Among the many developments in wholesale over the past few years, the huge increase in the availability of sales data has been particularly marked.
The rush to sell it, often without fully thinking past revenue-generation, has only been matched by the willingness to buy it, for reasons that again are not always clear.
In some cases, it is true that wholesale sales data has become part of the terms negotiation and so unless resisted, a supplier gets it anyway. However, there is an underlying belief that wholesale sales data is a good thing to have – and of course it is, as long as something productive is done with it.
[pull_quote_right]Value of data can become like an overseas conference – nice to have but not much else[/pull_quote_right]
With so much sales data now on the market, it is rapidly becoming time for both wholesalers and their suppliers to step back and ask themselves what this is actually all about. There is a real danger that the value of data becomes like wholesaler overseas conferences – nice to have, a cost of doing business, but not much else.
In a previous article, I questioned the objectives of wholesalers in selling data and the differing levels of data that they make available. With some datasets, you can only see your company’s sales; with some you cannot see individual depots. This severely limits the supplier’s ability to act on the data. This should have consequences in terms of the desirability and cost of such a dataset but does not seem to – again a consequence of it being part of terms, rather than a standalone product or service.
The supplier paradox: Investment in acquisition, none in analysis
With this plethora of information available, it would seem inevitable that suppliers will at some stage put some quality control into the purchase process. Fortunately for wholesalers, this will probably only come when the supplier community is more proactive in actually using the data and therefore establishing its worth. We do see sales data being used to measure share, performance against category and the like, but very rarely is it effectively used tactically.
In reality, this is not that surprising; having bought the data (and it can all add up to quite a large amount of money), generally nothing is spent on analysing and using it. Existing staff are expected to add it to their roster of tools and inevitably the use they make of it is shaped by their role. Very, very few companies have any depth of resource in wholesale insight and so the data is usually left to the sales team and the account manager in particular. Overworked and with limited support, this person will inevitably deal with headline numbers such as sub-category and SKU performance.
Such a result sells both the supplier and the wholesaler short. The wholesaler may be generating income but business development is limited, while the supplier is not generating a measurable advantage in a world seemingly dominated by return on investment.
The big issue: Do you have in‑house expertise?
It is a strange situation where purchasing data is okay because it is part of terms or is an established budget line, but obtaining money to make use of it makes the 12 labours of Hercules look like a walk in the park.
[pull_quote_right]We do see sales data being used to measure share, performance against category and the like but very rarely is it effectively used tactically[/pull_quote_right]
It is, of course, good that sales teams use the data in reviews and to monitor comparative performance. But the biggest return comes from a dedicated, experienced resource that can add extra dimensions to the analysis.
This is why third parties can be a good option when there is a realisation that buying data in itself is not sufficient. The right third party not only adds focus, data expertise and knowledge but also impartiality – there is a natural tendency for internal staff to concentrate on the positive and affirming, since they look for the good news rather than the opportunity.
The data- driven salesforce: Analyse, monitor and refine
It would seem self-evident that no supplier or wholesaler has sufficient resource to do everything they want. It thus makes sense to direct the limited sales and marketing resources available towards where the return and opportunity can be maximised. This is the essence of the data-driven salesforce.
If a supplier has a certain position in the marketplace and there are particular depots that underperform, it should want to know why and undertake activity to rectify, monitor and learn from this. How should the wholesaler react? By encouraging the activity and demanding it for all its depots or discouraging it because it wants full local control? The answer to that question cuts to the nub of the data conundrum. Data can open a Pandora’s Box of supplier requests and plans – can a wholesaler respond positively to this if all it really wants is the money?
The data-driven salesforce is not about calling on depots where you always get an order and a cup of tea. It certainly isn’t about agreeing a joint business plan or continually repeating promotional activity and then waiting for it all to happen. The methodology of the data-driven salesforce is based on data analysis, results-driven activity, monitoring and refinement. It is, of course, about maintaining existing business but it is just as focused on opportunity, looking at under-performance or where a good result could be a great result.
This could be challenging to wholesalers but the consequence of making data available is that it can be used to build a better business for the supplier. Those that embrace this will ensure that this is a mutual benefit rather than a one-sided one.