Over the past few years, we have traded a number of thoughts with clients and potential clients on the use of customer-level purchase information to drive sales and marketing initiatives.
Without getting into major minutia, I just wanted to recap
Answers Systems'
current capabilities in harvesting and reporting this data for CRM purposes. First of all, I would highlight that our system tracks the manufacturer's case shipments into and through distribution to the end-user. The depth of this detail does vary by transaction type, as I will note. The accuracy of our data approaches 100%. The timeliness of reported data, measured from invoice date, also varies depending on whether we are talking paper or electronic invoices.
At a high level, we track purchase transactions for a manufacturer's Operator agreements and Distributor agreements. Here is the more detail for each type of agreement.
Answers Systems & Operator Agreements
For Operator Agreements, our systems supports the development of one umbrella agreement covering all aspects of an Operator deal. This helps align all case purchases and $ spending against that one Operator. So, the agreement might involve headquarter programs (rebates + any number of marketing incentives), as well as deviated pricing through the distributor to the individual units.
Our system presents a deal proforma (plan) to the approver for each new agreement, and then tracks monthly/weekly performance against the original plan.
Operators are assigned a segment codes (we use the Technomic segment tree). All data such as SKU's, category definitions, customer numbers, sales hierarchies, etc., is synchronized . . . supporting effective two-way communication/translation between trading partners.
Regarding data timeliness, about 50% of Operator Headquarter billbacks (e.g., ARAMARK) are electronic. About 80% of Distributor billbacks claims are now electronic. Electronic claims are received, audited and posted to the reporting system is 3 - 4 days. Paper claim data is received, audited reconciled and reported in about 18 days. Not quite "real-time, but almost . . . .
In terms of transaction depth . . . for electronic claims we track the alignment between Distributor → Operator HQ → Operator store level (again, dollars and cases).
The implications of timely/accurate reporting are obvious. Visibility into cause/effect relationships can be established. We can see long-term purchase trends. There is transparency into agreement compliance issues. Benchmarking vs. established "norms" can be quickly identified and reported by region, territory, segment, product category, etc.
Answers Systems & Distributor Agreements
For Distributor Agreements, we also support the development of a Master agreement with each distributor (e.g., one agreement for SYSCO HQ + one agreement with each OpCo...all rolling up under SYSCO corporate) . . . again for performance tracking reasons. So, all earned income, shelter, accruals, growth incentive programs . . . ad-infinitum, can be developed and tracked under a single agreement.
We have the same proforma, tracking and reporting capabilities as Operator agreements. Same speed and accuracy for paper and electronic claims.
The one obvious difference is generally the depth of data. Due to the distributor's "secrecy veil", operator-level reporting for their "Street" operators is usually not available. So, we end up aligning/connecting distributor spend with "street" cases. We calculate this by taking total sales into distribution and then sorting-out all cases sold under operator agreements...with the net being identified/sorted as "Street" sales.
This still allows the tracking of the spend by distributor, by geography, by SKU and product category and still supports visibility into cause/effect relationships and performance benchmarking. The data drilldown is just not generally available at the operator unit level.
The Local Leverage Operator (LLO) tracking program we offer is a solution to this lack of street operator visibility. So, one ends up with the same unit-level data as described under Operator Agreements . . . including the ability to track transactions by customer, segment, category, etc.
If a manufacturer has a CRM system, unit-level transactions for street and chain customers can be fed into that system. Certainly, this type of transaction detail is essential in the effective management of customer relationships.Technorati tags: agreements, trade promotion management, billbacks,claims,local leverage operator