By taking control of your data, business people are better equipped to drive growth by developing effective strategies, negotiating better prices with suppliers, increasing sales, and managing risks. In this blog, we will outline a few key ways to leverage data to position your company for success.
Data analytics enables businesses such as wholesale distributors to determine the profitability of their customers. With analytics, executives are able to measure key metrics such as which products and in what quantities a customer is buying over time. Metrics also reveal hidden expenses such as cost-to-serve, to determine a customer’s actual profitability in gross and net margins. This analysis enables your team to quickly detect potential issues such as a decrease in order volume, and to identify new sales opportunities. Having a clear understanding of your customers allows you to improve efficiencies and lower expenses to create a more profitable business over time. A failure to resolve potential issues and create new opportunities leaves you vulnerable to the competitors who do.
Maintain or increase margins
Performing a price comparison enables companies to maintain or increase their margins. Using data analytics, you can drill down to individual transactions and compare what you are paying for your products to similar items offered by your suppliers. A price comparison will help you detect variances in product pricing to evaluate whether a price is reasonable. Likewise, you can compare the price of similar items between competitors. Finally, analytics allows you to examine historical prices over time, taking inflation factors into consideration, to determine whether pricing increases have been reasonable.
When performing a price comparison, it is important to consider the direct cost as well as the hidden costs of doing business with the individual supplier. Hidden costs include inconsistent lead times, a low delivery on time, in full (DIFOT) metric, incorrect orders, and other non-compliance issues. Such hidden costs can impact profit margins and negate the value gained during negotiations. Lastly, high cost-to-serve customers can wipe out your margin, tipping the balance from profit to loss. Examples of high cost-to-serve customers are those who place frequent, small orders rather than large, infrequent ones and customers who frequently return or exchange items. These customers drive up sales administration and delivery expenses, for instance.
Better serve your customers
Today, business-to-business customers don’t want to be limited to brick-and-mortar purchasing. Instead, they want the freedom to place orders anytime, from anywhere, and on any device. Expanding your online marketplace will better serve your customers, increase sales opportunities, and provide a platform for improved customer feedback. In addition to customer convenience, online purchasing provides a wealth of data on your customers from their first interaction with your website through their final purchase. This insight is a powerful tool to improve customer satisfaction. Additionally, the data can reveal customer trends and show which marketing campaigns are the most effective. This way marketing dollars can be directed to the most effective campaigns.
Give staff more agency with data
Providing your employees with data empowers them to become more efficient in their roles. As they learn ways to streamline their tasks and save time, they will have more freedom to do the things they are good at. Whether they improve their sales techniques, create innovative marketing campaigns, or ensure you are running a lean warehouse, data enables staff to become more strategic across departments. In a data-driven environment, work provides a sense of purpose and accomplishment rather than a means to a paycheck.
In addition to personal fulfillment, analytics solutions facilitate information sharing across departments, which fosters collaboration. When people collaborate, they each bring their personal experiences to the table and come together to determine the best course of action. Finally, providing mobile access to data enables your staff to work from anywhere, whether they are preparing for meetings on the go, or are generating reports for clients right from their tablet or laptop. Empowered with the facts, your teams can identify the best strategies to increase margins, negotiate with suppliers, and meet your customers’ needs.
To find out more about the commercial and strategic benefits of data analytics, download the eGuide: Take advantage of data.