In our 2021 State of Analytics in Distribution research, distributors recognized the importance of data. Ninety percent of distributor survey respondents said that analytics and BI were important in sales; and 80% said it was important to apply analytics tools to operations. More than three-quarters of respondents said that analytics and BI were important for C-level management.
The most common areas we saw adoption and widespread use of analytics in distribution were in sales performance and forecasting; operations; and by C-level management. Here are more than 40 ways distributors are using analytics:
Sales Analytics
Examples of ways distributors are using analytics to enhance sales effectiveness include:
- Customer contact analytics
- Lead scoring
- Sales forecasting
- Sales force management (sizing and geo-distribution)
- Sales process improvements (performance and compensation)
- Sales attribution between marketing and sales
The benefits of sales analytics include:
- Shorten sales cycles
- Increase sales predictability and success rates
- Optimize sales-deal sizes
- Improve profitability
- Ensure optimal sales coverage
- Strengthen performance
- Improve customer satisfaction and loyalty
Marketing Analytics
Examples of ways distributors are using marketing analytics include:
- Customer intelligence, including feedback or interaction data across channels, and demographics/psychographics
- Customer targeting based on customer history and profiles to identify similar customers
- Web analytics, including visits, navigation and conversion rate analysis
- Text and sentiment analysis
- Advertising and promotion, using A/B testing
The benefits of marketing analytics to the organization include:
- Understand your ideal customer profile and segmentation
- Understand shopping and buying behavior across channels
- Identify promotion, upsell and cross-sell opportunities
- Pricing strategy and optimization
- Market positioning and customer awareness
- Increase sales efficiency and effectiveness
- Improve planning and forecasting
Operations Analytics
Distributors are employing operations analytics for:
- Inventory planning and management (such as stock equilibrium, reorder automation, price negotiation)
- Warehouse operations (such as location optimization and merchandising across channels)
- Order fulfillment status
- Supply chain risk
- Forecasting
The benefits of using analytics to optimize operations include:
- Accurate forecasting for key customers
- Effective management across multiple locations
- Improve inventory turnover rate
- Improve order accuracy rate
- Avoid back-ordered inventory and loss of business
- Avoid dead stock, obsolete stock and related costs
- Optimize supply costs
- Optimize picking for accuracy and rate
- Reduce average delivery days
Customer Support Analytics
Distributors are using customer service analytics for:
- Customer onboarding
- Customer retention and churn analysis
- Customer lifecycle
- Purchase history
- Customer problem reporting analysis
- Customer satisfaction
- CSR agent response times and success rates
- Self-service customer experience analytics
The benefits of using analytics to improve customer service function include:
- More efficient customer onboarding and productivity
- Improve customer loyalty, satisfaction and retention (higher NPS and referrals)
- Customer lifecycle and CLV (higher order rates and AOV)
- Higher customer experience ratings
Finance Analytics
Distributors are using analytics in the finance function for:
- Financial accounting analysis, including variance analysis and accounting close
- Financial planning and forecasting, including risk analysis
- Compliance, regulatory and exceptions, including fraud and theft detection
- Procure to AP and payment analysis, such as approvals and exceptions, discounts and financing optimizations
- Order-to-cash collection analysis, including DSO and credit and risk
Benefits include:
- Rapid and accurate financial reporting
- Accurate financial forecasting
- Cash flow and working capital utilization
- Risk reduction
- Optimal financing costs
- Improve profitability
- Sustainable and predictable growth
- Improved investor relations
C-Level Management
The C suite is using analytics for a greater view of the business, including:
- High-level visualizations of company performance, including manage by exception and trends monitoring and analysis
- Discovery and exploratory analysis for new products, services and markets
- Predictive analytics for contingency and risk planning; opportunity analysis; growth and scale; and financing needs
- Buy-side analytics
- Exit planning
Benefits to the C suite include:
- Manage growth and scale
- Adapt to market dynamics
- Respond to opportunities
- Better strategy planning
- Better acquisition success
- Maximize enterprise value for stakeholders
Human Resources Analytics
Some distributors are using analytics to support human resource functions, such as:
- Hiring, including candidate assessments and screening (predictive index), job matching and time to hire
- Employee performance, such as measurement against goals and expectations; improvement programs; and termination rates vs promotions and career growth
- Cost analysis, including FTEs by department over time vs. benchmarks, and compensation vs. benchmarks
- Diversity and compliance
- Employee satisfaction, measuring absenteeism and turnover, and ENPS/referrals
The right analytics tools give you the capacity to take a step back and start managing the business in terms of where it’s going and how it’s growing, and to get unstuck from managing day-to-day.
Read how distributors are using and implementing analytics in their organizations, as well as opportunities to make analytics a clear competitive advantage in our free report, available now: 2021 State of Analytics in Distribution.
