Transitioning towards a data-driven approach in sales, inventory, and pricing decisions doesn’t have to be an overwhelming or instantaneous process. As a distributor, you can gradually take small, manageable steps to integrate data analytics into your operations. Here are some practical steps to help you get started:  

1. Begin with what you have  

As a distributor, you should have access to sales records, inventory levels, and customer information. Start by analyzing these existing data sets for insights, such as best-selling products, seasonal trends, or frequently out-of-stock items.    
 
We suggest you ask some foundational questions. For example, if you’re analyzing a customer, how is that customer doing compared to other customers? Here, you can consider both absolute and relative performance to determine if they are top-tier customers across key metrics and if they are getting better or worse compared to other customers.  
 
From there, you can establish if they are getting better discounts than they deserve based on their level of sales or average order size, identify opportunities for growth, and mitigate any risks, such as declining trends in certain products.  
 
Tools like Sales FOCUS+ can help you gain deeper insights into your sales data. Offering a 360° view of your customers, our scorecards combine key customer insights, benchmarking, and prescriptive actions to put you back in control.  
 
2. Set clear, achievable goals  

Identify specific, achievable objectives for your data-driven initiatives. For example, you could reduce inventory costs by a certain percentage, improve delivery times, or increase sales of a particular product line. Clear goals will help focus your efforts and make the benefits of data analysis more tangible.  
 
If you struggle to identify goals, ask yourself what frequent performance pain points are leading to friction between departments, inefficient meetings with little resolution, or sustained performance leakage.  
 
The most common challenges we hear from distributors revolve around: 1) maintaining/improving margins given greater competitive pricing transparency among customers; 2) not having the scorecards to hold suppliers accountable; and 3) reducing bloated inventory to efficient levels. What opportunities can you jump on for performance improvement?  

3. Use simple tools and techniques  

You don’t need sophisticated software to start. Basic tools like spreadsheets (e.g. Microsoft Excel or Google Sheets) can be good starting points for data sorting, filtering, and basic analytics. However, if you want to take your analytics to the next level, they are not ideal for benchmarking.  
 
Numbers in tables are difficult to compare side by side or down a column to see the relative importance of one cell vs. another. Over time, moving toward proper graphing and data visualization is essential to ensure obvious risks and opportunities jump off a page.  
 
If a spreadsheet has 10 separate columns of metrics, for example, what good is it if you can sort the spreadsheet in 10 different ways and get 10 different results? It’s more beneficial to take those 10 metrics and turn them into one or two aggregated scores (a “grade point average” or “quarterback rating”) so that it’s simpler to understand and take action.  

 At ACTvantage, we’ve literally written the books (7 best-sellers) on how to develop simple, best-practice scoring models to rank every customer, product, and supplier to make faster, more profitable decisions in sales, inventory, pricing, and supply chain efforts. And if you want to act even more quickly, we have ready-made scorecards to embrace our best practices and get immediate results while you gradually develop and round out your in-house analytics capabilities. 

4. Educate and train your team  

Encourage a culture of data literacy within your organization. Provide training to help your team understand the importance of data and how to use it effectively, or hold regular meetings to discuss data findings and implications.   
 
Step-by-step education about underlying analytics principles can make data-driven decision-making more manageable. It helps beat impostor syndrome and fixed mindsets around insecurities around being afraid of numbers. It can also provide the foundation to turn one-off projects into habits and routines that make it easier to maintain analytics efforts and sustain long-term performance.  
 
At ACTvantage, we develop analytics capabilities by offering tools and training in inventory, pricing, customer retention, and purchasing that drive your top and bottom lines.   

5. Implement basic reporting and dashboards  

Regular reporting can help you make informed decisions and quickly identify areas needing attention. Integrate analytics into workflows and tools your people already use and add quick links to context-specific dashboards they can access in the ordinary course of business. This will go a long way to help grow their familiarity and comfort with analytics.  
 
Develop simple reports or dashboards to track key metrics like sales performance, inventory turnover, and customer demand patterns. Sharing simple dashboards that display relative performance/ranks can spur friendly competition and motivation that catalyze widespread improvement.  
 
Refer to dashboards in meetings to reinforce the importance of metrics while building analytics into corporate habits and routines. Live dashboarding tools are more efficient and offer the added benefit of automatic updates.  
 
Consider tools like Price Perfect for pricing optimization and Fusion Analytics for cross-functional reporting and analysis. These actionable, plug-in scorecards offer a 360° view of your data, including robust benchmarking and a wealth of proprietary customer, product, supplier, and market segment insights to maximize profitability, increase accountability, remove inefficiencies, and align your team.  
 
6. Experiment and learn from the results  

Start with small experiments, like adjusting inventory levels based on sales trends or changing marketing and sales strategies based on customer data insights. Monitor and learn from the outcomes, using what works to inform future strategies.  
 
Get your team involved in setting up those experiments. Classic software design involves obtaining business and user requirements so that the end product will resonate with the user, yet we often overlook this when developing and designing analytical dashboards.   
 
Ask your team what information they wish they had when talking to clients and suppliers. Tools like Supplier FOCUS+ and Inventory FOCUS+ can offer a great foundation to help you run experiments, optimize your relationships with suppliers, and improve your approach to working capital based on data-driven insights.  

7. Gradually improve data quality rather than using dirty data as an excuse not to act

 As you become more comfortable with data, focus on improving its quality. This might involve standardizing data entry processes, cleaning existing “dirty data”, or integrating data from different sources for a more comprehensive view.   
 
While this might seem overwhelming, use an analytics project as a catalyst to clean your data. The project’s execution will highlight where the data may need cleaning, and you can then clean as you go.  
 
At ACTvantage, our scorecards can help you maintain and improve data quality. We assess over 36 intelligence points across critical functions, offering distributors integrated technology, tools and training to spot and seize on the most significant performance opportunities across business operations, regardless of where you are in your data and analytics journey.  

 8. Seek feedback and adjust  

Regularly seek feedback from your team about the data tools and reports. If you’ve started implementing small experiments, don’t forget to go back to your team to find out what’s working and what’s not. Understanding their challenges and requirements can help you make necessary adjustments and ensure the data-driven approach is practical and user-friendly.  
 
Beyond that, share your analytical insights with your customers and suppliers. Not only is this a great way to reinforce the use of analytics, but it also establishes you as an expert, and experts command higher prices. Products can become commodities that result in price wars. On the other hand, providing unique, analytically driven insights differentiates you as a trusted advisor and creates a bond that transcends price.     

9. Plan for future investment  

As you see the benefits of a data-driven approach, start planning for future investment. This might include more advanced analytics software, additional training, or hiring staff with expertise in data analysis.  
 
AI, for instance, might be a natural progression. It can be a powerful tool to attack a sequence of specific problems, but don’t forget the human element! Specific algorithms risk reinforcing patterns that can be limiting, so make sure your analytics don’t define your customers too narrowly. A broader view of analytics, coupled with an exploration of aspirations and storytelling, can help humanize interactions with customers and suppliers in a way that rounds out AI.  

10. Stay informed and adaptable  

The field of analytics is constantly evolving. Stay informed about new tools, techniques, and best practices. Be willing to adapt and refine your approach as you learn more and your business needs change.  
 
It’s important to expose yourself to experts who give you a roadmap of where you want to be over time and adjust your expectations and timetables to acknowledge that it’s a marathon, not a sprint. Most companies are still in the first mile of that marathon.  
 
The difference between elite and average performers is that elite performers thrive on being uncomfortable. They double down on what they don’t know to develop their expertise, and it’s the last 5% of knowledge that makes someone “world-class.” Don’t put pressure on yourself to become an expert overnight!  

 By taking these small steps, you can gradually build a more data-driven culture, which will lead to more informed decision-making and improved sales, pricing, and inventory management performance.  

Contact us today to learn how ACTvantage can help you implement these steps and accelerate your journey towards data-driven decision-making. Regardless of your analytics maturity, there is always room to improve and let’s move towards profitable growth.