By Austin Rolling, Outfield
Consumer packaged goods, known as CPG products in the retail world, are items consumers use on a continual basis and require regular replenishment, such as toilet paper and laundry detergent. Because there are so many players in these markets, companies often struggle to get their customers to stay loyal to their brand. But this is critical for brands. By increasing customer retention rates just 5 percent, the company can increase profits by 25 to 95 percent. But in the Amazon Prime age, customers are even buying CPG products online instead of in their local grocery store.
According to IRI, U.S. online SPG sales grew 35.4 percent in 2018 and represented 11 percent of the total market. That’s a lot faster than the growth at supermarkets that sell the majority of CPG products. With this growing level of competition, brands need to find ways to get ahead and stay on top.
Business decisions usually revolve around getting the best ROI. Sales managers are often tasked with figuring out the best ways to allocate the time and resources of their sales team to gain the most ROI. But CPG sales rely largely on field merchandising or marketing reps who often work remotely and are scattered through many regions. The subset of field sales brings different variables that many traditional sales roles don’t have to deal with, such as traffic and weather conditions. These types of positions often sit on a goldmine of data they can collect in the field. Gathering and using this data can be extremely beneficial for brands in figuring out what their customers want.
Too often companies are making decisions around their products with very little information on the specifics of the marketing they’re selling to. The emergence of technologies to support analytics is changing things by making analyzing data much more attainable. Companies are able to gather and analyze data around the different markets they sell to, which is key to making smarter business decisions. Here are 3 critical field sales data metrics that can take CPG sales to the next level:
What’s The Value Of A Visit?
One of the most important KPIs of account performance is knowing the answer to the value of each visit your rep makes to a location. By determining this metric, it will set the stage for a lot of other decisions. The value of a visit is calculated by revenue output divided by the number of visits it took to reach the revenue amount. This type of data could be used to make smarter decisions regarding the scheduling of your sales reps, especially when time and resources are limited.
How many times should I visit each location?
It’s important to know where your reps are but knowing what they’re doing at those locations is much more important. Tracking where they are going and when is important for foundational data, but by combining this with visit activities, you can correlate data that helps understand if your visits are having the type of impact you think you are.
If you learn, from collecting and analyzing this data, that there actually isn’t a correlation between visits and revenue generated from a particular location, the sales rep should consider shifting attention elsewhere. It’s important to also consider the type of visit being made, as some are more important than others. For example, a product training visit will look much different from a general account checkup. By recording the type of event that has occurred, you’ll be able to find the correlation coefficients associated with certain types of visits.
You may find that revenue increases as the number of visits to a store increases. But managers will be able to determine that this type of linear relationship cannot go forever since there will be a point when an extra visit to a store will not bring the extra revenue expected. This is when the rate of diminishing returns starts. By analyzing more data, you can find the optimum number of visits that should be done for each store.
How Long Should My Visit Last?
Whether it’s 15 minutes or three hours, sales reps often have some flexibility when it comes to how long they will spend at each of their stores. By accurately tracking the amount of time they spend at a location, combined with performance data of a single location, you’ll be able to find the inflection point where the law of diminishing return starts. This metric is important because it provides sales professionals the optimal amount of time to spend on location before ROI starts to depreciate, allowing them to reduce costs and head to other accounts.
From field sales to marketing and merchandising, sales professionals should expand their level of thinking as it relates to sales operations and execution. Utilizing field sales software that’s widely available these days, reps can easily track and analyze data that can help them do their jobs better and help brands increase profits. In a world where the CPG space is being impacted significantly by the “Amazon Effect,” brands have to become smarter and more efficient in order to stay on top, and in some cases, stay in business.
About The Author
Austin Rolling is the cofounder and CEO of Outfield. As a third-generation entrepreneur, he started his first company, a fashion website, at the age of 20. He holds a BA in Communication from Eastern Michigan University and an MBA from Texas A&M University. He has spent the majority of his career working in the consumer goods and IT space in field sales and marketing, management and business development roles.