An in-depth understanding of revenue is crucial to growing a business. Revenue is a factor in every business metric and is the purpose behind every sales effort.
Yet many executives, especially in small and medium sized businesses struggle to understand the sources and drivers of revenue in their business.
With the help of revenue analytics, executives can understand customer behavior and use the data to optimize their marketing campaigns and other operations. In addition, such knowledge can be used to identify areas of strength in order to capitalize on existing opportunities and drive further growth.
By analyzing revenue data regularly, businesses can ensure that they are making informed decisions that will drive lasting success. Leveraging revenue analytics provides a competitive edge by allowing businesses to identify valuable insights and capitalize on existing opportunities. With this powerful tool, businesses can better understand customer attributes, the characteristics of their customer base, and customer sources to craft more effective marketing and customer acquisition strategies. Using revenue analytics, businesses can remain competitive in an ever-changing industry.
There are a few key steps to successful revenue analysis outlined below.
The first step to understanding revenue is to ensure that data is being collected and is well organized. The most important components are billing data and customer data.
Use of an accounting system for invoicing will provide revenue amounts, the foundation of analysis. Care and accuracy in entering customer names, addresses, and IDs is essential to producing the data needed for analysis. Accurate data creates analyses that can be trusted.
A customer relationship management application, or “CRM”, like Hubspot, Pipedrive, or Salesforce is a valuable tool designed to organize customer information. At a minimum, accurately and comprehensively entering basic information on each customer is important and includes industry, location, sales person name, and the customer source.
Collecting customer data is key to in-depth understanding of revenue drivers. For example, customer location data allows revenue concentration to be seen geographically, enabling strategic decisions for expansion.
The second step to understanding revenue is joining billing and customer data together, as they are often housed in different applications. The key to this is a unique and matching customer identifier in each system; either the customer name must be precisely identical between the two systems or there must be a customer ID code that is the same in the two applications.
The third step to understanding revenue drivers is a means to visualize the data. The business leader must be able to access the data easily and it must be presented in an understandable and clear format. This is achieved through use of a cloud-based data visualization platform that connects to the data applications (the accounting system and the CRM, for example) and shows the results of that data in charts. The use of color, spacing, relative size, and shapes in the charts are powerful in the brain’s ability to process the information.
Dashboards are a collection of charts that illustrate various attributes of the data and when they are well designed and constructed, the user can access both summary and detail information by interacting with the charts.
Revenue analysis is critical to business growth and is achieved by collecting and joining data from well organized systems and displaying that data in an accessible visual format. Ultimately, the powerful tool of visual revenue analysis provides valuable insights that enables companies to make informed decisions that will drive growth and success.