Of all the ways to streamline operations and help promotional products distributors grow, I’ve found that using data to make informed decisions can have the greatest impact on your bottom line. It gives you an instant advantage. And, in today’s modern marketplace there are unlimited tools and resources available to make data work for you and your business.
Three Questions Your Data Should Answer
As a Success Manager with AIA Corporation, I partner with entrepreneurs and SMB owners in the promotional products industry to identify opportunities and challenges of running a company and, ultimately, help them to improve profitability. When I work with Owners, we use data to identify:
- 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? 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.
- What needs to be adjusted? Assess how efficiently your business is running along with areas for improvement. Which customers haven’t recently purchased or are due for reorder? What are your sales per hour or per employee, 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 a handful of metrics that really matter
Data reporting capabilities have exploded in recent years, with a variety of customizable reports readily available. But with so much data close at hand, some business owners find themselves struggling to determine which metrics are most important to monitor. Based on my experiences working with hundreds of promotional products distributors, I’ve found the following metrics to be most helpful, particularly at the onset of using data for improvement:
- 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 hour, weekly/monthly/YTD sales and gross margin to include in scorecards that hold all team members accountable.
- 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.
- Top items by industry. Learn which products are most popular in a particular grouping along with typical margins. This ensures your pricing is consistent with (or lower than) peers and competitors, which builds trust with your customers. 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.
Let’s keep talking.
Data is changing the game when it comes to running a small business. I’d love to know how it has helped you achieve business goals, both personally and for members of your team. Tell me, how are you using data? What kind of information has been particularly impactful? Send us a message at LearnMore@aiacorporation.com