All manufacturers want customers who are eager to buy their products, but what happens when you’re unable to provide the products they want? Potential profits quickly turn into lost sales. This can occur when a customer requests an item that you don’t sell, that’s currently out of stock or that you can produce but can’t deliver soon enough.
If you can’t fulfill the customer’s needs, he or she will turn to a competitor who can. By tracking and analyzing these missed opportunities, you can better match your inventory to your customers’ wish lists — potentially increasing sales.
Start by creating a standardized lost sale report with the following fields:
• Name and department of the employee making the report,
• Item and quantity requested,
• Reason the item was unavailable, and
• Potential sales loss and gross profit loss.
The employee who dealt with the customer should complete a report for each lost sale.
Sometimes it’s not clear whether your company has lost a sale, so encourage employees to ask follow-up questions. For example, if a customer asks for the price of an out-of-stock item, ask if he or she would like to place an order when the product becomes available.
Once you begin tracking lost sales, analyze the data regularly and make necessary changes. Let’s say you discover that, because of inventory tracking errors, you’re mistakenly telling customers that items are out of stock. Then it’s time to update your inventory management software.
And if customers regularly request an item you don’t produce, weigh the pros and cons of adding it to your offerings. Even though you may have to hire more employees or purchase new equipment to meet the demand, the additional profits could be well worth it.
For more information contact Dennis McLaughlin [email protected].