How B2B salespeople can sell more to their clients with data & analytics
The B2C – business to consumers – market, also known as retail, is familiar with the use of data and analytics. As an example, when searching for a new fridge or a hotel room, it is convenient to type the request in google and in few hours, advertisements promoting the searched product will appear on our social media. It is an efficient way to use data and analytics: the online search generates data which generate analytics.
Analytics are nothing but data-based action. When the system can measure the results of its analytics and improve them, it is called artificial intelligence.
B2B companies rarely leverage data to optimize the activity of their salespeople. As market conditions have changed, salespeople are in competition with platforms and call centers that commoditize the offer. Clients are becoming less loyal, as they receive cheaper offers for new solutions. In these conditions, salespeople take the decision to leave the companies for new opportunities and HR managers are unable to convince them to stay.
How B2B companies address these new challenges defines the loyalty of their clients and the stability of the sales team. 3 steps are necessary to improve:
- Assessment of the current situation (increase of sales by products, by client, by salesperson) and the risk of alternative solutions that compete with the traditional offer
- Add new data about clients and prospects to improve the quality of the information provided to salespeople
- Align the commercial credit department’s constraints with the sales objectives
Assessment of the current situation
Companies and marketing managers must analyse if the sales variation per client matches their potential. If the sales increased by 5% with a client but this client increased its activity by 100%, it is very likely that he could buy more.
The margin of each product should be analysed to understand if the product is becoming a “commodity”. When clients are asking for important price reduction, it means that new and cheaper offers are available on the market and they are an alternative for the buyer. Often, companies underestimate new technologies and newcomers to be a threat. However, when the new entrants hire your best salespeople it is often too late. If the payment delays are increasing it is also very likely that the risk rating and the credit limit aren’t used to qualify clients and prospects.
New internal and external data about clients and prospects improve the quality of the information provided to salespeople
Companies in general use few data about their clients or prospects such as their turnover, industry, and products purchased. The combination of internal data and external data provides a better understanding of the clients, their potential and helps to identify the clients and prospects with the highest potential.
Internal Data: Client size, industry, Payment behavior, Products purchased, Years of relationships
External Data: Turnover of the client, Risk rating, Credit limit, Performance versus the peer group or the industry (top quartile), Change of shareholders, Litigations with employees, clients or suppliers
Companies must assess the new competition arriving on their market to understand if the newcomers represent a threat for their positioning. When asking a specialist if his or her activity can be replaced by a software or a robot, it is very unlikely that they understand the risk and the technology. The variation of the margin is a very good indicator to alert the company and its management of the rising of a new competitor. If margin is decreasing years after years, the product or the service is becoming a commodity in the eye of the client.
It becomes more difficult for salespeople to sell their traditional product if they are in competition with cheaper alternative solutions. Therefore, if the salesperson cannot sell at the requested margin, it is very likely that he will go with his clients to one of these cheaper competitors.
Align the constraints of the commercial credit department with the sales objectives
The risk rating and credit limit are rarely used by sales departments. It is a waste of the company’s resources to visit prospects their commercial credit department will not accept.
Thanks to technology and the free data provided by public and official websites, companies can identify prospects in a good financial situation and the ones that are in difficulty, prior to visiting them. Salespeople can contact in priority the companies that are in the first quality quartile and marketing managers can develop solutions and different payment conditions for companies in the other quartiles.
Therefore, companies should align the objectives of the commercial credit department and the sales department to identify the prospects and the clients with the highest potential.
By better use of data, new processes, and the alignment of the credit commercial constraints with the sales objectives, companies improve their efficiency, salespeople visit clients and prospects that present the highest opportunities while mitigating the risk of unpaid invoices.
Article written by Karim Kheirat – Managing Partner