The 2020 Mid-Year Economic Update_long

Day: March 10, 2012

MDM Interview: Why Analytics is About People, Not IT

MDM recently spoke with Tony Pericle, author of Transforming Data into Action: Using Analytics for Better Distributor Sales Decisions, published by the National Association of Wholesaler-Distributors. Pericle has worked in the distribution industry since the early 1990s.

In Part 1 of this interview, Pericle talks about why distributors are interested in doing more with analytics and how tapping someone to oversee the effort can pay big dividends. He also provides his perspective on the role the IT department should play in enabling the better use of data.

MDM: Distributors are increasingly interested in using the data they have in their systems better. What do you think is driving the growing demand for business analytics?

Tony Pericle: Today’s $2,000 desktop is 200 times more powerful than the $20 million mainframe of 20 years ago. That’s significant because what can be done with one person in three minutes...

Stop Guessing: The Value of Customer Segmentation

Distribution executives’ beliefs about the best segments to go after in their markets may not be accurate. Blending internal transaction data with data that provides a more complete, demographic view of your customers is the best way to better understand your markets. This article examines how customer segmentation can highlight markets where you may be missing growth opportunities. And it provides examples of where previous assumptions about growth segments were called into question by actual data.

When we ask successful distribution company executives about the sweet spots in their markets, they readily provide a confident answer. The problem with the answer is that it is usually incorrect or at best partially correct. A detailed, analytical look at their customer base shows that some market segments are overrated, some underrated, and others are ignored or undetected altogether.

While these executives sincerely believe their answers, there are several reasons why they don’t match data about the customer base. The first is ...