Predictive Sales Analytics to retain and grow customer relationships
**Issue:** The client is a well-known international distributor of spare parts for both heavy and light construction machinery and vehicles, offering approximately 4,000 distinct items to around 700 sub-distributors across various global markets. With approximately 70,000 sales transactions annually, the business generates multimillion-euro revenue. However, typical order values reach only about €30, which, coupled with shipping and additional costs, necessitates an increase in average transaction values. Profitable sales average around €4,000. Sales representatives need to boost transaction values through cross-selling and up-selling, pricing analysis, and engaging with customers who have not made repeat purchases or have churned. Due to the high volume of customers and transactions, account managers struggle to effectively analyze, manage, and implement timely corrective actions. The customer has compiled sales data from their ERP and web shop activities. Prior to collaborating with Qymatix, account managers spent 25 to 40% of their valuable time using Excel to gain insights. Cross-selling strategies were left to individual sales representatives, which worked well for complementary products but not between different product families. A major hurdle was the company’s lack of internal data analysis expertise and skepticism towards predictive analytics.
**Solution:** The company turned to Qymatix Solutions GmbH for their expertise in developing a sales analytics software and began collaborating with Qymatix Analytical Services. Within two weeks and with minimal investment in data science, data quality, and sales analytics, the client gained access to a list of potential cross-selling products and accounts, as well as customers at risk of churning. They were also able to conduct various analyses of final prices across hundreds of products. The engagement started with a one-day workshop on predictive analytics for non-technical staff, led by Qymatix Analytical Services utilizing AI-based technology from Qymatix. The Qymatix expert demonstrated the most effective predictive analytics methods tailored to the company’s specific challenges, showing potential economic benefits. Consequently, the client was able to initiate significant actions to enhance cross-selling, decrease customer attrition, and refine pricing strategies. Qymatix aided management in interpreting these results and proposed corrective actions. The implementation of Qymatix Predictive Analytics Software facilitated in-depth discussions on various scenarios. Throughout this predictive sales analytics project, management discovered new opportunities to enhance customer lifetime value while gaining specific skills needed for retention strategies. The management also established appropriate planning and control mechanisms along with forward-looking KPIs. Adjustments in account management have already led to an increase in the projected customer lifetime value and provided competitive advantages through improved sales effectiveness.
**Outcomes:** The firm anticipates that, with Qymatix's help, it can boost the average transaction amount by 20 to 25%. Strategic pricing changes are expected to yield an overall profitability increase of 20 to 30% in the coming years. They avoided unnecessary investments in non-essential sales analytics tools and enhanced the efficiency of their sales team. During the project, Qymatix aided in enhancing preventive retention strategies and helped executive management estimate the potential financial benefits from increased customer lifetime value. The client successfully prioritized product lines and target markets.