3 Ways to Maximize Your Share of Customer Revenue
The majority of our manufacturing customers get 70-90% of their revenue from their existing customers. It is therefore not only critical to retain these customer relationships, but also to ensure they are capturing a fair share of their business.
And, most of our manufacturing customers have a business model that starts with a capital equipment sale followed up by an aftermarket parts and service business or they produce products that are more of a consumable where their customer is consistently purchasing the same or similar products from them.
When examining your current share, you can break this down into big capital spend which comes less frequently than parts and service or consumables, which are more frequent and typically higher margin purchases.
To maximize your share of both spends, you must shift from being reactive to customers reaching out to make a purchase to proactively monitoring and reaching out to the customer at the right time.
I have summarized three key strategies to maximizing your share of customer revenue:
1. Examine and Act On Customer Buying Patterns
Starting with a customer’s more frequent purchases, oftentimes looking at an RFM analysis, which shows recency, frequency and monetary spend, is an effective way to stay on top of purchasing patterns and detect when a customer may be slowing their spend on your products. I wrote about this in detail in my blog post “Three Guiding Principles of Sales Modernization.” The screenshot below illustrates an example of examining a customer’s current spend under the “Repeats Ready” section that highlights products outside their buying frequency or quantity. This insight shows the sales team the opportunity to have a targeted conversation with the customer about what is going on with their business and ultimately start to track any new opportunities that come out as a result of that discussion.
2. Be Proactive on Customer Expansion Or Modernization
Focusing on a customer’s less frequent but bigger spend on capital equipment requires knowing when they are planning to make this spend so that you can best position your solution. This approach can be handled in multiple ways including having a seamless process of pulling industry related data on new construction starts like we did by integrating Dodge with their Sales solution at Thomas Concrete.
In many other cases it requires more methodical follow up with the customer by having a segmentation and follow-up strategy that ensures you are staying on top of a customer’s expansion or modernization plans. This insight can come directly from your Sales tool to help the sales team spot these trends as illustrated below.
Either way, supporting these processes and routines in your Sales solution can improve your probability to be in front of the customer with the right conversation at the right time. Watch the video below to see the above scenario in action.
3. Find New Sales Opportunities in Your Customer Through Data
For many of our customers, the number of products they produce combined with the multiple ways that a customer could apply each product is beyond what any individual human can keep track of. That is why most organizations have matrixed sales organizations with multiple specialists to cover parts of the product line. Your sales data though can also tell you a lot about what a customer should be buying.
Think of applying the same statistical analysis and data science that leading online retailers use to your B2B manufacturing sales. Our objective here is to give the sales team insights about that customer that allows them to have a valuable and directed conversation with them that relates to one of your products or services. Your sales data can be analyzed to surface these high probability suggestions.
Take the example below where the solution is recommending the GIE Medium Duty Blower 500. The sales team could quickly look at that and decide if it is something that needs further exploration with the customer directly as they might be using a competitor product or an older model that is prime for an upgrade.
If you want to see the above scenario in action, you can watch the video below.
For more on these, and other sales modernization topics, you can see a full set of short demos here: https://www.elogic.com/advantage-sales-videos