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There are a number of ways to analyze sales. The most important method is by sales representative. In fact, this is a standardized report that should be able to be run at any time (live). You should be able to measure all new sales orders received by your company. In some companies, sales (shipments) lag sales orders. Companies send in orders and get their orders sometime later (one day, one month, three months, etc.). In the case of delayed shipments, you need to have two reports available; one report summarizes all customer orders received, the other summarizes all shipments out the door, both reports by representative.
Suggestions for the two reports (sales orders or sales (shipments)):
- Customer name. (list all customers assigned to this rep regardless of dollars sold or not; list zero dollar customers — more revealing as to penetration progress)
- Buyer name. (Who is the guy who will cut purchase orders to your firm, who decides, who picks vendors? Who does the sales representative want on the front page of this report?)
- Buyer telephone number. (Which telephone number is the one the buyer wants you to use?)
- Sales history by week, month, year (you choose the period covered of sales history). One example might be column 1 last year’s sales, column 2 through 13, this year’s monthly sales, 14 this year-to-date, 15 % of this year to last year, 16 open orders, pending orders, etc. You decide on what is pertinent to your firm.
- Previous sales (for comparison such as last year’s total, last month’s total, last six months of monthly totals for comparison — you need to see or denote any trends, good or bad).
Questions to consider from sales representatives’ reports:
- What are the highest sales customers? Is there just one large customer with 80% of the sales and just a few small ones?
- What is the average dollar value of the sales order? If there is a very large single order, eliminate it and calculate the average sales order value for a more reasonable dollar figure.
- Are sales for this representative concentrated where he is located or is there a disconnection?
- For the sales level this gentleman brings to the company, what are his sales expenses? Does he spend more or less than his counterparts? Are the dollars he spends going to pay off?
- Are there new customers being added on a regular basis?
- Are there a number of assigned customers on the list that have yet to issue a purchase order to your company? Are there understandable reasons for this?
- Ask the sales representative to tell you what he needs to increase sales. Ask him frequently who or what is holding him back from getting more sales. What else can the company do for him to help him secure more orders? You must eliminate all reasons that hinder getting new sales orders for the sales rep so you know if he needs training or replacement.
- Make this report accessible at any given time. If necessary, assign an inside person to run these reports for sales personnel as they call in. Also make sure the report is updated, all orders are entered quickly and completely into your system. Are there any delays in getting new orders into your sales system? Ask the sales representatives to mention these if they notice there are missing sales orders from their reports. If they have to worry about this process, you have internal problems.
