Product portfolio management is the science of making decisions about which products to keep in your lineup and which to discontinue. But how do you know which products are performing well and which ones aren’t meeting your goals? The answer lies in data. Knowing the key data points to track can help you make informed decisions about your product portfolio. In this blog post, we’ll discuss the important data you need to track for effective product portfolio management.
Product Velocity
Measuring the velocity of product sales is critical for accurately assessing how well a particular product is performing. Velocity is defined as the rate at which customers purchase a product or service over a period of time. It allows you to understand the demand for each product and to anticipate customer needs. Additionally, it helps identify potential areas of improvement with low-performing products and encourages you to take advantage of high-performing ones.
Inventory
Managing inventory is a crucial part of managing a product portfolio. If a company does not have enough stock available to meet the demands of their customers, they risk losing out on potential sales. Too much inventory can also lead to cash flow issues and may result in the need to mark down prices or liquidate products at a loss. Companies should track their inventory levels and make adjustments accordingly to ensure that they have enough stock without overstocking.
SKU Totals
SKUs, or stock keeping units, are used to identify a product in your inventory. Knowing the total number of SKUs you have can help you manage your products more effectively by providing an overview of what is on offer and how well it is performing. It also helps inform decisions about new product launches and discontinuations.
GMROI
Gross Margin Return on Investment (GMROI) is a metric used to measure the profitability of a product. It helps you determine how profitable each product is and allows for comparison between similar products. This data can help you decide which products should be kept in your portfolio and which should be discontinued, as well as inform future investments into new products.
Customer Metrics
Understanding the needs of your customers is a key part of managing a product portfolio. Looking at customer metrics like customer satisfaction, conversion rate, and average order value can help you gain an understanding of what products your customers are most interested in and how they perceive your offerings as a whole. This data can inform decisions about which products should be kept and which should be discontinued or replaced with something new.
By leveraging data analytics, businesses of all sizes can make more informed decisions when it comes to managing their product portfolios. Having access to the right metrics and data will help ensure that resources are allocated in the most efficient way possible, ultimately leading to better sales and profits. If you are having trouble accessing your SAP data to create any of these essential KPIs, have a chat with our team – we’re passionate about unlocking SAP data for maximum business growth!
