Issue link: https://www.e-digitaleditions.com/i/751848
November/December 2016 57 DISPENSE SOLUTIONS FOR BEER, WINE & COCKTAILS Customers want choice today. We understand the importance of delivering reliable, high-quality, yet cost-effective dispensing solutions for beer, wine, and cocktails. Micro Matic thinks long- term when providing solutions and support services. From a single kegerator, to 12 beers on tap, to 100 kegs in a remote location. is what's on tap. FRESHNESS TAP INTO A BETTER EXPERIENCE! 866.327.4159 // micromatic.com continued on page 60 focusing on both the number of lines per order and the aver- age order value. The result should be higher sales without additional activity or cost. The reality is that when most fi rms think about enhancing sales, they inevitably look to increasing the customer base. While this is certainly a desirable activity over time, it does nothing to change the economic structure of a typical order. All things being equal, with additional customers, the fi rm will increase the number of orders averaging the same number of lines per order and the same order line value. Sales and payroll costs will tend to move upward together. In sharp contrast, if fi rms changed the nature of the orders received from existing customers, it could enhance sales with only a modest increase in payroll costs. The assumption is that the same set of customers would be placing the same number of orders, but with some minor tweaks to the order size. This is shown in the Potential Results column in Exhibit 1. At the top, the number of orders remains the same. The fi rst change is that the number of lines per order increases from 5.0 to 5.1, a very modest change. The net result, though is that the number of order lines processed increases by 2,667. This does represent slightly more work. However, since the number of orders being processed is the same, the increase is modest. From a strategic perspective, the 2,667 more lines processed means that competitors collectively are processing 2,667 fewer lines. It is not only an operational change but a competi- tive one as well. Finally, the average line value is increased by 1 percent which takes the fi gure from $150.00 to $151.50. Once again, it is a small but will probably be a challenging change to opera- tions. The net result is that sales increases from $20,000,000 to $20,604,000, an increase of 3 percent. It is not an earth- shattering number, but it is important. It represents organic sales growth that is not dependent upon the market. It also is achieved with only a modest increase in payroll costs. Order Size Strategies and Tactics The two keys to changing order economics in a signifi cant way require developing both a sophisticated information reporting system and a more action-oriented mindset. In short, the proper information must be available and it must actually be used in decision making. Using Big Data If the fi rm does not know its average lines per order or its average line value, then it has no chance of improving them. It is not just enough to have the information at the total fi rm level. The information must be accumulated and available for reviewing individual customers and individual salespeople— both inside and outside sales. This is yet another example of