If you could get all of the business available from each of your customers, how much would that be worth? Which of your customers has the highest potential? What is your market share for each of these customers?
These questions may not be easy to answer, but answering them will give you a better idea of where your company can grow. You could survey each account to find the answer, but that could take months or even years – and by the time you had your answer, things will have changed anyway.
A more practical approach would be to use existing data to create usable estimates. Here are some suggestions on how this can be done.
First, establish your company's historical sales per SIC code per employee ratio. Do this by assigning each customer a primary SIC code and a total employment count. Tally the annual sales of your customers by SIC code, and divide that by total employees in that SIC code. The end result will be an "average" demand per employee, which can then be used to analyze each of your accounts and each sales territory.
The second option is to establish consumption ratios using external data for your products, which can then be used to analyze SIC code by employment. This will provide a better estimate of the actual potential of the territory.
Rusty Duncan is the founder and Chief Markets Analyst for Industrial Market Information Inc. For more information on the product line analysis IMI can provide, please contact IMI or complete an information request form.
