Home prices began to climb again, and while they did not reach a new monthly peak, on average for the year we expect that the 2023 median home price will slightly exceed the 2022 annual median.

Nevertheless, even during the brief period when prices eased, using a mortgage to buy a home remained expensive. Since May 2022, purchasing the typical for-sale home listing at the prevailing rate for a 30-year fixed-rate mortgage with a 20% down payment meant forking over a quarter or more of the typical household paycheck. In fact, in October 2023, it required 39% of the typical household income and this share is expected to average 36.7% for the full calendar year in 2023. This figure has typically ranged around 21%, so it is well above historical average. We expect that the return to pricing in line with financing costs will begin in 2024, and home prices, mortgage rates, and income growth will each contribute to the improvement. Home prices are expected to ease slightly, dropping less than 2% for the year on average. Combined with lower mortgage rates and income growth this will improve the home purchase mortgage payment share relative to median income to an average 34.9% in 2024, with the share slipping under 30% by the end of the year.

Home Sales Barely Budge Above 2023’s Likely Record Low

After soaring during the pandemic, existing home sales were weighed down in the latter half of 2022 as mortgage rates took off, climbing from just over 3% at the start of the year to a peak of more than 7% in the fourth quarter. The reprieve in mortgage rates in early 2023, when they dipped to around 6%, brought some life to home sales, but the renewed climb of mortgage rates has again exerted significant pressure on home sales that is exacerbated by the fact that a greater than usual number of households bought homes over the past few years, and despite stories of pandemic purchase regret , for the most part, these homeowners continue to be happy in their homes. 

This is consistent with what visitors to Realtor.com report when asked why they are not planning to sell their homes. The number one reason homeowners aren’t trying to sell is that they just don’t need to; concern about losing an existing low-rate mortgage is the top financial concern cited. Our current projection is for 2023 home sales to tally just over 4 million, a dip of 19% over the 2022 5 million total. 

With many of the same forces at play heading into 2024, the housing chill will continue, with sales expected to remain essentially unchanged at just over 4 million. Although mortgage rates are expected to ease throughout the course of the year, the continuation of high costs will mean that existing homeowners will have a very high threshold for deciding to move, with many likely choosing to stay in place.  Moves of necessity–for job changes, family situation changes, and downsizing to a more affordable market–are likely to drive home sales in 2024. 

Shoppers Find Even Fewer Existing Homes For Sale

Even before the pandemic, housing inventory was on a long, slow downward trajectory. Insufficient building meant that the supply of houses did not keep up with household formation and left little slack in the housing market. Both homeowner and rental vacancy remain below historic averages . In contrast with the existing home market, which remains sluggish, builders have been catching up, with construction remaining near pre-pandemic highs for single-family and hitting record levels for multi-family . 

Despite this, the lack of excess capacity in housing has been painfully obvious in the for-sale home market. The number of existing homes on the market has dwindled. With home sales activity to continue at a relatively low pace, the number of unsold homes on the market is also expected to remain low.  Although mortgage rates are expected to begin to ease, they are expected to exceed 6.5% for the calendar year. This means that the lock-in effect, in which the gap between market mortgage rates and the mortgage rates existing homeowners enjoy on their outstanding mortgage, will remain a factor. Roughly two-thirds of outstanding mortgages have a rate under 4% and more than 90% have a rate less than 6%.

Rental Supply Outpaces Demand to Drive Mild Further Decline in Rents

After almost a full year of double-digit rent growth between mid-2021 and mid-2022, the rental market has finally cooled down, as evidenced by the year-over-year decline that started in May 2023 . In 2024, we expect the rental market will closely resemble the dynamics witnessed in 2023, as the tug of war between supply and demand results in a mild annual decline of -0.2% in the median asking rent.

New multi-family supply will continue to be a key element shaping the 2024 rental market.  In the third quarter of 2023, the annual pace of newly completed multi-family homes stood at 385,000 units. Although absorption rates remained elevated in the second quarter, especially at lower price points, the rental vacancy rate ticked up to 6.6% in the third quarter. This uptick in rental vacancy suggests the recent supply has outpaced demand, but context is important. After recent gains, the rental vacancy rate is on par with its level right before the onset of the pandemic in early 2020, still below its 7.2% average from the 2013 to 2019 period.  Looking ahead, the strong construction pipeline– which hit a record high for units under construction this summer –is expected to continue fueling rental supply growth in 2024 pushing rental vacancy back toward its long-run average. 

While the surge in new multi-family supply gives renters options, the sheer number of renters will minimize the potential price impact. The median asking rent in 2024 is expected to drop only slightly below its 2023 level. Renting is expected to continue to be a more budget friendly option than buying in the vast majority of markets, even though home prices and mortgage rates are both expected to dip, helping pull the purchase market down slightly from record unaffordability. 

Young adult renters who lack the benefit of historically high home equity to tap into for a home purchase will continue to find the housing market challenging. Specifically, as many Millennials age past first-time home buying age and more Gen Z approach these years, the current housing landscape is likely to keep these households in the rental market for a longer period as they work to save up more money for the growing down payment needed to buy a first home. This trend is expected to sustain robust demand for rental properties. Consequently, we anticipate that rental markets favored by young adults , a list which includes a mix of affordable areas and tech-heavy job markets in the South, Midwest, and West, will be rental markets to watch in 2024.

Key Wildcards:

• Wildcard 1: Mortgage Rates With both mortgage rates and home prices expected to turn the corner in 2024, record high unaffordability will become a thing of the past, though as noted above, the return to normal won’t be accomplished within the year. This prediction hinges on the expectation that inflation will continue to subside, enabling the recent declines in longer-term interest rates to continue. If inflation were to instead see a surprise resurgence, this aspect of the forecast would change, and home sales could slip lower instead of steadying.
• Wildcard 2: Geopolitics In our forecast for 2023 , we cited the risk of geopolitical instability on trade and energy costs as something to watch. In addition to Russia’s ongoing war in Ukraine, instability in the Middle East has not only had a catastrophic human toll, both conflicts have the potential to impact the economic outlook in ways that cannot be fully anticipated. 
• Wildcard 3: Domestic Politics: 2024 Elections In 2020, amid the upheaval of pandemic-era adaptations, many Americans were on the move. We noted that Realtor.com traffic patterns indicated that home shoppers in very traditionally ‘blue’ or Democratic areas were tending to look for homes in markets where voters have more typically voted ‘red’ or Republican. While consumers also reported preferring to live in locations where their political views align with the majority , few actually reported wanting to move for this reason alone. 

Housing Perspectives:

What will the market be like for homebuyers, especially first-time homebuyers.

First-time homebuyers will continue to face a challenging housing market in 2024, but there are some green shoots. The record-high share of income required to purchase the median priced home is expected to begin to decline as mortgage rates ease, home prices soften, and incomes grow. In 2023 we expect that for the year as a whole, the monthly cost of financing the typical for-sale home will average more than $2,240, a nearly 20% increase over the mortgage payment in 2022, and roughly double the typical payment for buyers in 2020. This amounted to a whopping nearly 37% of the typical household income. In 2024 as modest price declines take hold and mortgage rates dip, the typical purchase cost is expected to slip just under $2,200 which would amount to nearly 35% of income. While far higher than historically average, this is a significant first step in a buyer-friendly direction.

How can homebuyers prepare? 

Homebuyers can prepare for this year’s housing market by getting financially ready. Buyers can use a home affordability calculator , like this one at Realtor.com to translate their income and savings into a home price range. And shoppers can pressure test the results by using a mortgage calculator to consider different down payment, price, and loan scenarios to see how their monthly costs would be impacted. Working with a lender can help potential buyers explore different loan products such as FHA or VA loans that may offer lower mortgage interest rates or more flexible credit criteria. 

Although prices are anticipated to fall in 2024, housing costs remain high, and a down payment can be a big obstacle for buyers. Recent research shows that the typical down payment on a home reached a record high of $30,000 .  To make it easier to cobble together a down payment, shoppers can access information about down payment assistance options at Realtor.com/fairhousing and in the monthly payment section of home listing pages. Furthermore, home shoppers can explore loan products geared toward helping families access homeownership by enabling down payments as low as 3.5% in the case of FHA loans and 0% in the case of VA loans .

What will the market be like for home sellers?

Home sellers are likely to face more competition from builders than from other sellers in 2024. Because builders are continuing to maintain supply and increasingly adapting to market conditions, they are increasingly focused on lower-priced homes and willing to make price adjustments when needed. As a result, potential sellers will want to consider the landscape for new construction housing in their markets and any implications for pricing and marketing before listing their home for sale.

What will the market be like for renters?

In 2024, renting is expected to continue to be a more cost-effective option than buying in the short term even though we anticipate the advantage for renting to diminish as home prices and mortgage rates decline. 

However, for those considering the pursuit of long-term equity through homeownership, it’s essential to not only stay alert about market trends but also to carefully consider the intended duration of residence in their next home. When home prices rise rapidly, like they did during the pandemic, the higher cost of purchasing a home may break even with the cost of renting in as little as 3 years. Generally, it takes longer to reach the breakeven point, typically within a 5 to 7-year timeframe. Importantly, when home prices are falling and rents are also declining, as is expected to be the case in 2024, it can take longer to recoup some of the higher costs of buying a home. Individuals using Realtor.com’s Rent vs. Buy Calculator can thoroughly evaluate the costs and benefits associated with renting versus buying over time and how many years current market trends suggest it will take before buying is the better financial decision. This comprehensive tool can provide insights tailored to a household’s specific rent versus buying decision and empowers consumers to consider not only the optimal choice for the current month but also how the trade-offs evolve over several years.

Local Market Predictions:

All real estate is local and while the national trends are instructive, what matters most is what’s expected in your local market. 

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Maternal and Infant Research Electronic Data Analysis (MIREDA): A protocol for creating a common data model for federated analysis of UK birth cohorts and the life course.

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Introduction Birth cohorts are valuable resources for studying early life, the determinants of health, disease, and development. They are essential for studying life course. Electronic cohorts are live, dynamic longitudinal cohorts using anonymised, routinely collected data. There is no selection bias through direct recruitment, but they are limited to health and administrative system data and may lack contextual information. The MIREDA (Maternal and Infant Research Electronic Data Analysis) partnership creates a UK-wide birth cohort by aligning existing electronic birth cohorts to have the same structure, content, and vocabularies, enabling UK-wide federated analyses. Objectives 1) Create a core dynamic, live UK-wide electronic birth cohort with approximately 100,000 new births per year using a common data model (CDM). 2) Provide data linkage and automation for long-term follow up of births from MuM-PreDiCT and the Born-in initiatives of Bradford, Wales, Scotland, and South London for comparable analyses. Methods We will establish core data content and collate linkable data. Use a suite of extraction, transformation, and load (ETL) tools will be used to transform the data for each birth cohort into the CDM. Transformed datasets will remain within each cohorts trusted research environment (TRE). Metadata will be uploaded for the public to the Health Data Research (HDRUK) Innovation Gateway. We will develop a single online data access request for researchers. A cohort profile will be developed for researchers to reference the resource. Ethics Each cohort has approval from their TRE through compliance with their project application processes and information governance. Dissemination We will engage with researchers in the field to promote our resource through partnership networking, publication, research collaborations, conferences, social media, and marketing communications strategies. Keywords: Birth Cohort, Life Course Perspective, Data Science, Data Curation, Routinely Collected Health Data, Electronic Health Records, Unified Medical Language System.

Competing Interest Statement

The authors have declared no competing interest.

Funding Statement

This work was supported by an MRC Partnership Grant [MR/X02055X/1], MatCHNet pump-priming [U20005/302873] and an MRC Programme Grant [MR/X009742/1].

Author Declarations

I confirm all relevant ethical guidelines have been followed, and any necessary IRB and/or ethics committee approvals have been obtained.

The details of the IRB/oversight body that provided approval or exemption for the research described are given below:

Access to data is granted according to the information governance requirements of each TRE. The Data Protection Act 2018 is not applicable to anonymised data and the OMOP CDM will be anonymised and provide aggregated data and statistics only. Each TRE has ethical approval for its operation and use, thus no additional ethical approval was required beyond the standard project approval by official channels.

I confirm that all necessary patient/participant consent has been obtained and the appropriate institutional forms have been archived, and that any patient/participant/sample identifiers included were not known to anyone (e.g., hospital staff, patients or participants themselves) outside the research group so cannot be used to identify individuals.

I understand that all clinical trials and any other prospective interventional studies must be registered with an ICMJE-approved registry, such as ClinicalTrials.gov. I confirm that any such study reported in the manuscript has been registered and the trial registration ID is provided (note: if posting a prospective study registered retrospectively, please provide a statement in the trial ID field explaining why the study was not registered in advance).

I have followed all appropriate research reporting guidelines, such as any relevant EQUATOR Network research reporting checklist(s) and other pertinent material, if applicable.

There was an error in the order of authorship and a missing punctuation mark after the title abstract. Also needed to update the authors order in the file I uploaded as it did not match that of the paper.

Data Availability

Data will be available upon reasonable request through the Health Data Research (HDRUK) Innovation Gateway.

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