"Sorry, we don't carry that item." Or perhaps, "No, that's not a part of our service package." How many times a year do your salespeople utter these words or ones like them? The specific number is critical because if you don't know it, you could be losing out on profit potential.
Although you have to focus on your strengths and not stray too far afield, your customers may be crying out for a new product or service. And among the best ways to hear them is to track lost sales data and decipher the message. Our most successful clients are continually gathering information about missed opportunities, whether it is the opportunity cost of not having the right product mix or not being successful when opportunities are presented.
Three steps to success
A successful lost sales tracking effort generally involves three steps:
- Get the data. Ask your sales associates to log every customer request and to question customers further to get at the heart of what they need. Train sales associates to record information such as the date of request, item requested, and the reason the item was unavailable.
- Crunch the numbers. Calculate how much you could sell if you had the new items in stock or offered the additional service. Naturally, you'll need to bear in mind that meeting customer demand might involve spending money on equipment or personnel to expand your product or service line. Key data points to examine include estimated potential purchases, potential sales losses, and estimated gross profit losses. Develop a report that lays out this and other information so you can see it in black and white.
- Talk about it. Run a lost sales report monthly and discuss the results with your management team.
Seek to establish consensus on where your best strategic opportunities lie. Sometimes, you'll want to be patient and let trends develop before acting. Other times, you might want to strike early to seize an underdeveloped market.
A better grip
Lost sales are lost opportunities. By getting a better grip on your customers' needs, you can build a stronger bottom line. Learn how we can help you create and maintain a lost sales tracking system that best suits your company's distinctive needs.