Until recently, the strategic use of channel point-of-sale (POS) data has been more pipe dream than reality for electrical manufacturers and their partners. For years, distributors, manufacturers and independent manufacturers' reps were reluctant to work in tandem. However, the recent POS standard approvals by the board of directors for the National Electrical Manufacturers Representatives Association (NEMRA), Tarrytown, N.Y.; the NEMRA Manufacturers Group (NMG); and the board of directors for the National Association of Electrical Distributors (NAED), St. Louis, suggests that electrical manufacturers and their partners may soon be able to utilize their POS data to increase revenues, reduce costs and profitably grow their businesses.

Consider these tips for using POS data to drive immediate business improvements.

Refocus sales resources on selling versus “manually” claiming channel sales. Collecting and using accurate and timely POS data allows channel participants to automatically track sales through the channel and quickly and correctly assign sales commission credits to the appropriate representative(s). Not only will the time and cost of manually claiming such credits be saved, but by refocusing sales resources, revenues can be increased by as much as 10 percent to 20 percent.

According to a survey of sales, finance and compensation managers at U.S. companies, salespeople spend up to 10 percent of their time tracking performance and calculating commissions. I know of a company with more than 150 sales reps who each spent an average of one day per month manually claiming sales for the purposes of calculating compensation. For the company as a whole, this equates to five years of lost sales time every year.

Electrical manufacturers representatives tell similar stories of misdirected personnel efforts. In fact, many reps dedicate individuals to performing only such tasks.

Maximize returns on lead-generation programs. An estimated 70 percent to 90 percent of sales opportunities are lost in the channel. POS data provides information on the outcome of every sales lead, including which partner received it and when and how it's closed. This allows manufacturers to track response times, close rates and sales, measure the return on investment (ROI) of lead generation efforts, recover and redirect open leads and route future leads to the most qualified partners. It also maximizes the ROI of future campaigns.

Eliminate waste from the channel and maximize the efficiency and effectiveness of channel partners. As already detailed, accurate POS data can save time, money and effort by eliminating what should be an unnecessary manual task. Furthermore, this data will help manufacturers build rich profiles of their channel partners based on actual sales versus self-reported data.

Improve inventory management. POS data can be used to maintain a real-time view of inventory levels at channel partner locations. In turn, this allows manufacturers to track inventory, rotate inventory to optimize channel sales and understand the bottom-line impact of various price change scenarios.

Improve financial reporting and forecasting. It's critical to have rigorous internal controls to support financial reporting in this era of increasing regulatory scrutiny and liability. POS data provides an auditable trail of actual product sales from manufacturer to rep to distributor to end user.

Increase the penetration of the small-and-medium-business markets. When enhanced with readily available market data, POS information provides manufacturers with deep-market intelligence concerning how well products are selling into specific vertical markets or market segments. It provides accurate information regarding what customers are buying and which channel partners are best serving those customers.

These are just a few of the benefits that can be achieved with POS data. InfoNow applauds NEMRA, NMG and NAED for helping turn this dream into reality.


The author is CEO of InfoNow Corp., Denver, a software and services provider that offers data on channel sales, including enhanced market intelligence on partners and end customers.