October 26, 2008

Employee Orders: A Barometer Of Business Success

Maybe your company offers employees a discount when they place an order. If so, good for you!

If you analyze customer information at this company, great for you! You have the inside track to fascinating information.

You're likely to have a merchandising team that has passion for the products they offer. This merchandising team might believe that they are just a competent marketing team away from having tremendous success.

If you find yourself being blamed by your merchandising team for not driving sales and profit, give this analysis a try:
  1. Identify how many employees you had last year at this time.
  2. Identify how many employees you currently have. Somebody in Human Resources would love to help you identify an accurate number!
  3. Sum total demand from employees during September 2007.
  4. Sum total demand from employees during September 2008.
  5. Calculate spend per employee, September 2007 and September 2008 (i.e. $10.00 in September 2007, $8.50 in September 2008).
  6. Calculate comp employee sales ($8.50 / $10.00 - 1) = -15%.
Twice in my career I was pummeled by a merchandising executive for being a lousy marketer. Twice I ran this series of queries. Twice I observed that employees didn't like the merchandise any more than customers liked the merchandise. Twice I ended up with a grumpy merchant, unable to blame marketing for sales shortfalls.

There are few things in database marketing more convincing than the sales generated by employees. If employees don't believe in the merchandise, how the heck are customers supposed to believe in the merchandise?

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