Understand reorder opportunity calculations
Learn how Phocas calculates reorder opportunities, including usual ordering frequency, overdue products and potential upside.
Reorder opportunities identify products that a customer buys on a regular basis but hasn't reordered when they usually would. Reorder (Group) opportunities group overdue products from the same product group, so you can review related opportunities together.
Only overdue products appear as reorder opportunities. Products that are reordered within their usual ordering frequency don't appear.
Phocas analyzes the customer's recent purchasing history to determine their usual ordering frequency and whether a product is overdue. The calculation accounts for variations in ordering behavior, so the values you see might differ from a simple average based on the number of orders in the last year.
Data used
Reorder opportunities are based on sales transactions from the last 365 days, up to the date the analysis was last run. The analysis typically runs overnight, so an order placed today mightn't be reflected until the next run.
When analyzing the data:
Each order or invoice number counts as one order. If the same product appears on multiple lines of the same order, it still counts as one order.
Freight, delivery and pickup lines, rows with missing key information, and placeholder product or customer codes are excluded.
By default, no orders are excluded based on quantity.
Usual ordering frequency
The Usually orders every value represents the customer's typical time between orders of a product.
It isn't calculated by dividing 365 days by the number of orders. Instead, Phocas:
Calculates the number of days between each consecutive order.
Identifies unusually long gaps using the interquartile range (IQR) statistical method.
Excludes those unusually long gaps.
Averages the remaining gaps to determine the customer's usual ordering frequency.
This prevents an unusual event, such as a shutdown or one-off supply delay, from distorting an otherwise regular ordering pattern. Only unusually long gaps are excluded. Short gaps remain part of the calculation.
Example
Suppose a customer has these gaps between orders:
7, 7, 7, 7, 7, 8, 8, 90 days
The 90-day gap is unusually long compared with the customer's normal ordering pattern, so it's excluded. The remaining gaps average about 7 days. Phocas therefore displays Usually orders every 7 days.
If you simply averaged all the gaps, including the 90-day gap, you would get about 18 days. This is why the frequency shown in a reorder opportunity mightn't match a calculation based on the total number of orders or the full 365-day period.
Overdue products
Phocas uses the usual ordering frequency to estimate when the customer would normally place their next order:
Expected next order = last order date + usual ordering frequency
When that expected date has passed, the product is overdue. The opportunity shows how many days have passed since the expected order date. For example, if the customer usually orders every 28 days and their last order was 52 days ago, the product is overdue by 24 days.
Potential upside
The yearly value shown for a reorder opportunity is an annualized value, rather than the amount the customer actually spent on the product during the last 365 days.
Phocas calculates the customer's average spend per day on the product and extends that rate across 365 days. As a result, the potential upside might differ from the value shown alongside orders in the last year.
For example, if a customer spent $52,500 over approximately 308 days, their average spend is about $170 per day. Extended across a full year, this gives an annualized value of approximately $62,200.
The potential upside is an estimate based on the customer's recent buying rate. It isn't a forecast or guarantee of future orders.
Why values might not match
If your calculation differs from the values in a reorder opportunity, check whether:
you're calculating the gaps between individual orders rather than dividing 365 by the number of orders
there are unusually long gaps that Phocas might exclude
a reorder quantity filter is excluding small orders
you're counting transaction lines rather than separate orders or invoices
a recent order hasn't been included in the latest analysis yet
These differences don't necessarily indicate a problem with your data or database sync. They can result from the way Phocas determines the customer's typical ordering pattern.
FAQs
Here are answers to some frequently asked questions about the Sales Insights: Customer segmentation feature.
Why is a product I just ordered still showing as overdue? Reorder opportunities are updated on a schedule, typically overnight. A recent order might continue to appear as overdue until the next analysis run includes the order.
Why isn't a product shown as a reorder opportunity? A product mightn't appear if there are fewer than three orders in the last 12 months, the ordering pattern isn't consistent enough to determine a reliable ordering frequency, the product isn't overdue, its annualized value is zero, or an order was excluded by the reorder quantity filter.
What happens if there is an unusually long gap between orders? An unusually long gap, such as one caused by a shutdown or one-off delay, can be excluded when calculating the usual ordering frequency. This prevents the unusual gap from distorting the customer's normal ordering pattern.
What about seasonal or irregular ordering? Seasonal or sporadic purchasing mightn't produce a consistent enough ordering pattern to determine a reliable ordering frequency. In this case, the product doesn't appear as a reorder opportunity.
Is potential upside a forecast? No. It's an annualized value based on the customer's recent buying rate. It indicates the potential value of the opportunity but doesn't predict or guarantee future orders.
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