Sales Reporting and Analysis 1

Transcription

1 Sales Reporting and Analysis 1 Richard J. Petti ModelSheet Software, LLC rjpetti@modelsheetsoft.com URL: Customizable Spreadsheet: Blog: Group: October 25, 2011 Abstract: This paper briefly summarizes how the Customizable Spreadsheet Solution for Sales Reporting and Analysis can help you improve your business. A brief case study is included. Contents 1 Introduction 1 2 Case Study Case Situation The Challenge Solution Case Outcome 5 3 Customizable Spreadsheet Solution 5 4 Conclusion 7 1 Introduction Your sales data is the first and best source of information about your business. It tells you where you are succeeding by product and market segment over time. Totals give you an overview, and the details exposes issues in specific business segments. The Sales Reporting and Analysis model gives you maximum flexibility with the least effort to explore your sales data and extract valuable information that can improve decisions in many areas. The model uses pivot tables and charts that help you view top-down totals and segment details in one report, in which all the numbers are consistent. Spreadsheets led the desktop revolution that freed business experts to experiment and self-serve with less dependence on IT professionals. A Customizable Spreadsheet Solution is a spreadsheet model that you can adapt to your situation by filling in a simple online form, without editing a spreadsheet or its formulas. You get a customized spreadsheet that matches your needs better than any conventional template. 2 Case Study 2.1 Case Situation A software company tracked tens of thousands of market segments: 85 products three dozen geographic segments 20 customer industries six major application areas licenses and support services four main licensing options. (Theoretically, these numbers multiply out to 2.9 million segments.) Products were usually used together in various combinations in different applications. The company managed this complexity with a dozen management boards for a dozen business segments, plus management boards for functional departments such as marketing, sales, and finance. Tracking sales trends was enormously complex, not to mention understanding the causes and taking corrective action. 1 This paper: ModelSheet and the ModelSheet logo are registered trademarks of ModelSheet Software, LLC. page 1 of 7 Copyright 2011 ModelSheet Software, LLC

2 The company already had good sales reports for the largest segments. However, the reports did not adjust for systemic distortions in prices, exchange rates, license types that served more users and were price higher, timing of payment of service orders. For example, Japan looked roughly half its real size in revenue reports because it was served by indirect distribution that had lower transfer prices than company-owned distribution channels. Discussions at the dozen segment management board meetings were revealing. People asked many perceptive questions whose answers had actionable consequences, but the company did not have reliable answers. Important issues were often decided by anecdotes and speculation. 2.2 The Challenge The key management challenge was to improve the quality of decisions and organizational buy-in by providing reliable quantitative answers to many key questions that arise in business reviews. The company's databases often contained adequate data to address the issues. The challenge in business analysis was to design and implement reports that could provide answers to key questions arising in business reviews. The solution should use analytic tools that executives, middle managers and professionals can use without a lot of training. 2.3 Solution The sales reporting system presented many views. Revenue and sales units by tens of thousands of segments, rollup up to company totals. Trailing four-quarter reports that eliminate seasonality and diminish the distortion of trends caused by random large orders Installed base reports that answered many important questions about where the company s products were used. Product correlation reports that quantified which products were purchased together in which market segments. Application reports that quantified how often each product was used in each major application area. Customer reports that showed how many of each product a customer owned and had recently purchased. The new reports that adjusted for the major factors that distorted trends in the regular reports. Adjust for distributor pricing, exchange rates, and other regional pricing factors Adjust for concurrent licenses that effectively serve more users (and cost more) than individual named user licenses. Measure the effects of discounting, especially volume discounting by market segment. Eliminate the effect of early payment of service contracts, which was large, and distorted trends. The following sales reporting application was not generated by ModelSheet. Sales reporting involves large volumes of reports with relatively little analytical complexity. Therefore it is not among the first applications we have done with ModelSheet. page 2 of 7

3 Figure 1: Pivot Sales Report with High-level and Low-level Views Choose revenue unit sales normalized revenue Revenue classes product sales support leases 5-levels of products & options Roll-up to company total 4 levels of locations Pivot Table of Revenue - High-Level Overview Rev-or-Units Rev D-Options (All) I Group (All) Rev Class (All) Region (All) I Family (All) P Family (All) Location-1 (All) Industry (All) Product (All) Location-2 (All) Prod Year (All) Options (All) Location-3 (All) Prod Mgr (All) 3 levels of industries Data Prod Group GR 2002 GR 2003 GR 2004 GR 2005 Platform A 67,604 74,819 77,709 91, , % 3.9% 17.6% 16.0% A Add-ons 51,201 58,882 60,367 75,570 92, % 2.5% 25.2% 22.0% Platform B 29,595 34,960 36,084 42,127 46, % 3.2% 16.7% 10.2% B Add-ons 36,605 45,287 48,162 62,487 70, % 6.3% 29.7% 12.9% Grand Total 185, , , , , % 3.9% 22.2% 16.1% Prod intro year measures innovation Sales history, 5 years Product manager for convenience Growth history, 4 years Figure 2: Sales reports should show appropriate detail for all levels of management Data Region Location-1 Location-2 Location EMEA France 18,924 31,789 45,331 35,634 Germany 32,077 43,970 47,089 48,574 Nordic 8,868 23,509 3,280 28,703 UK 28,758 22,718 27,321 44,693 EMEA-Tier 2 Benelux 15,706-3,284 15,045 11,273 Israel 5,512 20,296-1,364 23,076 Italy 5,186 4,794 21,493 4,208 Spain 15,768 9,587 1,603 11,524 Switzerland 17,337 13,304 8,484 13,490 EMEA-Other Czech Republic 6,142 3,282-6,382-9,105 Greece 15,084 1,248-8,695-11,381 Hungary -6,499 1,252 9,135 5,142 Poland -11,251 15,902-1,053 14,851 Russia -10,434 8,432-8,189-7,157 S Africa -7, ,253 3,578 Turkey 14,639-1,298 2,848 2,833 EMEA-Remainder 15,349 10,239 9,295-1,363 EMEA-Other Total 15,993 39,403-14,294-2,602 EMEA-Tier 2 Total 75,503 84,099 30,966 60,968 EMEA Total 164, , , ,573 page 3 of 7

4 Figure 3: Customer-level Sales Report with Order Attach Rates Order Attach Rates by Customer Site Site age probes how well you attract new customers. 2-levels of customer organization Rev-or-Units V-Units Prod Mgr (All) I Group (All) Rev Class Perp Prod Year (All) I Family (All) Options (All) Region (All) Site Age (All) P Group (All) Location-1 (All) CoState (All) P Family (All) Location-2 (All) CoSalesTeam (All) Product Data Platform 1 Platform 2 Product A Product B Parent Company CompanySite %P %P %P1 Intel Corp Intel R&D % % % Intel Corp India % % 1 3.4% Intel Corp % % % Intel Corp UK Ltd % % % Intel Corp Salem, Oregon % 0 0.0% 0 0.0% ZAO Intel A/O % 0 0.0% 0 0.0% Intel Electronics 74 Ltd % % % Intel Products M Sdn Bhd % 0 0.0% 0 0.0% Intel Corp Total % % % Attach rates relative to product Platform 1. The figure above shows an example of using customer-specific sales reports to identify sales opportunities. It shows customer sites in the same company doing similar work that have very different ratios between the company s products. There may be a good reason for the different product ratios, but this is the sort of situation that merit exploration with the customer. This kind of analysis is also useful for comparing companies in similar industries with similar applications. A useful variant of this approach is market basket analysis. This analysis reports how often certain combinations of products are purchased together, and compares the market baskets purchased by different customers. page 4 of 7

5 Figure 4: Color Maps help spot segments with above and below-average performance Automotive Industry North America European Countries Product Family Product Total France Germany Nordic UK Other Europe Total Auto Total Platform Product Platform % % % % % % % % % Product family 1 Add-on #1 % % % % % % % % % Add-on #2 % % % % % % % % % Add-on #3 % % % % % % % % % Add-on #4 % % % % % % % % % Product family 1 Total % % % % % % % % % Product family 2 Total % % % % % % % % % Product family 3 Total % % % % % % % % % Key: France has above-average sales of Platform product in Auto industry. France has below-average sales of two add-on families in Auto industry. = product attach rate significantly higher than global industry average = product attach rate significantly lower than global industry average =product sales are too low to consider attach rate UK does not have significant above-average sales of any add-on product in this family. Asia Total UK has below-average sales of Platform product in Auto industry. UK has above-average sales of two add-on families in Auto industry. The color map above gives you a quick sense of what segments are doing better or worse than the global average. The company in the case study presented these tools to their largest foreign office, showing how to zero in on a problem. Show that a country has lower attach rates for some key products in certain industries, compared to global averages. Trace the deficiency in sales to specific customer companies and sites. Related the deficiency to specific marketing programs that were not carrying their weight. When Marketing introduced these methods to the foreign office, they got an ovation. 2.4 Case Outcome The quality and depth of discussions and decisions at operating and strategy reviews improved rapidly. Many questions that were formerly answered with a "finger to the wind" were now answered with hard data. Pivot tables are so flexible that answers to many questions could be provided in 1-5 minutes during the review meetings. Pivot tables are sufficiently easy to use that professionals and executives could explore the data and discover hard evidence for and against various hypotheses themselves. Executives and product managers were using the same sales reports for top-level summaries and drill-downs to segment details, which improved communications across the company. Once teams had solid facts, discussion could turn to deeper issues, such as why the various ratios and time trends differed from one segment to another. Answers to these questions often involved input from sales managers, technology mavens, and industry experts, which resulted in better decisions and better organizational buy-in to those decisions. The pivot tables and charts below We suggest you download a free sample and play with I to get a better idea what these reports can do for you. 3 Customizable Spreadsheet Solution ModelSheet's Customizable Spreadsheet Solution Sales Reporting and Analysis implements some of the sales reporting methods described above. It provides pivot tables and pivot charts that segment revenue and sales units by product, sales page 5 of 7

6 region, sale channel, and customer industry. The reports include trailing year summaries. Order attach rates, color maps, customer reports, and installed base reports show above for the case study are not included. Visitors can customize and download spreadsheets for Sales Reporting and Analysis at Figure 5: Sample pivot table showing revenue by sales location and customer industry Sales, Q2 7/13/06 Pivot tables make it easy to drill down in one product family or geographic region or industry Rev-or-Units P Family Product Ind Family Rev (All) (All) (All) 06Q2 T4Q Ind Group Region Location Aero Defense Auto Electronics Ind Equip Tier 2 Grand Total NA NA-National $35,860 $3,962 $4,069 $245 $832 $44,968 NA-Regional $6,839 $2,297 $9,098 $1,645 $6,435 $26,314 NA-Other $6 $21 $7 $1 $6 $41 NA Total $42,704 $6,280 $13,174 $1,891 $7,273 $71,322 EMEA France $2,840 $2,051 $1,858 $222 $2,094 $9,065 Germany $2,474 $6,007 $2,304 $1,123 $1,896 $13,803 Nordic $1,620 $1,318 $2,409 $988 $1,212 $7,546 UK $3,029 $1,086 $1,719 $159 $885 $6,878 EMEA-Other $3,554 $1,455 $3,904 $2,040 $2,585 $13,538 EMEA Total $13,518 $11,917 $12,194 $4,531 $8,672 $50,831 APLA Japan $419 $3,893 $3,598 $1,427 $1,255 $10,592 APLA-Other $1,090 $1,265 $2,963 $631 $1,032 $6,981 APLA Total $1,509 $5,158 $6,561 $2,058 $2,288 $17,574 Grand Total $57,731 $23,355 $31,930 $8,479 $18,232 $139,727 Figure 6: Sample pivot chart showing revenue growth by geographic region Trailing year revenue makes long-term trends easier to see. Revenue by geographic region Trailing year revenue by geographic region page 6 of 7

7 4 Conclusion ModelSheet's Customizable Spreadsheet Solution for Sales Reporting and Analysis gives you flexible reports for spotting macro trends in sales total and smaller trends in small segments. Pivot tables and pivot charts provide exceptional flexibility and make it easy to view sales data in many ways. This model can help you make better decisions about resource allocation in marketing, sales, and product development. I would like to acknowledge collaboration with Howard I. Cannon of ModelSheet Software who wrote the software that makes the spreadsheet models ModelSheet Software, LLC. All rights reserved. ModelSheet and the ModelSheet logo are registered trademarks of ModelSheet Software LLC in the United States and/or other countries. Microsoft, Excel, Internet Explorer, PivotChart, and PivotTable are trademarks of Microsoft Corporation. All other trademarks are property of their respective owners. page 7 of 7