Eight Sales Performance Metrics You Should be Measuring Now

Regarding sales performance at the wholesale tier of adult beverages, there’s no more trustworthy saying than, “Whatever your measure, you’ll get  more of,” which is a variation of the famous Peter Drucker quote, “What gets measured gets managed.” Another way to put it is, “Inspect what you expect!”

 

It is just as essential to ignore some metrics as it is to embrace others. 

 

Near-pointless measures of performance

 

Here are a few things you might be tempted to measure that will leave you wanting in the performance department. 

 

• The number of sales calls can be a misleading metric because more sales calls do not necessarily equate to more sales. This is a common misconception, but it can be a fatal trap.  

 

• Accounts sold is a bit of a “hollow” metric because it assumes all accounts hold the same sales potential and most certainly do not. 

 

• Unsold accounts can also be misleading for the same reason as accounts sold because not all “unsold” accounts equally deserve time and attention. 

 

You must be much more specific about what you measure to improve performance.

 

The 8 Most Important Things to Measure

 

1. Penetration of target accounts 

 

As mentioned above, “accounts sold” is a bit of a hollow metric because getting into the correct accounts is the key to crushing your sales goals.

 

There are two things you will need to be able to measure your level of penetration within your target accounts:

1. A list of target accounts
2. Software that allows you to track PODs only for this target account list

 

“Penetration” is always expressed as a percentage. So, if you have a target account list of 60 accounts and PODs in 23 of them, your penetration percentage is “38%.”

 

Tracking penetration forces your sales team (and by extension, your distributor partners) to narrow their focus to the accounts with the most potential. 

 

Tracking this metric can transform your sales results!

 

2. Velocity (sales per POD)

 

Not all accounts are of equal value to brand owners. This is why tracking velocity is critical. 

 

Let’s say you would like to sell 500 cases of a particular brand per month. You can sell one case a month to 500 accounts or 10 cases a month to 50 accounts. You can even sell all 500 to ONE account!

One of our clients started measuring velocity for the first time and noticed a stark difference between the sales per POD in their top and average accounts. The average velocity in their top ten accounts was five times higher than the average account!

 

The next step was to ask the logical question, “How can we find more accounts capable of this volume?” 

 

Another important follow-up question was, “What about this account makes it capable of so much volume?”  That question is worth asking (and answering) because it holds the key to accelerating sales performance massively! 

 

Measuring velocity allows you to “leverage” your existing resources (time, people, and money) to a much more significant effect.

 

3. Commitments versus actual orders

 

Anyone who’s ever been on a distributor work-with knows there’s a big difference between a commitment and an order. We can certainly all agree on this.

 

But do you have a way to quickly and easily measure the gap between commitments and actual orders? It is very easy when you have the right software in place. 

 

You must go into this expecting gaps. However, the faster you can identify them, the faster you can follow up and close the gaps.

Here’s how it works:

1. At the end of the sales call, the sales rep records the sales call (including the order commitment) on their mobile app. 
2. A few days or a week later, that same sales rep will run a report showing whether or not any orders correspond with that commitment. 
3. c) Follow up with the account or wholesaler rep.

 

It is that easy! However, too many suppliers are not leveraging this capability, and as a result, much of the hard work done in the field is wasted. 

 

4. Retention rate + churn rate

 

Churn is defined as PODs that don’t stick. Also known as “one-and-done” sales, this is the byproduct of many standard practices today, such as incentives and blitzes. 

 

Paying for a temporary new placement wastes time for the sellers and dramatically diminishes the brand’s equity. You must be able to track this to reduce or eliminate its occurrence.

 

Retention is a straightforward metric that shows how long a particular placement has been in place. However, a key metric for monitoring “quality of distribution,” retention, can be challenging to measure without the right software. 

 

If you fail to monitor and measure retention and churn, you may spend a lot of time and energy merely to expend even more energy to compensate for the churn and lack of retention. 

 

5. Gaps in chain authorizations

 

If you have a chain team, you already know what a significant investment of time and effort goes into securing chain authorizations for your brands.

 

However, only some genuinely understand how important it is to monitor the execution of these authorizations closely. Failure to do so could diminish your sales by 5-15% in any month.

 

This situation is worse today than ever due to the distributors’ swollen portfolios. It’s just not feasible to expect them to monitor this on their own. That burden is now shared with the supplier. But not to worry—there’s software for this, too!

 

6. Daily rate of sale + days on hand

 

The days of set-and-forget inventory management at the distributor level are long gone. The burden of adequate inventory is now shared equally between suppliers and distributors. 

 

The key metrics here are twofold: how many cases of a particular product are you selling each day and how many days of inventory are on hand.

 

Because lead time is more crucial than ever, suppliers must have software to help monitor inventory to get ahead (and stay ahead) of inventory issues. 

 

Failure to monitor inventory (or blaming your distributors) will cost you dearly. A “sales year” is like a 12-inning baseball game, and the clock is not your friend. You must have the proper inventory to “win” the sales game because you cannot get the time back. 

 

7. Trade channel mix

 

Most brands have a “theoretical” sales mix in mind. On-premise versus off-premise. Chains versus independents. 

 

But few stay on top of it the way they should. The key is to align the “actual” share of volume, dollars, and PODs with the theoretical goals. 

 

Since off-premise volume tends to outpace on-premise volume on a per-store basis, measuring not only volume but also PODs by premise and class of trade is essential. A goal of 60% on and 40% off-premise should be measured in PODs.

 

This is a great place to overlay the velocity metric (#2 above). Strive to gain insights into where the volume potential lies for each segment in the channel mix.

 

8. Shipments versus depletions

 

Everyone measures shipments and depletions, but the key is the relationship between the two. 

 

When shipments get ahead of depletions, distributor inventories rise. When distributor inventories rise, they often take steps to relieve the cash flow crunch, and very few of those “steps” are in the best interest of the brand owner.

 

If depletions outpace shipments, out-of-stock situations are imminent. Both scenarios create undesirable outcomes. 

 

While true, the old saying “depletions drive shipments” only tells part of the story. The rest is about predictability and accurate forecasting. Shipments and depletion data need to be in the same report and viewed regularly (at least once per week).

 

Welcome to the age of collaboration!

 

Now more than ever, suppliers and distributors must work collaboratively. The best way to do this is to work across a shared set of metrics. But even better is using software to do it because no one needs more meetings, emails, or phone calls.

 

It is now possible to bring your entire distribution team together using software like BevPath. 

 

You owe it to yourself to look closely at what is now possible. It’s time to ditch the spreadsheets and move into the modern age of digital collaboration.

 

If you’d like a closer look at the latest and most excellent tools for measuring success, please click here to schedule a no-obligation, no-pressure demonstration. The future is here now!