Norm penetration

The share of comparable accounts that buy a category at all, which decides whether the category is expected of an account.

DefinitionThe share of comparable accounts that buy a category at all, which decides whether the category is expected of an account.

Norm penetration is, per category, the fraction of the comparison group that buys the category. It is separate from the norm share, which is how much of their spend those buyers put in it. A category with penetration below a stated floor, often half, is not expected of the group, and an account without it has no gap. Aggregates at ten percent of electricians is the example: an electrician without aggregates is normal, and the gap is zero.

How it is computed

Accounts in the comparison group buying the category, divided by accounts in the group.

Example

Ninety-two percent of builders buy aggregates; ten percent of electricians do. Aggregates are expected of a builder and not of an electrician.

Where it goes wrong

Every category expected of every account. The gap list fills with products the customer has no use for.

Articles that use this term

Wallet share and penetration · Construction and building materials

Category share by trade: plumbers, electricians and builders against their own norm

How a builders' merchant measures each trade account's category basket against the norm for its trade rather than against the branch average: the categories a plumber's account typically buys and at what share, the same for an electrician, a general builder, a roofer, the accounts below their trade's norm in a category they should buy, the value at norm, and why the trade field on the account master is the most valuable column the branch never fills in.

16 Sept 20263 min read Wallet share and penetration

How to read a whitespace grid: expected empties, returning lines, and the cells to ignore

A reading guide for an account-by-product whitespace grid: why most empty cells are not whitespace, the norm penetration row that says which columns are expected, the three kinds of empty cell and the shading that marks them, why returning lines come first, the value column that ranks the rows, the cannot-buy cells to ignore, and the cell to act on first: the largest expected empty with a returning-line history.

16 Sept 20263 min read Wallet share and penetration · Foodservice distributors

Menu-driven demand: what a kitchen should be ordering, given what it serves

How a foodservice distributor estimates each kitchen's expected category basket from its menu type and covers rather than from the segment average: the basket norm per menu type from the distributor's own fully-supplied kitchens, the categories a kitchen of that type buys that this one does not, and the gap valued, so the route rep's list says which categories to ask about at which door.

16 Sept 20263 min read Wallet share and penetration · Construction and building materials

Category share by trade on five accounts: the whole arithmetic on one page

The complete category share by trade calculation on five trade accounts at one branch, small enough to check by hand: each account's spend by category from the ledger, its trade from the master, confirmed or inferred, the trade norm per category from the full-supply accounts of that trade, norm penetration, category share against the norm, the gap per category valued at the account's spend, the untyped account excluded and counted, and the assertion that category spend sums to the ledger, so a reader can reproduce every figure and then run it on their own ledger and account master.

17 Sept 20263 min read How-to guides

The worked examples: every measure on ten rows you can check by hand

A hub for the worked-example pages on this site: each core measure computed in full on a book small enough to check by hand, ten accounts, ten deals, ten invoice lines, five clients, four territories, with every intermediate figure shown and the identity at the end. This page lists them by measure with what each example demonstrates, so a reader can reproduce the arithmetic before running it on their own export.

17 Sept 20268 min read Wallet share and penetration

Whitespace on ten accounts and five lines: the whole arithmetic on one page

The complete whitespace calculation on a grid of ten accounts by five product lines, small enough to check by hand: the filled cells from the ledger, the norm penetration and median spend per line from the accounts that hold each, which empty cells are expected, which are returning lines, which cannot be bought, the value per cell, the value per account, the roll-up and the identity, so a reader can reproduce every figure and then run it on their own export.

17 Sept 20263 min read