One important responsibility for an eCommerce manager is handling sudden spikes in product demand. Sometimes, this might be a big order pushing the daily sales volume for the item way above its average daily sales volume. Other times, Oprah or Howard Stern has endorsed your product, and sales on the item skyrocket for the day or week.
Whatever the intensity of the spike may be, product spikes are an important moment for a business: they are either the result of an influx of new customers who have never placed an order with your business before, or an existing customer who has discovered a new need and has thus placed a large order. Either way, it is imperative to capitalize on the spike to meet or exceed customer expectations, in order to turn a new customer into a much more lucrative repeat customer, or to turn a previous customer into a more frequent customer.
If managed properly, and if your business is able to prove its worth and exceed customer expectations on an initial transaction, such product spikes can be a gold mine – or in the words of George Costanza: “It’s like discovering plutonium, by accident”.
NetSuite includes a range of tools for you to use to identify a sudden spike in product demand, communicate that to relevant stakeholders – such as operations, marketing, and most importantly, customer service, and fulfill orders in a way that meet and exceed customer expectations.
Identifying Product Spikes
While each business will define a “spike” differently, the key idea is usually the same: sales of the item over the most recent period (day, week, month) are significantly greater than the average for that item over the same time period. For example, a business might define a “daily spike” as product sales for the day that are 1.25 times greater than the daily average for that same period. If an item usually sells 100 units per day, and today sales of the item are 125 units, the system identifies the item as a spike, and promptly brings the item to management attention.
The drawbacks of not identifying product spikes are substantial. The operations team might not be able to fulfill all of the orders, or the orders for the spiking item might flood the entire operation, and cause a slowdown in fulfillment for all of the business’ orders.
For the marketing team, a product spike is a short-term opportunity to maximize brand awareness. For example, Oprah might proclaim that she is only going to use natural skincare products. For the next day or two, all cosmetic companies might see a similar reaction: spikes in search traffic and orders for natural skincare products. Marketing might wish to respond by funneling ad spend towards search terms such as “natural cosmetics”, in order to capitalize on a substantial celebrity endorsement. Without identifying product spikes as such, marketing might be unaware of the sudden shift in customer behavior, and might lose market share to more nimble competitors.
Finally, and I believe most importantly, is customer service. Customer Service needs to be on the front line in any product spike, in order to communicate with new customers and prove the merits of your brand and your ability to exceed expectations. If a new customer places an order, a thank you call from a customer rep is an excellent way to turn that customer into a repeat customer. Or in the event that a new customer places an order for a spiking product, and that product is now unavailable for a few days or weeks because of the spike, customer service needs to be informed and get on the phone with the customer immediately, not only to inform them of the delay, but to proactively offer them a promotion for future orders or to entice them to make another purchase with a free sample of your business’ other products.
Identifying a product spike in NetSuite is a straightforward endeavor: a handful of saved searches and custom fields will give you a solid “spike report”, from which you can begin to manage product spikes.
First, on the item record, create a custom field called “Average Daily Sales”. If your spike interval is weekly or monthly, name it accordingly. Next, create a saved search, which group’s sales movement per item, and set the value of the “Average Daily Sales” field to the result of this search. This field will now display the average daily sales for this item.
Next, create a “Daily Spike” Saved Search. This search will compare today’s sales movement against the average daily sales field, and only include items that exceed a threshold. You can define this threshold as a percentage, a nominal movement value (For example, include only items where 20 units or more are sold today), or even a standard deviation from the “average daily sales”. For example, your saved search might find you all items where the units sold today are one standard deviation above the average for that item, and the movement for the day is more than 50 units.
Communicating With The Team
Now that you have a saved search that displays all products that are spiking for the day, you can set parameters for the system to email this report to specified recipients. For example, you might want NetSuite to send an email with weekly spikes to your marketing, operations, and customer service teams every Monday morning. Alternatively, you might want to set a saved search based upon a trigger event: for example, any time an item sells a second standard deviation above its average, shoot off an email to all relevant team members.
Furthermore, NetSuite allows you to add conditional formatting to your search results. Thus, you can highlight items where the fulfillment volume for the day is greater than the on hand or available inventory of the item. This will allow operations to identify items that are out of stock because of a product spike, and they can react accordingly, by either purchasing or assembling more inventory.
Finally, workflow tools are an effective way to communicate with customer service representatives. If an item is spiking, and the item has a backordered quantity- thus indicating it is not currently in stock- a workflow can generate phone call records for customer service reps to reach out to the customer to inform them of the backorder. Managers can then review these particular records to gain insightful feedback directly from this particular customer set.
Exceeding Customer Expectations
In the incredibly fast-paced world of eCommerce, customers demand everything: faster delivery, lower prices, and greater service. The most nimble businesses are able to deliver customer value while also balancing internal profitability and employee engagement. NetSuite’s unified ERP, CRM, and eCommerce platform is both robust and malleable: robust, in that the application acts as a rhizome across all functional areas of the business, and malleable, in that your business can modify processes and reports on demand to meet rapidly changing demand for your products in the marketplace.
The next time your business finds itself unable to fulfill a spiking product because of antiquated technology, think about the number of potentially lucrative customers you might be losing as a result. With NetSuite’s management technology, your business can learn to capitalize on the momentum of a product spike, and accelerate growth through supercharged bursts.
If you have any interest in learning more about managing your business with NetSuite, please contact us to arrange a consultation. We look forward to hearing from you.