Blog · Board and management reporting · Industrial distributors
The ten sales KPIs an industrial or MRO distributor should run on, each with its formula, the export it comes from and what it tells you: category penetration by branch, dormant accounts by prior value, quote conversion by count and value, lost lines from stock-outs, counter sales without an account, account coverage at cadence, price realisation against contract, share of spend at key sites, reactivation rate, and contribution per customer. Also the three measures most industrial distributors miss, the figures to drop, the identities, and who owns what.
An industrial distributor sells thousands of items across a handful of categories to customers who buy most of those categories from somebody. The measures that matter show which categories each account is missing, which quotes went nowhere, and which sales the shelf turned away.
| # | Measure | Formula | Export | What it tells you |
|---|---|---|---|---|
| 1 | Category penetration | Accounts buying the category ÷ accounts in the segment, by branch; categories held per account against the segment norm | Ledger with category; account master | Which accounts buy three categories where similar accounts buy six |
| 2 | Dormant accounts, by prior value | Prior-year revenue of accounts past k × own order gap ÷ prior-year revenue | Ledger | Revenue that stopped, ranked for a call |
| 3 | Quote conversion, count and value | Quotes matched to orders ÷ quotes decided; quoted value converted ÷ quoted value decided | Quote log; order file | Where estimating time goes and which customers price-check |
| 4 | Lost lines | Value of lines cancelled or unfulfilled for no stock, by branch, item and account | Order and shipment files | Sales the shelf turned away |
| 5 | Counter sales without an account | Cash and card sales by payer, repeated visits, value | Counter sales file | Walk-in customers worth a trade account |
| 6 | Coverage at cadence | Revenue of accounts touched within tier cadence ÷ revenue assigned | CRM; assignment file; ledger | Whether key accounts are being spoken to |
| 7 | Price realisation against contract | Invoiced price ÷ contract or matrix price, by line | Ledger; price file | Contract prices not applied; overrides at the counter |
| 8 | Share of spend at key sites | Revenue at the site ÷ estimated site MRO spend, from headcount or stated budget | Ledger; account master with site data | How much of a plant's spend you hold |
| 9 | Reactivation rate | Dormant accounts that ordered within 60 days of a logged call ÷ dormant accounts called | Ledger; CRM | Whether working the dormant list pays |
| 10 | Contribution per customer | Gross margin − cost to serve | Ledger; delivery and order files | Accounts that earn after what they cost |
Every one of these is computed per account, per branch and rep, and in total, and every one carries an identity that must hold before the table is shown.
Lost lines. No invoice means no record in the sales system. The order file has them. A branch losing 4 percent of ordered value to stock-outs is giving away more than most sales initiatives will ever add.
Quote conversion by value. Forty percent by count and 25 by value means the large quotes are being lost, and nobody has looked at which.
Counter sales without an account. The same van pays by card twice a week for a year. That is a customer nobody has opened an account for or visited.
A branch reports quote conversion of 41 percent. By value it is 26 percent. The twenty largest lost quotes are 38 percent of all lost value, and fourteen of them went to two customers, each of whom converted under 10 percent on more than forty quotes. Those two are using the branch to check another supplier's price, at a cost of about seventy hours of estimating a year.
Quotes issued. Volume of quoting is cost, not achievement. Conversion by value, and estimating hours per converted dollar, replace it.
Lines per order, alone. Interesting to operations; no sales decision follows from it.
Revenue per branch against last month. Mostly the calendar. Use the same period last year, or seasonally adjusted figures.
| Table | Must hold |
|---|---|
| Quote conversion | Quotes = converted exact + converted probable + lost + open within validity |
| Lost lines | Lines ordered = shipped complete + shipped short + cancelled no stock + cancelled other + open |
| Category penetration | Category revenue sums to the ledger; every account in one segment |
| Dormancy | Customers = dormant + active + too few orders |
A table whose identity fails is a table with a row missing or counted twice. It is not shown until it is fixed.
| Measure | Owner | Reviewed |
|---|---|---|
| Dormancy; coverage; reactivation | Sales manager; branch manager | Weekly |
| Lost lines | Branch manager with purchasing | Weekly |
| Quote conversion; counter sales without an account | Branch manager; inside sales lead | Monthly |
| Category penetration; price realisation; contribution; site share | Commercial director | Quarterly |
A measure with no owner is a metric, not a KPI; see KPI versus metric versus measure.
Ten measures, six exports. The three that pay first are lost lines, quote conversion by value and the counter customers with no account, because each is revenue already at the door. Covirage computes all of them from the exports industrial distributors already produce, files only, with the definitions stated and the identities checked. See Covirage for industrial distributors.
Because in industrial distribution the branch is where stock, counter staff and local relationships sit. Category penetration and lost lines vary more between branches than between reps, and a branch view shows whether a gap is a selling problem or a stocking one.
An order line the customer wanted that was cancelled or not fulfilled because the item was not in stock. It never becomes an invoice, so it never appears in a sales report. Valued at the order price, by branch and by account, it is the cost of stock-outs in the language sales and purchasing both understand.
By the quote reference on the order where the system carries it, and otherwise by customer, item and a date window, labelled as a probable match. Orders that match no quote are counted separately as unquoted business and never added to the conversions.