Is your sales history self-encrypting?

Emcien’s mission is to find the actionable intelligence that is hidden in the sales history of configurable products. We call this SKU intelligence. Many companies, however, save their sales history in a way that keeps any patterns hidden forever. I call this self-encryption. Many of these worst practices began as a way of saving space at a time when storage space was expensive.

A configurable product is one where the customer has to make choices to customize the product to his own particular needs or preferences. The valuable patterns are in the way these choices are made. The sales history should be at the right level of abstraction: in terms of the choices that the customer made. Here are four ways you may be encrypting your data.

1. SKU Numbers. SKU numbers identify unique product configurations. They are a great shorthand for keeping track of what has been built and what is sitting in inventory. But if the sales history is kept in terms of SKU numbers, and the definitions of those SKU numbers are stored in a different place, then you may not be able to decipher your own history. By “different place” I mean a different database, different computer system, or anywhere that is not part of the history itself.
2. Part Numbers. Customer orders get translated into Bills-of-Material (BOM) so that the requested item can be built and delivered. But what happens to the order afterwards? Often it is saved in terms of the part numbers. The customer ordered “2GB of RAM”, which became part 123-XYZ-645A. This was the right part number for 2GB of RAM from a certain supplier during a certain period of time. Remembering 123-XYZ-645A may be important for some warranty issues, but it is the wrong level of abstraction for understanding the customer. Many customers ordered “2GB of RAM”, but they got many different part numbers (different suppliers at different times). Part numbers change constantly, and unless a complete trail of part number changes and equivalences is maintained, a history in terms of part numbers is irretrievably fragmented.
3. Standard Options. Most manufacturers make different models of their products, and the different models come with different “standard options”. The sales history doesn’t mention these options because there would be so much repetition (let’s save space!). The problem is that the set of standard options changes over time, even though the model names stay the same. Which options were standard on Model ABC in September 2007? Who remembers?
4. Product Packages and Option Bundles. This is similar to the standard option problem. Some set of options is bundled together and sold as the “Sports Package” for some period of time. So the sales history says “Sports Package”. What was in the Sports Package in September 2007? Who remembers?

The sales history should be self-contained, with a record of each unit sold, expressed in terms of the options bought by the customer. If some options were implied by others, but could have been different, then they should be spelled out. If the data is saved in the right way, then the patterns in how customers buy the product can be revealed.

The difference can be dramatic. The message below appears to be gibberish.

S	C	O			T	D	F
S	T	I	A	I	I	R	N
	N	I	L		A		D
A	S	E	E	N	H	E	I
E	H		N		E	S	E
A	C		S	R	U	H	T
R	R	M	I		D		Y
L	E	Y	U	O	N	E	Y

But suppose we use the key that Dan Brown uses in “The Lost Symbol”: the magic square discovered by Benjamin Franklin.

14	3	62	51	46	35	30	19
52	61	4	13	20	29	36	45
11	6	59	54	43	38	27	22
53	60	5	12	21	28	37	44
55	58	7	10	23	26	39	42
9	8	57	56	41	40	25	24
50	63	2	15	18	31	34	47
16	1	64	49	48	33	32	17

Then we see the hidden message: “Emcien can easily find the hidden treasure in your sales history”.

The value is that customers are speaking to you when they buy your products. This is the true Voice of the Customer (VOC). But due to the data encryption issue, companies are blind to this intelligence. Unleash this intelligence, and you can drive higher sales and margin by serving the customer with the right choices.