Delivering for Best-in-Class Wholesaler-Distributors
July 7, 2016  |  ByMark Dancer, NAW Institute for Distribution Excellence Fellow
NAW-4 Ways to Utilize Data Collected from CRM Analytics

Our conversations with executives and sales leaders for my book, Getting the Most Out of CRM, identified four immediate analytical uses for the data that CRM can provide:

1. Account profitability: One wholesaler-distributor is already using data to segment customers on two dimensions: valued services and account profitability. On the first dimension, valued services, sales and marketing teams work together to sort customers according to the primary value they expect. For example, some customers value timely and accurate delivery, while others value marketing support and advice given by salespeople. When combined with account profitability and the breadth and depth of products purchased, decisions can be made about where to invest sales eff orts and promotional dollars. The ultimate goal is to optimize the proactive services provided to customers, improving both share and margins.

2. Territory balancing: After implementing CRM, several executives noticed that when sales and margins were analyzed by territory, good results (and bad) were not always attributable to the skills and motivations of the salespeople assigned to the territories. Some territories were too small, with too few customers and opportunities for an aggressive salesperson to pursue. Other territories were too large, and an average salesperson could look like a star without working as hard as salespeople in other territories. One wholesaler-distributor conducted a rigorous territory balancing eff ort that compared territory sales and margin potential to how hard the territory was to work. (Geographic size, travel requirements, and customer mix were used to estimate workload.) When territories were redrawn and customers reassigned, sales increased by nearly 15% over two years.

3. Marketing promotion and campaign effectiveness: Improved analytics is helping wholesaler-distributors discover that there are two drivers of promotional effectiveness. The first is the program’s design, measured as products, discounts, and other factors. The other is the degree to which the sales force introduces, explains, and reinforces the program through conversations with customers. CRM helps wholesaler-distributors by first gathering the results by customer and salesperson, and then comparing eff ort to outcome. Outcomes are measured as sales results and are captured as customer data within CRM. Collecting effort is a bit more challenging, but again, new approaches are enabled by CRM. The most common method for collecting eff ort is for salespeople to enter call reports. Sometimes, the details of the call report provide insights, but often just measuring the number of calls completed and their timing relative to the promotion announcements is more than enough to identify differences by salespeople. Another method for tracking effort in CRM includes analyzing e-mail communication patterns. One wholesaler-distributor offered that it was using tablets and smart devices to better collect eff ort data and customer information. As salespeople visit customers, they enter information about inventory and promotional displays. The information is collected and analyzed by the wholesaler-distributor and fed back to customers with advice on how to improve their marketing efforts.

4. Salesperson performance: Distributors are finding productivity gains by leveraging data to improve salesperson performance. As a first step, sales analytics take a look at the performance of salespeople to identify patterns for measures including price discounts, margins, products sold, cyclicality of sales, and many other factors. This information is then used in at least two important ways: adjustments to sales goals and incentives, and coaching provided to salespeople. As one wholesaler-distributor said, “We found that many of our salespeople weren’t selling our entire product line consistently, as measured by the ratios of certain product volumes in a customer account. We adjusted our sales incentive plans around two key product categories with goals that required minimums before the salespeople could max out their bonuses. Before CRM we thought this was true, but now we know it . . . and we can set accurate goals for each salesperson.” Another wholesaler-distributor said, “Once our sales managers were armed with timely information about each salesperson’s pipeline, coaching was much more effective. Managers could challenge the salespeople with facts and get down to finding ways to sell more at the right margins.”

There are likely many more examples of how wholesaler-distributors can use CRM to improve sales productivity through improved analytics. Areas for wholesaler-distributors to investigate suggested by wholesaler-distributors in our research include determining the correct size of a sales force, measuring the effect of adding inside resources to turn up leads and prospects, and assessing the effect of product specialists to support field sales efforts.

Adapted from Getting the Most Out of CRM: Best Practices for Wholesaler-Distributors

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Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Business Innovation to drive awareness, advocacy and excellence for B2B innovation, and to enable an exchange of ideas between leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve go-to-market excellence across a wide range of industries in developed and emerging markets.

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