I like numbers. They make sense to me. I trust them, I believe
in them and I’m motivated by them. They speak to me. They inform me
of how I’m doing, they update the results of my efforts and they
motivate me to do better. Numbers are powerful to me because I
understand what they mean and I make decisions based on them. I
play the numbers.
Playing the numbers may sound like a gambling term, but it’s
not. Numbers are a part of everything that we do. Making sense of
them, trusting them and allowing them to motivate us is crucial. If
we’re not playing the numbers, then we are gambling gambling with
our business and our future. You should play the numbers, too.
Many find numbers and mathematics to be intimidating. How many
of you reading this column mark up your products using a number
that someone else gave you because you “aren’t very good with
numbers?” How many of you rely on one number yearly sales to
evaluate your businesses? As a rep, I witness this uneasiness with
numbers over and over.
Well, I like numbers, and as a rep, I play the numbers all of
the time. The manufacturers that I represent meticulously feed me
my numbers. They tell me what my sales are to date; they project
them for the year and provide the previous year’s numbers to judge
my performance and my dealers’ performances. I can even break them
down by door styles, wood species and cabinet series being sold
These numbers are powerful to me because I both understand them
and use them. They allow me to move forward in my business with an
understanding of where we’ve been and where we’re going.
I’m not the only one using these numbers; my manufacturers are
using them, too. They are using them to motivate me to keep doing
better and better. Dealers/distributors should also be collecting
the numbers, interpreting them and using them to make
The most effective tool
that I use to interpret the numbers is my spreadsheet software. The
data e-mailed to me from my manufacturers can be quickly pasted
into the templates that I have already created. These templates
allow me to compare my latest numbers to the historical data that
I’ve maintained. I even incorporate very basic concepts such as
color coding the data to indicate which numbers, trends and
customers are doing well and which ones are not. This system allows
me to make quick decisions and to know what areas and customers I
need to concentrate on. This type of system can be easily utilized
by even the smallest of businesses.
So, what numbers do I interpret? Sales are number one, but I
look at much more than just the current sales numbers. Historical
sales data is just as important. I keep monthly sales figures in my
database for several years. I compare this month to the previous
month, this month to the same month from prior years, and this year
to previous years. I look at each and every dealer and look for
trends such as steady growth. If there is good growth, I need to
communicate this with my dealer and make sure that we all work to
maintain this trend. If the trend is downward, I need to find out
why. If you bought $500,000 from me this year, that sounds great,
but if you bought $750,000 from me last year, then there is a
You should be playing these numbers, too. Whether you are a
distributor, dealer or a salesperson, you should be comparing
current to historical data. Compare this for your salespeople and
their accounts. Trends need to be acted upon. Simply listening to
the current sales number is a gamble; you need to make sure that
your numbers tell you the whole story.
I also look at the
numbers and compare each dealer’s sales to my other dealers. It’s
easy to rank them by the numbers alone, but I adjust them based on
each individual market. A big number in a small market is more
impressive than the same number in a large market.
Dealers/distributors can do the same thing. Compare the sales
between your salespeople, making adjustments for the market and
market size that they service for you. Make sure that you are
getting the numbers necessary from each person, and each
One of the most important numbers that I track closely is the
profitability of my accounts. We maintain a spreadsheet showing us
all costs associated with each customer, relate them to total sales
and then demonstrate the profitability of each account. I have one
manufacturer that e-mails me monthly and color codes the customers
as to each one’s profitability. This is a number that we must play,
because if the account is not profitable, there are critical
decisions that need to be made.
Do you pay attention to the profitability numbers? Compare gross
profits on jobs. Compare between customers and salespeople. If you
sell a million dollars a year to your biggest builder account but
you don’t make any money, then your time, money and efforts are not
being well spent. Let the numbers tell you whether you’re on the
Another critical statistic is closing rates. Value needs to be
assigned to the amount of quotes and efforts that are expended and
the sales that result. You want to persistently track quotes and
sales so that you can maximize your efforts. Work the numbers,
reduce your efforts and close more sales.
I personally derive great motivation from my numbers. When I
view updated numbers, I have an internal drill sergeant that
bellows inside of my mind demanding that I do better. I also find
that outside motivation is extremely beneficial. When one of my
manufactures creates a contest or rewards are setup to reach
certain numbers, I find that I’m pushed even more to succeed.
Motivation is another extraordinary use for numbers. Develop
contests or reward your salespeople based on numbers such as
increased sales or, better yet, increased profitability.
Create an environment where your people are anxious to see and
play their numbers. Make it fun for you and your people to be
motivated by numbers.