DACOR APPLIANCES MEASURING SALES TERRITORY PERFORMANCE
Dacor Appliances is the premier manufacturer of high end kitchen appliances in the United States. Half of the company’s sales territories were managed by company sales representatives, the other half were managed by distributors. There was not an established measurement to compare sales performance vs. market potential, and it was difficult to know which group of territories was performing better.
The goal of the project was to develop an accurate, easy-to-understand measurement to compare sales vs. market potential within each sales territory
The goal is to geographically allocate a 100 point index representing 100% of the US market potential. If we’ve done a good job creating our index, then 1% of market potential in New York is the same as 1% of market potential in Oregon, California, and Nebraska. The results for the four states are shown in the table below. By adding sales data, we can calculate sales performance vs potential in each state, no matter how large a state is.
CALCULATE RATE OF REVENUE FLOW
The math is simple – but powerful, and can be used to in many ways to provide strategic guidance to a company. The result calculates how FAST cash is “flowing” out of each state (which is very different than how much). We can compare each state on equal grounds- whether that state is New York, or New Hampshire.
By applying this simple formula to all four states in this example, the following table results, showing that cash is flowing very fast in Oregon, but not that fast in New York. It shows that a state similar in size with New York (California) is generating sales 38% FASTER, more efficiently, than New York. It indicates by all standards, that New York is under-performing in spite of HOW MUCH total revenue it is generating for the company.
Dacor was able to compare the performance of every territory, every state, every metropolitan area, and make more informed, better strategic decisions. Changes were implemented, and as a direct result of these changes, the company generated an additional $20M the following year.
For more information this case study, or on how your organization can estimate market potential and develop a strategy for improved sales performance, contact GeoStrategies at (800) 738-4GEO
Other important Case Studies
Convaid is the market leader in collapsible pediatric wheelchairs. Convaid manufactures its premium-quality wheelchairs in its Torrance, California facility and ships to distributors throughout the world.
How Do You Roll (HDYR) is a hip and growing “fast fresh casual” sushi concept. Started in Austin Texas, the founders approached GeoStrategies for assistance in their market rollout to…
The Chicago Fire is one of Major League Soccer’s premier teams. Established in 1997, the team won the MLS cup in its first season, and has gone on to win…