Simply put, data leads to more informed decisions. The ability to capture information such as sales trends, profit margins and purchasing habits provides you with a powerful tool to forecast, plan and implement thoughtful strategies backed by data. And when you make data-driven decisions, your business runs more efficiently, freeing up your time and improving your bottom line.
Luckily, you don’t have to be a guru or a numbers person to capture and digest the data that will help focus your promo business efforts. Depending on the size of your company and the type of insights you want to acquire, there are a variety of options. Whether it’s a DIY Excel worksheet, QuickBooks analysis, a dashboard business intelligence software program or various project management tools, you have the opportunity to aggregate relevant information, see the big picture and advance your business.
As a success manager with AIA Corporation, I partner closely with our distributors to identify opportunities and challenges of running a promo business and, ultimately, help them to improve profitability. By using our proprietary business intelligence software, I have seen firsthand that arming distributors with key insights about their business gives them the competitive advantage they need.
We take a micro-level view at what’s really happening and discuss key learnings with our distributors. There are so many “aha” moments as they analyze sales trends, customer behavior, team member performance and top-selling products based on industry. From there, I work with them to implement both proactive and reactive strategies to grow their business.
How can you get started doing the same thing? I advise distributors to use data to answer three critical questions:
• What’s working? Establishing what—specifically—is contributing to your growth is imperative, especially when determining how to move forward. Who are your best customers and what are they buying? When and how are they purchasing? Which customers haven’t recently purchased or are due for reorder? What are your margins on these items? The data will give you a complete picture of the sales journey and process so you can decide what to continue doing and what to do more.
• How is your team performing? Assess how efficiently your business is running along with areas for improvement. What are your sales team’s results compared to the hours worked and gross and net profit? Analytics makes it easier to isolate what is affecting productivity or falling short. What’s more, to truly improve, you must have a way to compare the past to the future. Use last year’s figures as a baseline going forward, referencing them in your business plan and goal-setting for team members, sales and profitability.
• What course corrections are needed? Improving operational efficiencies will save you time and money. By receiving automated reports on a regular basis, you can quickly take action and make decisions based on the facts—not intuition or impression.
Focus on the metrics that really matter for your promo business
Once you know the questions you want to address, you’re ready to identify the specific metrics that will guide you toward the answers. Based on my experience working with hundreds of promotional products distributors, these are the metrics to monitor—particularly at the onset of using data to inform business decisions:
1. Sales by person. As the saying goes, what gets measured gets done. The best way to improve your performance is to have a full understanding of where you’ve been and where you’re headed. Reporting historical sales data for team members establishes a benchmark, which fuels accountability and allows you to set realistic and attainable goals for the future. When getting started, consider capturing sales per week/month/YTD and gross margin to include in scorecards that hold all team members accountable.
2. Sales by customer. Customer-level sales data helps you identify trends—who’s growing, flat or shrinking—and develop an appropriate response (such as a phone call or lunch meeting to continue building the relationship). As part of your reporting, be sure to include monthly/YTD sales, gross margin and top suppliers.
3. Sales by time period. Understanding monthly, quarterly and yearly trends will help you forecast and plan for continued engagement with customers, and allows you the opportunity to focus on business growth. For example, if your client always has a big program in March, begin working with them in advance to brainstorm new and unique ideas and plan ahead to avoid rush orders. Or, if the data shows that April is historically a slow month for you, develop sales and engagement strategies to meet your monthly metrics.
4. Top items by vertical market. At AIA, we’re able to leverage millions of data points from our community to identify which products are most popular in a particular industry, along with typical margins. This ensures pricing is consistent with (or lower than) peers and competitors, which builds trust with customers. However, there are some general data resources available from various industry partners, such as Promotional Products Association International (PPAI), Advertising Specialty Institute (ASI) and SAGE, where national information can be obtained. Additionally, for incremental sales growth and an added layer of service, you may find opportunities to propose certain items customers aren’t currently buying or using.
Data is changing the game when it comes to running a small business. Here are some examples of how AIA’s Success Management team has seen data work for promotional products distributors:
Marketing. Using insights to create a targeted multi-media campaign featuring the right messages and products to resonate with a specific audience at the right time.
Running an efficient business. You’ll have a better understanding of investments needed to grow, such as attending industry trade shows and training events, developing marketing campaigns or hiring employees to meet the specific needs of your company.
Goal setting. You know where you’ve been, where you are, and understand the opportunities and challenges the future holds based on analysis of your business. Now, goals can now be more specific and attainable.
[content_widget id=”115963″ align=”left” width=”30″ widget_type=”post_factbox” full=”true”]
