The volatility of the past two years has thrown even the best sales and market planning teams into higher blood pressure mode. For that reason, the value of data analytics has elevated quickly to cut through the fog of mixed signals and pre-COVID-based assumptions. The good news is that you can strengthen your sales analytics with solid methods today that benchmark changes effectively. That will put your team in position to make better decisions on where to focus sales resources.
Leveraging analytics can improve distributors’ market planning ability by moving actionable data to the front lines. MDM Analytics’ Bob Jordan and Donnie Williamson recently outlined some keys to extracting more value out of data during an MDM webcast (view on-demand). The major takeaways from their presentation include how to use the analytical building blocks of data quality, segmentation, sweet spot analysis, market share and wallet share to set better quotas and growth goals.
Here are four actionable steps from the webcast that distributors can take in 2022 to ensure that smart data collection and analytic processes are deployed:
Find a ‘Data Champion’
One of the best opportunities to focus sales teams is to use data to target the highest potential accounts and segments. This includes hiring or empowering someone to champion data efforts and interests. Hiring people who understand data — but also know the distribution business well — can produce qualitative and quantitative data that will prove vital.
Job one for any data champion is to clean data (see below) to gain an accurate picture of who and where the most attractive and profitable customers or prospects are. This can only be done with customer stratification, a well-established methodology. It’s a structured segmentation process that groups similar types of accounts – by industry classification, size, profitability, buying behaviors and other attributes that help support strategy and resource decisions.
The baseline of customer stratification is a well-segmented list of customers and their industry segment. There are a number of resources – Dun & Bradstreet (Hoovers), ZoomInfo, Data Axle and others – that can help your data champion tag your customer list with appropriate industry segment classification. Side note: Most people refer to either NAICS or SIC codes. The North American Industry Classification System (NAICS) is the universal standard; it superseded the Standard Industrial Classification (SIC) codes that identify the primary line of business of companies more than 20 years ago.
Once this foundational segmentation is in place, there are additional and increasingly valuable layers of segmentation that can be developed through analysis of transaction and operational history – cost-to-serve, profitability, account potential and much more. Your team can not only target more attractive customer segments for additional wallet share growth; they can identify high-potential prospects to expand market share. An analyst can monitor segments for risk of defection or shifts in buying behavior that can alert sales teams to proactively engage with accounts.
Prioritize Data Quality
Whether it’s creating internal data collection processes or reaching out to a third party, quality is paramount when it comes to analytics. Clean and trusted data is the foundation to any analysis, and the phrase “garbage-in, garbage out” is more than a maxim. Whether a company’s data is currently unmanaged — or there is a designated “data team” — it’s imperative that a firm manages its data well. Entrusting a third party to clean and enhance data is a great option for those just starting their analytics journey, as crafting a well-defined data strategy is the target.
Define Data that Moves the Needle
Reliable data is a great starting point, but the real power is the ability to generate actionable insights that drive well-informed decisions leading to increased market share. Actionable data allows distributors to determine whether they are selling to the correct customers. Leveraging external market intelligence allows companies to prepare for critical factors such as expected market change and inflationary increases.
Many leading businesses with seasoned data strategies have adopted the coupling of both internal and external market data to generate game-changing growth strategies. They have a clear picture of who their customers are and the markets they serve. They know the products that provide the most value through their supply chain and can shift and act quickly to unforeseen changes. Having a clear picture of how a business is doing in comparison to the rest of the market will provide the information needed to better accomplish goals.
Build a Data-Driven Sales Process
Here’s a shocker: Salespeople don’t always know what the total opportunity is at either a specific account or a territory. It’s a process to move from data-free to data-driven discussions on where a salesperson should spend time. It’s possible to build a model using historic transaction data to bring data to the table. And for most market verticals, there are sources of external market data to strengthen the way your team can model market and account opportunity.
Whether a distributor home grows the process or contracts out, it will open a path toward enhanced focus during turbulent market times. It’s a proven formula. Companies that improve their use of data analytics give their sales teams a competitive advantage to increase revenues by targeting and growing the highest-potential accounts.