Running a trends analysis to evaluate your business is easier than you thought with business intelligence (BI) software. You’ll uncover revenue opportunities and black holes. Here's a selection of analysis trends set to take hold in 2016.Gap analysis
The market’s too competitive to let customers slip away. So how do you get a quick grip on sales slippage that could mean customers are leaving?
One of our customers sold industrial tools. The welder sales were fine. But when we did a gap analysis on how much welding wire they sold with each welder (welders didn’t work without it), we found the wire wasn’t always shipping with the welder. We broke sales down by Territory and then by Sales Representative. Customers were obviously buying it somewhere else. Using Phocas, we got a targeted list of customers and sent their reps out to talk about it. The business curbed the trend and increased wire sales.
Another customer sold a particular food product into a chain of cafes. The chain was under contract to buy this product from them. But a gap analysis of sales showed one café was not buying that product. Hmmm. We knew the product was still on the menu though, because the chain’s menu is standardised. So they rang the café and had a conversation about it. Solved!
In the video below, see how you can run a gap analysis:
You want to see either how you’re doing in terms of DIFOT (Delivery in Full On Time), or how your suppliers are doing.
If you’re a distributor, you could measure your DIFOT to promote yourself as being 97% in full on time. But if your DIFOT falls away, Phocas helps you work out what’s dragging it down. Is it:
- a particular customer?
- a particular product?
- because it’s located in the wrong place in the warehouse?
- or in the wrong warehouse to meet demand?
If you’re a retailer buying products from a distributor, with Phocas you know how much you ordered and how much you received. But you can also work out which products or suppliers are continually falling out of DIFOT. You can use that information to:
- negotiate a better rate
- improve lead time
- or better manage your customers’ expectations of delivery.
In an ideal world, you do not want an excessive volume of excess stock sitting around your warehouse.
You can use Phocas to monitor this with a “Weeks’ Cover” calculation. It shows you how many weeks your inventory for a particular product would support given the current demand. If 30 weeks’ cover means you’re overstocked, then you might choose to reduce the unit price, for example, to shift that stock. You can also work out if you’re understocked.
One of our customers has a chain of retail stores. They only want 20 weeks’ worth of cover because they have small warehouses and limited storage space at retail level. They’re monitoring:
- what’s moving fast
- what’s slow
- what’s not moving and taking up precious space
- what’s moving so fast we can’t keep enough on the shelf.
I’ll show you how that works.
You can use the Advanced Search function (advanced, but easy), to apply search criteria on customer trends like seasonal activity.
If you’re a distributor in HVAC, of course the air-con business is going to go crazy over summer and die off in winter. You want your entire customer base growing at its maximum potential during that busy period.
Phocas can show you:
- all customers on a downward trend over a given period who have spent less than the desired amount
- a list of customers and the products they’re no longer buying
- the performance of those customers’ sales reps.
Now you probably know why 70% of those customers aren’t buying because you know them so well, but what about the other 30%? If you take no action, you risk losing them.
Small guys analysis
We see companies get into trouble because they focus on the top accounts and forget about the smaller guys. The 80% revenue from 20% of the customer base rule is fine until your top customer goes off with a new supplier. Your business is exposed, big time. Often the rest of the customer base isn’t strong enough to support you through it.
You navigate that risk by doing a small guy analysis.
- You look at customers who purchase, say, less than $2 million annually.
- You find out what they’re buying, and not buying.
- You decide to run a cross-selling-upselling campaign that concentrates on growing them into medium or large accounts.
- You continue to make sure smaller customers are buying the same products as bigger customers.
If you were a distributor selling to a big Mercedes service centre and smaller European car service centres, you look at what products you’re selling to both. You discover you’re not selling brake pads to the smaller guys, even though they service the same cars. It’s time to pay a visit.
When you service smaller customers properly, as they grow, they’ll eventually buy more of, and a wider range of, your product. If you don’t pay that attention, a competitor will.
If you’d like a tailored demo, click here or on the button below.