WHAT’S MISSING? A SALES GROWTH MODEL

Taking gaping opportunities

Gap analysis has evolved in recent years and is now used as a proactive tool to identify missed customer opportunities and help to boost sales and profits

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ap analysis has been used to assess business’ current versus potential performance for many years and, for some dealers, it is a crucial tool. However, gap analysis has evolved over recent years to reflect the rapid change in product mix and customer demand - as well as taking advantage of the wealth of data that is available thanks to the increase in online sales. This means it can be used to provide even greater insights.

“It is no longer a case of ‘You are buying our paper; did you know we can also supply your toilet rolls?’,” says Tim Beaumont, chief executive of Nemo Office Club. “Dealers are proactively adapting to identify new gaps in specific customer types, taking account of both changing demands and broader product availability in our industry.”

This means salespeople are having to evolve their methods too. “Salespeople are becoming more analytical, sizing up a business as to what it actually does and, therefore, what they, as a dealer, can provide to support that activity. Rather than blanket cold-calling, more time will be spent studying what product sales do and do not arrive against expectations, and then identifying a means to obtain that extra business.”

Nemo Office Club works with dealers to segment customers into categories, review sales and target gaps in purchases through marketing, including specific

vertical market tools that can be tweaked accordingly. “The challenge for dealers is finding the time to analyse their sales - and to appreciate the value of time dedicated to this task - relating a particular product category to a certain type of customer and using that insight to open new doors and broaden the range of products ordered on a regular basis.”

Tim believes dealers have become increasingly adaptable to any obscure requests since the pandemic, when they were forced to rapidly change their product mix. “There has been an increased confidence to be more proactive in selling a broader range of products and services, rather than just being responsive. Gap analysis is essential to make that work.”

FILLING THE GAPS

Terry Thurgood, of Vantage Point, takes the view that, as well as looking at gaps on a per customer basis in relation to type of product or service sold in a period, it is important to also consider significant classifications - such as paper or consumables - rather than trying to sell all things to all customers. “It’s advisable to benchmark expected levels of sales for each classification,” he says. “A customer buying just one ream of paper per month, technically, is filling the paper gap - but way below the targeted ratio within which your company sells paper, which is typically 3-5% of sales.

“Rather than looking at one customer at a time, another method is to use a campaign basis for filling gaps. For example, list all customers that have spent in the past six months but not bought paper, or customers who used to buy paper but no longer do.”

It quickly becomes clear that there are opportunities to...fill unsold gaps to customers

ANALYSING REPS

You can also conduct gap analyses on different aspects of the business - for example, it can be used to analyse the performance of reps and account managers, who all differ in their selling specialities. “On examination of classifications sold by rep it quickly becomes clear that there are opportunities to level-up the playing field and fill unsold gaps to customers,” Terry says. If you can identify which reps are falling behind on some of your significant classifications, then campaigns and incentives can be used to significantly improve the situation.” Terry also points out that comparing the average number of product ranges sold by rep is another useful benchmark - especially if measured across previous periods to gauge an improving or deteriorating trend.

Likewise, gap analysis can be performed on quotations; if a quotation is not followed up to become an order, then it can be viewed as a gap. “Benchmarking unconverted quotes by count and unachieved profit across your rep base shows who in your team is really following through quotes to conclusion,” says Terry. “Significant improvements have been achieved in conversions when reps are league tabled by conversion rates, and percentage of profit achieved, vs overall quotation totals.”

ACQUIRING AND RETAINING CUSTOMERS

It doesn’t stop there. New business can be

analysed to provide insights, to see how many new customers fall away or become established with the effort and cost needed to acquire a new customer, this is important to ensure that investment isn’t wasted. “Classifying new customers’ spending patterns into gaps is the perfect way to focus precious resources into keeping new business active,” says Terry.

This means that new customers that go dormant can be identified, and resources targeted to re-engage them. “You have already done most of the hard work opening the account; keeping it spending is hopefully the easy part. Again, benchmarking which reps are best at holding onto new business can bring significant changes in behaviour.”

This same methodology can be applied to established accounts too. Analysing which businesses have not spent in the current period can be informative; showing which accounts are active as a percentage by rep can also highlight which are best at customer retention. “Gaps are everywhere in your data. Further opportunities lie in gaps in profit targets, gaps in reactivated accounts... the list goes on,” says Terry.

“Of course, identifying the gaps is only part of the task. Largely, the real benefits are achieved by the disciplined use of the business intelligence being presented.” Indeed, it is how the data is used that is important, and time needs to be invested in the analysis. Time spent in this work more than pays off when the gaps highlighted are proactively and creatively addressed.

This approach can genuinely help to boost profits and enhance customer service – precious things in these tough economic times that will be welcomed by all.

The real benefits are achieved by the disciplined use of the business intelligence