Over the past five months, we have been looking at the basic components of a successful incentive program. The last (and often neglected) critical building block is sales analytics, a powerful set of tools that can help you better manage your sales and marketing efforts and investments.
Not long ago, we ran a series of incentive programs aimed at motivating a client's distributor sales representatives. Initially, we helped them increase the effectiveness of their efforts by improving program creativity, communications, and rewards—and increased sales resulted. Soon after, we added sales analytics as a key program deliverable, to begin to gather end-user information that was typically being lost due to the multi-level nature of their sales channel.
For the first time, the client was able to uncover what companies were actually buying their products and segment them into target markets. The results were surprising, as completely new niche market opportunities were discovered. Today, each market is served by a unique set of specific relational marketing communications and tools that are driving continued sales growth. Sales analytics created new opportunities for expansion of sales opportunities.
A sales incentive program and platform, especially one created for non-employee sales channels, can be a powerful tool for gathering seller, reseller, and end-user sales data for a variety of marketing intelligence, targeting, and cross-selling opportunities.
The key to having solid analytics is to ask the right questions at program creation—questions that will yield the data reporting and tracking needed throughout the program to make solid business decisions. Then, the incentive site can have functionality built in that will help you analyze and act on the sales information that you capture.
Of course, if you have direct sellers and/or if detailed sales information can be acquired directly through your normal sales process, that data can be uploaded directly into the incentive site, where reports and dashboards can be made available to sellers.
On the other hand, if you are selling through an indirect channel (sales representatives, distributors, VARs, contractors, etc.) that doesn't normally allow you to capture detailed sales and/or market information, the incentive platform can be built to gather intelligence.
The right questions are those similar to these: Who is selling your products? Are products being resold, and if so, through whom? What products are your sellers and resellers selling and why? How can the purchasers be segmented for future promotions and specific marketing efforts?
What is the product mix being sold and what is the profitability of specific groups of items? Can the final sales price of products (if it is variable and/or determined by resellers) be captured? How can sales be increased if certain products are targeted during certain times of the year?
If your sales data can't be automatically gathered, have your incentive company include claims functionality on your incentive platform for capturing the sales channel and end-user information that you need about each sale. Claims sites are easy to create and can offer the opportunity to gather new levels of sales intelligence.
Once your incentive program kicks off, you'll find a wide variety of uses for the data you are gathering. VanSon Technology Services is a consulting firm that specializes in providing IT analytics for loyalty, incentive, and relationship marketers for a wide variety of sales channel applications. President Chris Vanderploeg and his team are experts in helping clients create applications to gather important sales channel data and generate insight to allow for more effective marketing.
Vanderploeg suggests the following as examples of the kinds of actionable intelligence that can result from proper analytic planning:
Segmenting sellers and customers. Identifying channel performance tiers, decile breakdowns, and uptrender/downtrender reporting.
Dashboard/scorecard reporting. Developing a set of standard metrics to be used to determine the effectiveness of the program and displaying sales results to participants in near real-time, sp as to influence the success of the program. Included can be sales, margin, average sale amount, number of customers, etc.
Promotion analysis. Reporting and analytics around special promotions within a program to incent sellers and resellers to sell, or customers to purchase, specific products during certain time periods. For example, double points may be awarded if specific products are sold in a certain month. Reporting can show which sellers, resellers, or customers respond to the promotion to earn the bonus points and can identify incremental sales generated during the promotion period.
Trending reports. Showing trends of sales that can be sliced and diced in a variety of ways—by customer, end-user, seller, reseller, market segment, region, location, product, etc.
Strategic marketing analysis. Capturing customer and end-user sales data specific enough to allow for future promotional efforts targeted at unique market segments.
Relationship marketing. Creating custom and personalized communications for sellers, resellers and end-user customers to grow and enhance long-term sales relationships.
ROI analysis. Factoring in a variety of sales-related costs and performance metrics at program inception, allowing you to determine ROI at program completion.
This list can go on and on, but it points out the great opportunity that you have to grow sales through the proactive use of analytics to break down sales numbers, identify and target customers and markets, drive specific product growth, change strategies on-the-fly, and build stronger channel relationships.
SMM columnist David Chittock is president of Incentra.