This article explores a few tips, based on our experience, about how to use data to find new revenue within your business by extracting insight from the data you already have. In particular, we will look have a closer look into the business of wholesalers.
Recent technology advances have made data analytics affordable for companies of any size. To implement them you don’t have to sell your soul to Big Software and you don’t need a computer degree. What you need is a relentless drive to make your business better.
Wholesalers are essential in the flow of goods and services. Among other roles, they provide inventory, bridge access to trade financing, and support vendor marketing campaigns such as new product launches, rebates and promotions.
Delivering that value is not easy. Wholesalers thrive on thin margins for most of their revenues, and so it is imperative for them to manage their cash cycle diligently, negotiate and fulfil deals constantly with numerous suppliers and customers, and run lean operations focused on efficiency and promptness.
How to ring up more revenue? Every little counts
Nothing hurts sales like lack of availability
You can’t sell what you don’t have. Furthermore, stockouts might force loyal customers to turn to other suppliers. This obvious problem can become obscured if you’re carrying thousands of products. You need to track zero and close to zero inventory daily. Inventory of 100, for some product SKUs, might be de-facto out-of-stock, so your analytics system has to be flexible enough to catch these cases. Ideally, your order management system will keep track of unfilled orders and associated reasons. This information must be made highly visible and accessible for management, customer-facing and operations teams.
Find cross selling ideas
You know that you have different types of customers. Take your best customers in this group and see their typical purchase portfolio. Then take a look at the portfolio of the other members of this type and identify the gaps. What else could (and should) they be buying to look like your ideal customers?
Find upselling ideas – deepen customer portfolios
If a customer starts buying from you a lower priced SKU in a given category and the volume starts picking up, the next logical step is to see if they could also add a more premium SKU or widen the selection with product varieties.
Is a customer out of rhythm
With time customers settle into a rhythm characterized by order frequency, size and mix. If you take orders online, they visit your website a certain number of times and browse a typical number of pages. Changes in these patterns are hard to detect if you don’t have an easy and regular way of looking at the data and pulling out the highlights. Such signals must be assessed to check whether a competitor is trying to encroach or maybe your customer’s business is accelerating and you can help proactively in this growth stage.
Breakout sales by route and account manager
Your sales for a period are a combination of many factors: customers, account managers, routes, product categories, etc. Break out your sales by using one or a combination of variables. If you have separate invoicing and logistics systems then you have to integrate the information from them to see sales by route.
Category performance
Categories are the mini businesses within your business. Are you as strong in the cheap brands as in the premium ones? Do you have a gap in the middle or an underperformer? Do you have too many suppliers for a category or you need to find more so as to increase your bargaining power or to minimize stockouts? All these questions beget more questions that cannot be answered by one static report from an ERP system. You require an easy way to formulate queries of your data and dig deeper on the spot until you reach a conclusion before planning follow-up actions.
Develop a healthy business habit
Do these practices seem obvious to you? Well, the problem is that most business cannot cope with them. One of the main reasons is the manual work and the discipline required to generate the information. The good news is that technology changed the game, and business data has become much easier to integrate and visualize.
Importantly, don’t think you need to analyse everything. Instead, start small and focus on the areas where you suspect there are inefficiencies. Then gradually develop a habit of thinking with data. It’s about gaining knowledge from a flood of operational data and driving informed action.