Distributors, Is "Dark Data" Keeping You Stuck in Reactive Mode?

Many distributors today have lots of data with no easy way to see the insights within, resulting in having to put out fires as they spring up. Here, Matthew Christus examines forward-looking metrics you should track to find sales opportunities and potential service problems before they happen.

If you're a distributor that processes transactions through an ERP or another system, you have good data. Unfortunately, "dark data" — those isolated bits of information hidden in your systems — are pretty useless without a way to mine, display and interpret them. But that's the situation many distributors today are in: lots of data with no easy way to see the insights within.

If you're in this position, you do your best to put out fires as they spring up. Unfortunately, in this highly competitive industry, one mistake can be enough to cost you a customer. A reactive approach to managing your business simply isn't good enough anymore.

Here are five forward-looking metrics you should track to identify sales opportunities and uncover potential service problems before it’s too late:

  1. Monthly customer spend: When you notice a decline, you can reach out to identify why and help to resolve any issues before you lose that customer entirely. If you notice a sudden jump in spend, you can reach out to find out whether your customer is about to experience sudden growth, perhaps due to a new big new customer. From there, you can offer your assistance and expertise to help them navigate that growth successfully.
  2. Top five fastest-moving items: When you have visibility into what's moving quickly, you can avoid future stock-outs, helping your customers focus on what matters most — growing sales.
  3. Number of returns: Tracking returns by customer or SKU can help you quickly identify trends that may represent products that are defective or being used in the wrong applications. This prevents future returns and unhappy customers, and also provides an opportunity for your salespeople to proactively offer the right solutions.
  4. Percentage of partial/late deliveries: It doesn't matter if you think you have timely deliveries if that's not what your customers are experiencing. When you use advanced software tools to view shipment and delivery data from the customer's perspective, you can identify problems before they cost you customers or sales.
  5. Spend with competitors: Some tools, including our Advanced Insights dashboards, allow you to track customer spending and spot buys from other distributors, helping to uncover sales opportunities and spot competitor threats before they grow.

The key to getting the most from metrics such as those outlined above is to embrace what they're telling you. Even if the data tells you something that goes against what you have always believed, that visibility will give you a tactical advantage. You can use it to talk with customers about ways to make not just your own operations more efficient — but your customers’ operations, as well. In other words, the right data can help your sales reps bring more than donuts to the table.

The good news: Most of the data that distributors need is there, just hiding in the dark. All that's needed is a tool that can shed some light on it. Distributors that find a way to unearth these insights can act as sophisticated as an Amazon, with the added benefit that their customers aren’t working with just an algorithm — they’re working with a distributor they've partnered with for 15 years.


Matthew Christus is Chief Customer Officer of MarginPoint, which partners with distributors to provide mobile inventory management and analytics solutions to HVACR, electrical, plumbing, facilities management and other organizations. Reach Christus at [email protected] or visit marginpoint.com.

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