style="font-size:15px;"> ● Channel mix dynamics– Like price mix, this measurement will allow you to understand what is happening to your business as the channels that customers use to buy your product change. For example, in many categories the channels where customers buy products have changed from independent local merchants to big box retailers, which are more centrally located. We also see a shift from “brick and mortar” (physical) stores to “virtual” (online) stores. You can calculate channel mix by taking the sales in each channel and dividing it by the total sales across all channels. You can then compare this calculation to other periods to determine trends.
Product drivers:
● Unit volume– It is important to be able to analyze unit volume by product categories. These categories are groupings of like products (for example, same sizes, same use, and so on).
● New products– Percent of new product sales to total sales will help reveal any issues with acceptance or penetration.
● The rate of sales– You can calculate the rate of sales for any product or group of products based on unit movement information. This calculation frequently takes the form of units per week per selling location. The selling location is usually the store where your products are sold. If that information is not available, shipment information out of your warehouse or your distributor’s warehouse can be used.
Service-level drivers:
● Service level– Defined as percent of orders on time and complete. The calculation here is based on actual units shipped versus the original order and the actual ship date versus the original order requirement. If you have three orders and two of them are complete in units and on time while the third order is on time but not complete in units, your service level is 66 %. You get zero credit for any orders that are not on time and complete.
● Service level by reason– Calculating service level is one thing, but being able to understand service level failures requires being able to describe those failures by some relevant reason code. Losing sales because the product was not available is an example that is important to understand at a more detailed level. More detailed levels of understanding for lost sales could reveal that a supplier did not deliver to your business on time, or that your own production issues delayed delivery to your warehouse, or that your inventory system is inaccurate, and so on.
Sales person drivers:
● Sales per person– This is a calculation of sales productivity. It is calculated just as it sounds; you divide sales by the number of sales people. The number can be calculated in total for the business as well as for each salesperson for comparison purposes.
● New accounts closed– The purpose of this driver is the same as when looking at sales in total. At the individual level, it can be a leading indicator of expected sales growth.
● Placement of new products– Like new accounts closed, this metric can be a leading indicator of expected sales growth.
● Attainment of quota– This is a measure of actual sales achieved by a salesperson compared to the quota, or goal, set in advance for that person. It should be noted that quota is not always the same as the goal in the published financial plan. This particular driver will not be illustrated in our example analysis in the following chapters.
In order to make this analysis of these and other drivers a reality, you need business intelligence tools.
What Data Is Needed
To lead an organization that can answer the questions about what happened, why it happened, and what it means to the business, you need measures of results and measures of drivers of results. QlikView allows you to get at the data to do this. The data elements required to analyze your sales in ways that we have discussed are:
● Invoice information at the line level, including units and amounts
● List price information by product and by customer
● Invoice or line discounts (discounts used to get from list price to invoice) by customer or channel
● Customer master information
● Customer grouping designation (usually by channel or class of trade)
● Product master information
● Product classification (brands, categories, styles, and so on)
● Sales person information and sales hierarchy
● Date dimension, if available, including fiscal calendar data
These data elements can involve data from invoice tables, as well as product and customer master tables. Some information may need to be integrated from spreadsheets.
If your company is managing sales on multiple systems (typically a result of a recent merger or acquisition), you might need to merge data from multiple systems and map the master data from one system to another.
Advanced Sales Analysis Makes the Data Visible and Available
With the information presented in this chapter, when you analyze sales you can determine any or all of the following:
● At the end of the day, am I really getting the value for my product that I should?
● What are the customer, product, or channel dynamics that affect my volume and profitability?
● Do the investments in my customers drive sales?
● What are the trends in customer buying habits that drive sales and that should drive the product development process?
● Are new products selling as well as expected?
● Are new products cannibalizing existing products?
● What should the focal point of the sales incentive program be?
● What is the conversion ratio from leads to prospects to customers (based on CRM data)?
● What is the sales productivity?
Answering these questions will enable you understand why the results are what they are and what it means to your business. That means you can make better decisions about:
● Channel and customer strategies
● Product development
● Pricing implementation with customers
● Investment priorities in the business
The value of improving your ability to make these critical decisions is undeniable. Chapters 4 and 5 of this book demonstrate, in a practical way, how to use QlikView to mine this information from your existing system! Those chapters cover loading data and ways to visualize the data that allows the appropriate associates in your organization to analyze and report information to help answer the questions listed in this chapter.
Chapter 4
Visualizing Sales Analysis in QlikView
In
