I get to work in alot of vertical markets because of what I do. Today I was with two guys who work in and around the motor trade. We were looking at creating some software that can incentivise your existing base to increase their spend by setting ‘uplifted’ sales targets. It was something I had never seen before. So here’s how it works. You create a campaign and lets say that campaign runs for three months starting tomorrow (02/07/2008). You then select what customers you want to add to that campaign. Then using historical financial data you get the sales figures for each customer for the same period in the previous year (or go back 2,3,4 years). You then apply a percentage uplift to each customers historic sales and this then becomes their target for the current campaign. Now where it gets really interesting is you also take your current gross profit figure and then apply that to the uplifted sales figure. What this will do is tell you how much in actual revenue you will receive from each customer if they hit target.
Lets look at an example. Customer X has sales for the same period of the previous year of £100K. We use an uplift of 20% which means that customer has to hit £120K of sales during the current campaign. If our average gross profit is 30% then we make £6K if they hit target. So of course we can incentivise the customers to hit this target with some really compelling (and quite expensive) prizes in the knowledge of how much money there is to play with. And of course if they dont hit the target they dont get the prize!
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