Unlock the power of data: analytics transformation for distributors
By Mike Marks
What makes effective digital transformation such a giant step forward is how it helps access and use the hidden value of the tremendous amounts of data available to distributors.
The process of cleaning up your data, getting it out of silos and outdated legacy software, and moving it into a modern cloud-based system, unlocks all kinds of possibilities. Because it means your data is now available for everything from sophisticated, up-to-date reporting to data visualizations. This includes capabilities for more accurate forecasting, as well as AI-enabled features like pattern recognition and predictive analytics.
That means you're ready to take a giant step forward by transforming your entire approach to analytics.
In previous posts about digital transformation and sales transformation, I explained that digital transformation is most effective when it's part of a holistic strategy that includes sales and analytics.
So now let's talk about the third part of that triad — the one that helps you connect the dots so that you can reap the rewards.
Becoming a Data-Driven Distributor
Of course, you can analyze past data about everything from sales to accounts receivable to form a picture of what was happening last week, last month or last year. But the transformative possibilities lie in discovering patterns to help you predict what's going to happen next month or next year — and then capitalizing on that understanding.
Mastering that third step is when you truly become a data-driven organization.
The Power of Prescriptive Data
Let’s think of this in medical terms. When you and your doctor discuss your symptoms, that's data about the past: what we might call descriptive data.
When your doctor offers you a diagnosis and a prognosis, we could think of that as predictive data, because it tells you what's likely to happen next, and it allows you to start figuring out what to do about it.
And when you and your doctor arrive at a treatment plan, that's prescriptive data: turning your understanding into action that can change everything for the better.
In business terms, this means using the power of analytics to get a diagnostic X-ray view of your customers' purchasing patterns, as well as their interests, motivations and pain points, so that you can predict their needs and behavior, and then prescribe a plan of action to keep them happy and engaged, as well as using those insights to acquire customers.
Reformulating your business strategy around prescriptive data allows you to become proactive rather than reactive.
Putting Behavioral Analytics to Work
Getting to the place where you have a prescriptive data strategy depends on a solid grasp of behavioral analytics.
In essence, we're using analytics not just to understand how customers (or for that matter, channel partners) have behaved in the past. We're using the powerful pattern-recognition capabilities of AI to do things like:
Reduce or eliminate customer churn by identifying customers you're in danger of losing and reaching out to rescue the relationship.
- Improve customer retention by doing more of what keeps your customers happy and reducing or eliminating friction points.
- Make smarter recommendations to boost sales and reawaken flagging interest.
- Identify trends in demand to stay a step ahead of the demand curve.
- Target advertising more effectively to reach the right customers with the right promotions.
- Reach out to customers proactively with tailored deals and offers to keep them engaged.
Mastering Smarter Segmenting
One of the best capabilities of analytics transformation is the ability to segment customers more intelligently and effectively. You’ll know not only what, when and how your customers are buying, but identify trends and then use those to extrapolate behavior. This will help you start preparing now to meet your customers where they'll be in six months or a year from now.
And even better, by studying the customers you have, you can identify insights that allow you to reach similar new customers and expand your base.
Designing an Improved Customer Experience
One of the best applications of the data-driven approach is to redesign and radically improve your customers' experience as they engage with your company — at every point of the journey.
Like never before, we can respond to customers' needs almost before the customers themselves are aware of those needs — if we make the effort to listen to what they're telling us with their behavior.
Doing this requires understanding the places where friction and churn are most likely to occur.
It's important to understand your customers' journey is a living document. It needs to be continuously updated so it continues to be an accurate understanding of what your customers are experiencing and any new directions they may take. Improving your customers' experience is ongoing, not a one-time project.
For more guidance on how to map your customers' journey and create a program to improve their experience, take a look at 6 Steps to Improve Your Customers’ Experience with Your Company.
Mike Marks is the founding partner of the Indian River Consulting Group, focused on B2B channel-driven markets. Prior to founding IRCG, Mike worked in distribution management for more than 20 years. Reach Mike at ircg.com.