8 Feb 2024 | Windward Software
How to Report on Sales by Customer – Who are your most valuable customers?
This Windward Webinar focused on identifying and utilizing the Customer Lifetime Value (CLV) using Windward System Five to help businesses strategize about ways to find new business or building the business they have. The concept of CLV is discussed as it refers to the total they've spent with the business. You'll learn different ways to calculate this value.
- Kyle opened the webinar by introducing the day's topic on how to report on sales by customer and the presenter, Scott Roxanne.
- Scott began by discussing how to identify the best customers using system five, with the intent of taking action to find more customers like that or to build the business with those customers.
- He further discussed the customer lifetime value concept, which indicates how much a customer has spent with the business over the whole time they've done business with you.
- Scott showed how to use key reports to find out what people have spent with the business over a period of time or the entire time they've been with the business.
- He also discussed how to filter that by product type and understand the customer's buying behavior by season or invoice by invoice.
- He demonstrated the use of the Ranking Sales report, the Design Your Own customer supplier report, the customer yearly sales report, and the category sales by customer report.
- Scott stressed the importance of thinking about the total money made from a customer during the time they do business with the business.
- Towards the end, the webinar promoted an upcoming workshop that will discuss tactics and strategies to focus on customers once they've been identified.
0:06
All right, welcome, everybody, to today's webinar. I'm Kyle, and I'll be moderating today.
0:12
We're coming up on the halfway point in our Git Profitable series. Today's webinar is How to report on sales by Customer, And it's basically about identifying who your most valuable customers are, and Scott Roxanne's is going to be the presenter today. Go ahead, Scott. Hello, everyone, and thanks for coming today, and thank you, Kyle.
0:32
So, we're going to talk today about how to figure out who your best customers are using system five. and maybe a little bit about them.
0:39
And come up with a good list of your best customers, hopefully, so that you can take some actions.
0:46
To find more customers like that.
0:48
Or build your business with those customers.
0:51
Just a little recap on the topics we've covered so far this year, because he's, a lot of these are available to you in different ways.
0:59
At the beginning of the year, we talked about your top moving items and slow moving items and on January 18th and there's a recording of that available, if you're interested in the last workshop. It's also possible to access that either by buying the bundle of workshops we'll talk about today or by purchasing the recording on our website.
1:19
Today, we're going to talk about how to report on sales by customer and a few different reports that can help you with that.
1:27
We're gonna follow this up with a morning workshop next week from 8 to 12 Pacific on how to encourage those same customers to return to your business more often and get them referring people like them to your business and some tools and system five that can help you do that.
1:42
We'll follow up in March by talking about how to speed up your sales process and use barcoding in our system.
1:50
So, just a little piece on the workshop here, before we get into talking about your customers, this will be next week, on the 15th for a half day, and we're going to talk about once you know who your most valuable customers are, you probably know intuitively. But, let's look at specifically who they are.
2:07
Then, what are some strategies you can use in system five to help them come back, to encourage them to come back, to encourage them to refer you business And how can you make sure you have a plan to follow up with them and build that business?
2:19
So if you're interested in that workshop or any of our workshops, you can now pick those up right here on our website.
2:29
So you can go to sales dot one word software dot com and you can buy our other professional services catalog items here if you need help with specific things.
2:38
Or unfair training events. Right here you can purchase the different workshops, which we also bundle into groups of three.
2:46
And if you missed the last workshop and you'd like to come to it, can also buy a recording of that event.
2:54
Well, now we'll get into the meat and potatoes of this.
3:00
We're going to talk today about a concept called the Customer Lifetime Value, which is it in the software industry. People are always talking about this, but I think it really applies to any business. How much of has that customer spent with you over the whole time they've done business with you?
3:14
What does that means?
3:15
That helps you define what you're losing when you lose a customer and what you're gaining when you get a customer, and it can really help you strategize about ways to find new business or building the business you have.
3:29
So really what I'm talking about, how to calculate a customer's lifetime value, it's simply how much they've spent with you.
3:35
A few ways to estimate it for customers who might be new is, What's their average sale size, and how frequently do they purchase?
3:44
Then you just have to calculate how long you can keep them for.
3:48
So, that's kind of what we're going to talk about overall.
3:51
First, we're gonna go through and look at some key reports that make that easy to find. How do I find what people have spent with me, over a period of time, or over the whole time, they've been with me?
4:02
And then, if I want to zoom in on what that customer relationship is like, how do I filter that byproduct type? How do I understand their buying behavior, say by season?
4:15
Or even invoice by invoice?
4:20
So, first, we're going to talk about a couple, a couple of different reports that make this easy to find, and you might be familiar with these.
4:30
So first, I'll show you the Ranking Sales report.
4:36
So, underreport, under Sales Reports, there's a few ways to find this report. I think you can find it.
4:45
here under Inventory Sales Reports.
4:51
Pardon me.
4:54
There it is. Sorry, under Customer Invoice Sales Reports, you can find the ranking sales report. This report is good for a lot of things.
5:00
one caution, though, when I go to the next step, is it this report can take a little bit of time to calculate, if you have a large set of data.
5:08
So, you may want to consider either planning to run it after hours, or to run it for a shorter timeframe.
5:16
I'm going to run mine for a fairly long timeframe.
5:20
So, normally, it would look something like this. You'd have to hit this recalculate button which can take a little time if you have a lot of data.
5:29
So be wary of that.
5:32
So I'm looking at three years or so here.
5:35
And I can quickly, once I run that report, filter it by all sorts of things. And today, I'm going to quickly filter it by customer.
5:44
So who's the customer that spent the most with me?
5:48
And I can sort that by the column headers like you do in Excel, Smith, construction and pretty profitable, decent margin on that.
5:58
So maybe I want to focus on that's sort of customer and more relations with ships with builder's like that.
6:05
That do a lot of volume at a decent margin.
6:09
Or I could sort this by the profit margin because maybe my strategy is different. I've got enough high volume builders, where I've got a lower margin, let's say, and I'm always competing against the store across town.
6:21
For sales like or customers like Fred Hansen here, I'm making a really good profit margin. So maybe I just want to convince a lot of Fred Hanson's to come to my location.
6:33
The great thing about the ranking sales report is that you can also run all kinds of other reports here really quick. So I'll just touch on that.
6:44
If I go to a category and hit view, I can see which of my categories is doing the best. So for me, it's the refrigerators.
6:57
So, one way to find your customer lifetime value would be to set this over the timeframe of this report. Over your entire time of operating with system five.
7:06
Find out who's at the top, easy way to do it.
7:09
The ranking sales report.
7:12
However, it doesn't give you a lot of filtering options, or a way as to focus in on particular customers.
7:22
A good report for doing that, that's very customisable, is the Design Your Own customer supplier report.
7:31
So, under Reports, you look down here under Customer Supplier Reports, you can find a couple of canned reports, the mailing list and the phone list, but here you can build your own customer report or supplier report with lots of filters, such purchase filters.
7:50
And this is a really great tool to focus in on target customer groups, and then come up with a plan to do more business with them.
8:04
So, here you can see off the get go, I've got a few different toggles, I'm going to use all my locations. And I'm going to work on with customers.
8:13
I could do the similar thing with suppliers.
8:17
And you can also focus in on types of customers.
8:21
All of them are just cash customers or account customers.
8:25
I'm going to do all today.
8:28
And I'm going to go through the, the port's more broad features first.
8:34
So I'm gonna skip the Filters area to start just over two columns here.
8:41
And this is a lot like the design inventory report.
8:46
You choose the columns you want to see.
8:48
So, I'm going to put the contact info.
8:53
I'm not too worried about their address right now. I'm just gonna put their phone number.
8:58
And there e-mail, which is right here.
9:04
Then, down a little bit further, I can see the total dollars purchased.
9:10
So this will just tell you the total they've spent with you. Period.
9:15
After we see this, we'll look at using these filters right below it.
9:22
You can also do useful things here, like, oh, maybe what's their current balance.
9:27
If you're using points. And we're going to talk about points next week as a tool for keeping people coming back.
9:31
What, how many points if they accumulated, for example?
9:38
And I'm just going to hit view here.
9:44
So we let that run.
9:45
And then my strategy for today, in showing you, Where do I find your customer lifetime value for your largest customers? It's sort by the total dollars purchased, and they'd be right there.
9:58
So I can see that Smith construction is the customer that's driving the most revenue. But I can also see that they still have a lot of that outstanding, And maybe that was recent. So that might be a bit of an outlier.
10:10
Maybe that that business isn't indicative of my whole operation.
10:15
But this lets you quickly see who's at the top of your list.
10:20
Then you can zoom in on that customer and think, well, am I trying to get more Smith constructions in my portfolio clients?
10:28
Or am I trying to build on my business with Smiths construction, or am I more interested in some of these other clients and having more of those.
10:40
Now, to enhance or augment this report, you can use these filters here.
10:47
The first set of filters I'm going to spend a little less time on, but let's suppose I wanted to filter by customers in a certain state or province in a certain zip code, or if I'm using, say, commit five commission salespeople, maybe I want to report by salesperson, you can do that here, and that would open up some doors for looking at your customer base differently.
11:14
But today's demonstration, I'm going to talk about the Purchase Filter, so in the purchase filter, I can create filters and I can give them a name.
11:23
So I just called this purchase filter Number one and give it a name.
11:34
I can set certain conditions, So I'm going to take the same report I just looked at and only put customers or customers on it if they meet certain conditions.
11:42
So I can say Well, if they have greater than zero dollars purchased.
11:49
But I could be picking any number here or greater than or equal to a certain quantity of product.
12:00
And I can set a date range. I've got my date range set to all-time.
12:07
Then I can pick a product category. So maybe I want to know which customers have spent money?
12:13
Baby goods because I'm thinking of putting more of that in my showroom, let's say, I can even focus in on a specific product if that's what I want to do if I'm trying to find out who buys the most of certain things.
12:32
I'm not going to do that in this example.
12:39
So, to use this purchase filter, I first configure it here on this screen.
12:44
And then in my columns.
12:52
I go to hear and take my purchase filter.
13:00
You'll see as soon as I do that.
13:07
That the purchase filter is identified here.
13:12
And now I can run the report, and I'm gonna get a much smaller report, because it's filtering.
13:17
OK, so I've just got Harry Carey here, who's got four points, they've purchased the most baby goods.
13:24
So perhaps it's not a good idea for me to set aside a whole piece of my showroom guess for that.
13:31
But if I need to zoom in on my customers, byproduct type, I can, I can change that out quickly.
13:40
So let's see.
13:41
I know that refrigerators in my appliance section, it's one of my biggest areas of business.
13:52
So who are the, what does the purchase history look like for them?
13:56
Who are the big players there?
14:00
So this should help you identify just who your most valuable customers are, which is probably something you know intuitively and sort of focus in on which segments of your customer base you want to grow.
14:14
Once you know that, and you maybe take an example of one of these customers, I'm going to use Smith construction a lot today.
14:20
You might want to know more about what they're buying and when they're buying it.
14:25
But without going invoice by invoice, So we're gonna look at some other reports that can help you figure that out.
14:37
Now, one other key thing you can do on the report I'm showing you now is you can use it to either filter by lookup words or Add Lookup words.
14:47
So, actually, before I move on, just going to point this tab out on the report.
14:54
This would allow me to filter the report, so, for example, only the people with a lookup word attached of builder would be on the report.
15:04
Or if I want to add a lookup word, say I want to be, you know, at a lookup word of top customer to everyone on the report.
15:14
Yes.
15:15
I could add that Lookup word to each person that's on the report after I put the filters on.
15:21
would be this would be a quick way of flagging all those customers that I want to take actions with down the road.
15:33
Now we'll look at a little bit of how to dive into when your customer's purchasing. So you might want to know, well, do I have customers who are seasonal, or do they spend more at certain times of year?
15:46
And the customer yearly sales report is helpful with that.
15:55
So, I'm gonna go to Customer and Supplier, or sorry, to Sales Reports, and then to Customer and Invoice Sales Reports here.
16:08
And I'm going to go Customer, yearly sales.
16:14
You can, I think this report works best if you pick a customer, like, I'm going to do here, but you'll notice I can also filter customers by a lookup word.
16:25
And now I can see when it is in the year that this customer is purchasing.
16:30
So that might just give you an idea of when you could take an action.
16:34
two, get them to pre-order so it's not a scramble for you to have everything they need. Maybe you need to phone them in late April or early May to make sure that you can fulfill their joon orders, for example.
16:48
You can look into things like that. For example, in Power Sports, I know that a lot of our power sports customers will often go to their vendors and get a deal, and they call it a spring booking.
16:57
Well, maybe you can do the same thing.
17:00
Either blow out stock, that's been sitting all winter, or bring in new inventory, With the purpose of selling it too specific, Customers are your top customers.
17:15
I'd also say you probably want a report that can show you the details of that customer's business invoice by invoice.
17:25
Now this is a little bit greedy, it's only be useful for certain things, and it's similar to the invoice reporting, except that it allows you to filter it by customer first.
17:42
So, this one here, I can pick a range of customers, which I'll do here, I'll run it on everybody, and I can pick a, a timeframe, I'm going to go back.
17:57
A few months.
17:59
And there is quite a few little tools here, to edit what you want to include. So, maybe you want to include estimates. Maybe you don't.
18:07
For example, and you can put a specific customer in here, or you can do a range, so I'll do arrange to start.
18:16
Now, I can see the customers it's going to report on, and the number of invoices each one has.
18:22
Then, I can run the report, and I can flip through the different customers and see what they've purchased.
18:33
So, this kinda brings it all together. You could go to the customer record and open each one.
18:39
And an invoice report would do this across customers, for a given date.
18:44
If you just look through this and, you think, oh, Smith, construction, they're a little bit all over the place.
18:49
They're buying flooring, they're buying dress pants and freezers.
18:55
but you can find some method to the madness of when your customers buy and what they're buying.
19:02
If that's too greedy if that's too line by line and too many invoices to look through, we can also just look at what they're buying by product, category or product group.
19:19
So, the category sales by customer is also a useful report.
19:24
And this breaks it down, just like you can see on screen here, which product categories, or is this customer spending money on?
19:32
And maybe that helps me identify where I'd like to grow my relationship with the customer, Or maybe it helps me identify areas where we could just sell more of that product to them. That product is clearly what's bringing them in the door.
19:49
Just a little more information about their purchase, behavior, what we're looking for here.
20:07
So we'll go back to Customer, that's a sales report, sorry.
20:11
Sales Reports, and then we're gonna go to.
20:16
Category, Sales by Customer.
20:20
Now, I suspect this one might get a little bit squarely on me here, but it's a good report.
20:27
So I'm going to run this here. And you can see I've got a little bit of a problem I've run into. I just wanted to show you that we all run into problems.
20:36
So the headers are getting a little juggled up, but this report helps you identify which areas the customer is spending money.
20:45
And if I do this, I can do it for all customers.
20:50
And it's not the only report that does that for all customers, but I think really the power of this one here would be to do it for a specific customer, or for all customers linked to a specific salesperson, for example, maybe you've got a salesperson who's always selling the same things and not cross selling important things.
21:07
This could be a way to identify that sort of behavior.
21:13
And it can help you get a little more data about the customer, and what they're buying when they're buying, and that sort of thing.
21:22
I think of all these reports, the one that has the most value to you in figuring out more about your, who your best customers are, how long they stay with you.
21:35
How much money that's worth to your business is probably the customer supplier reports, because you can customize it so much, you can filter that in different ways, Pflag Yore customers into with lookup words so that you can take other actions.
21:56
And the whole idea of a customer's lifetime value is to think past the one transaction you've had with them, even if you have a long purchasing cycle.
22:05
So, my story about this is, is simple.
22:08
Uh, I bought a new hot water tank in the fall.
22:12
Sorry, Peter, the hot water tank.
22:15
And the one thing that the company did that, that close the deal, they did 25 years ago when somebody built this house. I didn't even own it.
22:25
They put a tag with the sales person's name and phone number on the here.
22:30
And when we, because of that plan, that they had to follow up, which they'd probably forgotten all about, the same salesperson came back to our house from 25 years earlier.
22:42
And because he walked into our house, he's like, Oh, I remember this place.
22:45
That gave us a ton of comfort, and they won the business without even any effort at all.
22:50
So, it might not even be the same customer, but you want to start thinking about What strategies am I putting in place to bring that customer back to sell another product like that?
23:01
And if you can dig through your data in system five, you can find the right people to focus on.
23:09
What we're going to focus on in the workshop coming up.
23:12
What are you going to do once you find them?
23:14
And you know a bit about them.
23:17
So here's some self help resources that relate to What I'm talking about really is all reporting.
23:25
What we're gonna get into next time has more to do with, What you could do once you've kind of found the people you want to do more business with, or actually, or less fit business with.
23:37
How do I target these customers, and what are some tools in system five, that I can put in place to help me grow my business this year?
23:46
Uh, so I did.
23:49
I didn't actually want to ask, though, if people look at this the same way as I'm looking at it, so, just let me quickly send you a poll.
24:02
So, first of all, Is this something you think about?
24:06
How much you make from a customer, during the time they do business with you?
24:26
I didn't quite get all of you, but I've got a few questions, So.
24:32
Surprisingly, not everyone thinks that way. And it's kind of a software approach, too.
24:38
Tracking your customers, So I'm not surprised.
24:39
That's where the idea came from, but I think it applies to all of us.
24:45
So, whether you do, when you do not, do you have a plan to increase that number that people typically spend with you this year?
25:04
Scott, I think a lot of people think about this in a way of average basket, instead of just average, or total lifetime value, but each of those incremental changes in the average basket contributes to this.
25:17
Yeah. If the average sale. As opposed to yeah. The frequency, right?
25:22
Yes.
25:23
I'm interested to share what.
25:30
So it's an interesting cross-section.
25:32
Yes And no, it's still early in the year.
25:33
It's not too late to make a good plan, whether that's for, like Kyle says, your average basket, or the overall experience for the customer.
25:45
And I think those are the other two questions I have, or maybe less applicable.
25:51
So from here, I think I'd love to encourage you to come to the workshop next week, because we're going to talk about tactics and strategies you can use to focus on these customers once you've identified them.
26:05
So, I'm hopeful we'll see you there. Did you want to take it from there?
26:09
Sure, drop that. Next slide.
26:15
He already showed you this once, but we're gonna, we're gonna go in for the, for the cell here. We got the morning workshop coming up next Thursday, so half, day, 8 to 12. And the event is part of a three part series about becoming more profitable.
26:33
So the top topics in this one are pricing, I got the wrong wrong information and upselling of kids using kits, modifiers, and comments. Using gift cards to your advantage.
26:44
So, also, we have an entire points loyalty program within the system, and he's going to go over that as well. And then adding up our follow ups or service using the CRM.
26:58
Like I said, again, this is part of a package. Can you throw up the next slide there?
27:03
It's good.
27:06
It's part of our Get Profitable Bundle. So, if you do get all of them together, they are priced together. Now, obviously, we've already held one of those, so you would get the recording of how to optimize your pricing, and keep your costing up to date.
27:20
That was from January 22nd. And then the next weeks is how to encourage return visits and referrals. And then the last one is kind of like a miniaturized version of barcoding in your business, which we?
27:34
So, as part of our are part of our Professional Services packages, you can get a group version of that 321.
27:46
And, if you go to sales that windward software dot com or software dot com slash events, you can get that trace there because we did reduce the price since you're just beginning recording in the first one.
28:01
All right, I didn't notice if there were any questions. You must have done such a great job that there weren't very many.
28:07
I think we've got one.
28:09
Perfect. So let's, this is a good question from Christine, so I'll let me just share that.
28:14
So Christine's asking, how do you add lookup where it's to the lookup word list, and how do you add lookup words to your customers, or suppliers?
28:21
So, Christine, I'm going to show the basic way to do that.
28:29
And there's more on the Senior Learning Academy.
28:31
So if I go into a customer or a supplier, I'll go into my customer records, though, and I'll just pick somebody. So let's pick.
28:43
I don't know, Barry Smith.
28:54
And I go to the lookup where it's tab, this is where I'm going to be able to add new lookup words and assign them to this client.
29:01
So, if I want to add one, uh.
29:08
Thrown a blank here, so I'm just going to do this.
29:11
It's a Happy Customer, type, what I want to call the Lookup word here, and I hit Add.
29:17
Now, that created the Lookup word for later use and it attached it to Mary Smith.
29:23
I can detach it like that. Maybe Mary Smith is a builder, I can attach that one.
29:28
Mary Smith can also have both.
29:34
Or I can move them all off.
29:39
And my only caution with this is there is such a thing as too many lookup words.
29:46
We've been using system five at when we're at software systems for a very long time, and we have a great deal of lookup for it. And then it can become a launch. We get to watch so.
29:57
So just make them make sense and make them be re-usable, would be my advice.
30:02
It looks like this is a follow up question.
30:07
Can you show a sales report for each customer buy a product, and the price for each product?
30:17
So you'll want to see all the people that bought a certain thing, David, is that correct?
30:24
Yeah, I think, actually.
30:29
You could do that in more than one way, David, so I could use this same report.
30:39
Then I think, design your customer supplier report, but in my filter, I would use this bottom thing, purchased inventory.
30:52
So I think I might need to take the column off.
30:56
Let's say I go name, and we'll do filter one.
31:04
Under Purchase Filters, well said, it greater than or equal to zero.
31:14
And do you need these two in place before these light up? And then instead of doing a category, which is what I did, you can go right into an item.
31:27
And pick something specific.
31:31
That's how you get zero on that. But, Yeah, that's, yeah. I don't have enough data here to really do a great example of that.
31:39
So that's, that's one way it's build it into this report with the filter, and I think maybe a better way for me to show you.
31:52
Something that I'll get some report results on might be.
31:58
Go to the Sales Reports area, and.
32:05
Is this one category sales, or is it this one of these has an item?
32:11
That one.
32:23
Bear with me a moment.
32:32
What this did, Yeah.
32:39
Of course, the other way here would be this. Pull up your item.
32:50
Let's do refrigerator.
32:55
Ketsana, which one of these I, sold a lot of, but I'm gonna guess that one: Go to the Sales history report.
33:10
It really is really useful if you're just trying to figure out how much you sold on one specific item.
33:18
Yeah, That's probably the way to go.
33:19
See you come in here to sales history, you pick your toggles.
33:25
Watch for that one, the work orders.
33:28
Because sometimes a lot of your stuff is still sitting on the work order.
33:32
Or quote, pick your date range.
33:36
And it's going to tell you exactly which invoices on it's on.
33:40
And the pricing, which I think, is what you're looking for, David, is that?
33:51
Answer your questions.
33:54
Awesome, awesome, perfect. Scott, while we were just kind of going through that, thought it was interesting that you could create the lookup words and attach them using the design, customer supplier, reported, never knew you could do that.
34:08
And then it looks like some of the other reports used those lookup words as part of their function.
34:15
So, it's interesting how you can really get granular on, how do you report on these things?
34:20
The reports, yes, it's how you can target and segment your customers, or your products, or your vendors, or your invoices specifically, look, upwards is really powerful.
34:32
I could probably do a whole hour on it, but it's also kinda simple. So it reports like the one that you just mentioned, Kyle.
34:41
I think they're quite powerful because that area this is what karla's talking about. I can.
34:53
No, add the builder, look forward to everything on the report.
34:59
Or filter it or exclude people from it.
35:03
Or remove or add lookup where it's using these toggles down here.
35:06
Then, those become search terms that you can use elsewhere.
35:12
Very handy.
35:19
And, yeah, the only we don't have any other questions today, but.
35:26
Does anyone else have anything lingering they wanted to ask before we let you go?
35:39
OK, well, I think that'll cover that.
35:42
All right, Thanks everyone for coming.
35:46
See you next week. Hopefully.
35:49
Yeah, Take care.
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