Sign in

Blog · Wallet share and penetration · Construction and building materials

Contractor share by category for builders' merchants and building materials suppliers

How a merchant or building materials manufacturer measures share of each contractor's spend by category from the trade ledger: categories bought against the norm, lapsed trade accounts per branch, an optional project overlay, and the reconciliation to invoiced sales.

The short answerContractor share by category is the categories a trade account buys from you against the categories similar contractors buy, per account, valued at branch margin. Lapsed accounts are those with no purchase in a window, ranked by past value. Both come from the trade ledger by account, category, branch and date. Roll them up per branch and assert that account sales sum to branch sales sum to invoiced sales before the branch works the list.

A branch manager at a builders' merchant knows the top twenty trade accounts and their site managers by name. Below them sit hundreds of contractors buying timber and nothing else, and dozens who used to buy weekly and have gone quiet. Both lists are in the trade ledger. This guide shows how to get them out per branch and reconcile them to invoiced sales.

The measures

Per trade account:

Category share = categories bought ÷ categories in the norm for the contractor's type Lapsed = no purchase in the larger of the global window and three times the account's own interval

Per branch:

Gap value by category, lapsed value by account, and the active account count against the trailing year

The rows you need

  • Trade ledger: one row per invoice line or per account, category, branch and period, with value. From the merchant system: most export this as standard.
  • Account master: contractor type, size band, branch.
  • Category list: timber, aggregates, plumbing, electrical, tools, and so on, at the level the counter sells.
  • Planning data: optional, for the project overlay.

Account identifiers only.

The roll-up

  1. Account by category: value, bought flag.
  2. Account: categories bought, gap against the norm, valued at branch margin; last purchase, lapsed flag, past value.
  3. Branch: gap list, lapsed list, active accounts. Assert that account sales sum to branch sales.
  4. Region and company: assert that branches sum to the region and to invoiced sales.

invoiced sales = Σ regions = Σ branches = Σ accounts = Σ categories

The by-branch equality catches an account served by two branches after a boundary change. The by-category one catches a category merged in the merchant system.

A worked example

Small contractor band, norm of four categories. One account at one branch.

Category Bought Trailing 12m In norm Gap at margin
Timber Yes £41,000 Yes
Aggregates Yes £9,000 Yes
Plumbing No Yes £3,400
Electrical No Yes £2,900
Tools No No

Half the norm, £6,300 of gap at margin. The same branch has 84 lapsed accounts by the rule above, worth £310,000 in the year before they stopped. The two lists together are the branch's quarter, and the counter staff work the first while the rep works the second.

The project overlay

Where the merchant buys planning data, active projects in the branch's area are matched to trade accounts by the contractor named on the application. Projects with no supplying account are a prospect list. It is an overlay because it depends on data the merchant may not have; the ledger measures do not.

Where it goes wrong

Cash account. The generic counter account is the biggest account at every branch. Exclude it from the account measures and show its value separately.

Boundary changes. An account moved between branches without a date appears in both. The branch assertion fails; the fix is a dated transfer.

Lapsed for a good reason. A contractor between jobs will be back. Let the rep mark the reason and keep the account on a watch list.

Categories at the wrong level. A hierarchy with a thousand products makes every account look under-penetrated. Measure at the category the counter sells.

Every week, per branch

Mapped once, the ledger export produces the gap list and the lapsed list per branch every week, reconciled to invoiced sales. Covirage builds this from the export as it is. The construction page describes the setup, and you can upload a sample ledger export and see the roll-up on your own rows.

Questions people ask

What is a lapsed trade account?

One with no purchase inside a window you set, ninety days being usual for active contractors. The account's own buying rhythm is a better guide: a contractor who bought every fortnight for a year and has not bought in eight weeks is lapsed whatever the global window says.

Do we need planning or project data?

No. The category and lapsed views come from the ledger alone. Where the merchant holds planning data, an overlay shows active projects in the branch area with no supplying account, which is a prospect list rather than a coverage measure.

Cash sales at the counter?

Counter sales booked to a generic cash account should be excluded from account measures and shown as their own line. Otherwise one account looks enormous and the real buyers are hidden.