The FOCUS Analysis (Fraction Of Catalog Utilized System)
Sales 101– It’s easier to sell to
an existing customer than it is to find a new customer. At least one expert says 14 times easier, but I
personally believe the number is closer to 5 times. This is true because you know the existing
customer. You know her operation, you know how she applies the product, you
know auxiliary people. Further, if you are
doing your job properly, you know the company’s financial process.
Distributors, by their very
nature, carry multiple and complementary product lines. On many occasions, our
chief advantage as a distributor lies in the ability to put together a package.
In an automobile analogy — we provide
not only the car tire, but the wheel, hub cap, lug nuts, and often provide
inflation as a service, too. With the day-to-day
hustle and bustle, we sometimes find salespeople working in the business
rather than working on the business. It becomes very easy to lose our
focus.
Introducing the FOCUS Analysis
The FOCUS Analysis is a technique
for bringing clarity to a sales process. Armed with this tool, we can see
things that would not otherwise be clear. Where only a blur existed, we create focus. Keep in mind; this is just one of several
tools available to us. Nothing replaces
time spent one-on-one with customers and salespeople. But, armed with this
tool, you will be in a position to maximize the benefit of the time spent.
A FOCUS Analysis begins with a spreadsheet listing both customers and your product groupings.
Step 1
Based on our first analysis, we
need to explore the no to low sales present at several accounts. For ease of
viewing, I have highlighted these accounts in red.
Spreadsheet with all customers listed.
Step 2 Determine Company-wide Target Numbers
In order to view our suspected
sales loss with greater perspective, it may be beneficial to determine a
company-wide average target. This target is accomplished by calculating the
total percentage of sales for each product group based on the performance of
the entire organization.
Example: If you are responsible
for a single portion of a larger entity, perform the same calculation twice.
First, calculate with your own data, then perform with the larger group’s data,
this gives extra FOCUS.
If we examine services at Beta Co.,
we determine that we should expect to see approximately $67 in service business
rather than zero. If we apply this same method, we see that we should expect
$113 on average in services at Test Co rather than the $40 we currently enjoy. The question often arises; is this 100%
accurate? The answer is no. Not all customers are created equal. Customer conditions and buying habits
vary. However, this process does give you a starting
point to determine where to probe and explore the situation with the
salespeople assigned to you.
Step 3 Sort by Salesperson
Let’s take another look at the data, this time sorted by salesperson, to probe for areas where training (and subtle tricks) may be required.
Putting this all together
Salespeople new to this process can be
divided into three basic groups:
- Those who believe in the power of
analysis
- Those who believe they can do
this “in their head”
- Those who question the time
invested in analysis
I will address these issues
one-by-one:
Does analysis
really work?
The variables involved in selling
activities today are immense. We are
responsible for looking over a couple dozen accounts, hundreds of contacts and
a whirling kaleidoscope of new product introductions. There are way too many things for a
salesperson to track. Looking at his/her
accounts in a slightly different way often allows for seeing the unseen. Analysis (and the Focus Analysis in
particular) opens the door to new discoveries.
Can these be done
in your head?
Certainly not; there are far too many
accounts, product groupings, and other points to maintain a clear picture across
the typical territory.
What about the
time invested?
In case studies with distributors just
like you, we have found that it takes approximately 3 hours to develop the
original (first time) spreadsheet. If
you are blessed with a powerful business system in your organization, the time
can be cut to one half or a quarter of this time investment.
Time after time, we have seen
salespeople, once armed with the new perspective, go out and quickly close
orders and pull in new business. For
instance, if you are selling DC operated sensors and not the corresponding DC
power supply; it is often quick work to pull in the power supply business. At one distributor, we discovered they sold
over 400 thermocouple input points and not a single thermocouple. As a matter of fact, they did not have
thermocouples on their line card.
Quickly, they found a source for thermocouples and radically affected
their sales – all in less than 12 months.
So, it does work.
Finally,
how often should I look at Focus Analysis?
In an ideal world, I would recommend
sellers review this data on at least a quarterly basis. But, there are time constraints, especially
if your ERP system doesn’t have the capability of serving up the
information. Looking at the numbers on a
quarterly basis will provide good results.
Pulling the same numbers up on a monthly basis will allow you to track
your progress. There is a time
trade-off.
Mid-year, meaning right now, is a
great time to analyze your customers.
Making a few very focused calls will make a difference to your
year.
If you need help getting started with
this process, drop us a line or give us a call. We have
assisted dozens of distributors in expanding their sales. You can enjoy a better year, by doing this
now.
Don't forget, we're still running our Summer Survey Special CLICK HERE for more details.
through July 15th! Get a customized survey for your organization for half price!
_________________________________
Comments