Calculation Details:
To calculate the adjustment factor for each customer, we:
Take all products purchased by this customer last year and calculate the median price per unit for each product across all sales (not how much the customer paid, but how much the product was sold on average to all customers)
Find the same products in current year and calculate their median price per unit for each product across all sales
Adjustment Factor = Current_Year_Price_per_Unit / Last_Year_Price_per_Unit
For each customer, for each product - multiply Last Year Spend by Adjustment Factor to get an accurate estimate of wallet share sales potential
Within the "Clients" tab on the "Sales Potential" page, the total potential ($8.5M circled in red in the image below) will include this adjustment factor to calculate the Client's overall sales potential:After clicking into the "See Details" of a Client, the total potential for each input category will include this adjustment factor to calculate the sales potential of each input category:
Example:
A customer bought both Priaxor and Atrazine last year.
Last Year:
Your median sales price for Priaxor across all sales was $450/gal
Your median sales price for Atrazine across all sales was $20/gal
Current Year:
Your median sales price for Priaxor across all sales is $495/gal
Your median sales price for Atrazine across all sales is $30/gal
This means that Priaxor went up 10% and Atrazine went up 50%. If a customer bought $10,000 of Priaxor and $10,000 of Atrazine last year - without adjustment, we would say the expected spend this year is $20,000. But after we adjust for price increases, the customer sales potential should be $26,000. This means that if a customer has already purchased $20,000 of products, there is still a $6,000 sales potential remaining.
If you have any questions related to this article or anything else, please reach out to our Partner Enablement Team at help@agvend.com or at 512-812-9399.