Illustrative scenario on fictitious data; the companies and figures are not real.
Sales performance analysis
Type of business: Building materials distributor (fictitious)
Sales grew in money terms, but the CEO is not sure whether the growth was real or just inflation.
1Problem
The sales report shows only the total; sales targets and team bonuses are based on that one number.
2Data
- Three years of sales invoices with price and quantity
- Sales targets for each region and representative
- Customer list and regions
3Analysis
- Splitting sales growth into price, quantity and product mix effects
- Analysing sales concentration and customer buying behaviour
- Comparing regional performance on volume growth
4Finding
In the sample data, most of the growth in money terms came from price increases, while sales volumes had fallen in several regions.
5Action
- Set volume targets alongside revenue targets
- A programme to win back customers who are buying less
- A monthly real-growth report for the board
6Result
In this scenario, a true picture of growth emerges and sales effort is directed to the regions and customers that are declining.