By Franita Bosman, MD & Founder, BD- Nav
When trading for the new year starts, the mantra “What gets measured gets managed” is never more relevant than in the FMCG retail sector. During this time, one reflects on the year that has passed and what challenges it held, but also the successes achieved. The only way to define whether you failed or succeeded is to measure your performance against your set targets. The practice of setting and measuring targets is not just a formality but a crucial mechanism that can drive a business toward its goals.
Realistic targets align with commercial trading term agreements between retailers and suppliers for mutually beneficial results. The D-Nav Toolkit aligns Key Performance Areas (KPA’s) and Key Performance Influencers (KPI’s) according to standard retail trading terms. KPA’s and KPI’s are critical to Key Account Managers (KAM’s) for effective target measurement as, not only a metric of success, but instead a roadmap to achieving and exceeding sales goals. Here, we look at the role of actionable KPIs, especially those defined by the D-Nav Toolkit as influential on the Rate of Sale (ROS) which becomes pivotal.
KPIs serve as the compass guiding KAMs. They are not just numbers – but actionable insights. When KPIs are closely tied to the Rate of Sale, they provide a clear picture of product performance, consumer demand, and market trends. This direct correlation helps in identifying which products are performing well and which require strategic changes in marketing or placement. Imagine seeing all these insights on one page, highlighting underperforming KPI’s. We can tell you for a fact, that it makes our lives at BD-Nav so much easier, having a tool which navigates us to the corrective actions required.
One crucial aspect of effective target measurement is tracking performance against set targets like the KPA KwikView does. This process goes beyond merely observing sales figures; it delves into understanding the 'why' behind the numbers. For instance, a dip in the ROS could be due to factors like inadequate shelf visibility, pricing issues, or changing consumer preferences. By regularly tracking these metrics, KAMs can swiftly implement corrective actions – thus minimising potential revenue loss and capitalising on market opportunities.
Further, alignment with retailer trading term agreements is vital. This data provides a near real-time snapshot of how products are performing at the point of sale. Integrating this information with the set KPIs allows for a more nuanced understanding of sales trends. It can highlight discrepancies between expected and actual sales, offering opportunities for timely interventions. This alignment ensures that the strategies implemented are grounded in actual sales performance, making them more relevant and impactful.
Having actionable KPIs tied to the ROS empowers Key Account Managers to make pre-emptive data-driven decisions. The key is to use near real-time data for pro-active, objective, assessment and strategy formulation, based on solid data rather than assumptions. This is particularly crucial in an environment as fast-paced and competitive as FMCG retail, where market dynamics can shift rapidly.
Mastering the art of target measurement with actionable KPIs is essential for driving sales growth, maintaining a competitive edge, through the D-Nav Toolkit’s alignment with retail partners for mutual success.
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