Companies might think they understand what their customers want, but they’re often relying on rules of thumb and questionable assumptions.
These generalizations may be fine 80 percent of the time, but they don’t account for outliers, exceptions or exclusions. Using customer analytics gives you a more precise understanding of the demand for your products and services, revealing additional opportunities to make more money.
Let’s say you’re selling medical products, and most of your customers buy the same mix of products from your portfolio. But some customers are probably trying to cherry-pick by purchasing only certain products, while others may always buy your “good” products and solutions, instead of the “better” or “best” options.
These outliers represent opportunities for your sales team to drive additional revenue, but you need customer analytics to identify them by comparing the buying behavior of similar customers. Having the right analytics tools validates your assumptions about customers while also helping you go after sales by showing you opportunities that are new or actionable.
Many leading companies now also use a combination of customer analytics and data science to generate recommendations based on what similar customers are buying. This scientific analytics approach gives your sales reps automatic insights and guidance that helps them take advantage of cross-sell and upsell opportunities, driving additional revenue.
Rebates are a perfect example of how customer analytics help you capture additional opportunities without even having to push for additional customer purchases. Companies often offer discounts or rebates based on volume or revenue, such as a two percent discount at the end of the quarter if a customer buys more than 1,000 widgets.
But most companies do a poor job of making sure that customers still qualify for the rebates over time. As a result, you could end up with a customer that hasn’t met the thresholds for a certain discount for years, and it’s hard to raise the price at that point, because they’ve grown accustomed to getting that discount anyway.
Customer analytics makes it easy to ensure that customers are adhering to rebate standards, which is a great way to improve profitability. Having data that tracks customer purchases gives sales reps the confidence to revoke a discount that no longer applies and lets them know when a more conservative discount would be more appropriate for a customer renewing a contract.
When you combine customer analytics with pricing guidance, it helps reps offer prices that win the business while protecting margins from erosion. Sales reps are constantly getting pressure from their customers to offer a discount or increase the percentage. Analytics give reps a clear picture of what prices have allowed your company to win. Having good visibility into proxy deals provides reps the confidence to push back against discount pressure from customers. Since sales reps are generally competitive people and these analytics show what prices others in the sales organization are getting, reps are also less inclined to offer sales.
Good pricing software may also offer deal scoring and benchmarking that turns customer and market data into actionable pricing recommendations. This type of system arms your reps with price recommendations based on what deals you’re winning in that place and time among customers buying similar products.
If you’re ready to drive new revenue with customer analytics, start by creating a short wish list with five or 10 must-have business solutions, then determine what charts will help you uncover the answers to these business issues. Finally, figure out how to get that information to sales reps in a timely fashion. Starting small and having successes along the way helps secure support for customer analytics and moves the process forward.