B2B Distributor Increases Customer Lifetime Value with AI-based Predictive Sales Analytics
How Qymatix expertise in AI and Predictive Sales Analytics helps a B2B distributor to increase the lifetime value of over 700 customers.
The customer is one recognised international distributor of spare parts for heavy and light construction machinery and vehicles. It sells around 4,000 different items to an estimated 700 sub-distributors across several international markets.
There are around 70,000 sales transactions per year, totalling a multimillion-euro business. However, a typical order can only amount to 30 € and is burdened by freight and additional costs. It is therefore imperative to increase the average value per transaction. Profitable transactions have a volume of around €4,000.
Sales representatives needed to be able to increase the value per transaction by offering cross- and up-selling, analysing prices and contacting customers that have not purchased again or have churned. Due to the sheer volume of customers and transactions, account managers are not able to efficiently analyse, control and implement corrective actions timely.
The customer has consolidated sales data from the ERP and web-shop interactions. Before working with Qymatix, Account Managers spend 25 to 40 % of their valuable time trying to gain insights using Excel.
Finding cross-selling was let to each sales representative to decide and worked well for complementary products or accessories, but not for cross-selling across different family products.
A significant part of the problem was the company lack of internal competencies in data analysis field and their scepticism regarding predictive analytics.
The company trusted Qymatix Solutions GmbH expertise in developing a sales analytics software and started collaborating with Qymatix Analytical Services.
In less than two weeks and with a minimal investment in data science, data quality and sales analytics, the customer was able to access a list of possible cross-selling products and accounts, customers at risk of churning. It was also able to run several different analyses of the final prices across hundreds of products.
The company started with a one-day workshop about predictive analytics – for non-technical personnel. Qymatix Analytical Services using Qymatix AI-based technology followed. The Qymatix expert presented the company with the most effective predictive analytics methods for its specific challenge.
The Qymatix team also showed the customer the expected economic benefits of the results.
As a result, the customer was able to start meaningful actions to increase cross-selling, reduce customer attrition and improve pricing strategies.
Qymatix assisted the management in understanding these results and recommended possible corrective actions. The usage of the Qymatix Predictive Analytics Software enabled an in-depth discussion on possible scenarios.
During this analytical services project with predictive sales, the management was able to spot new opportunities to increase customer lifetime value.
The firm gained specific competencies for the implementation of retention strategies. Moreover, the management determined fitting planning and control concepts and future-oriented KPI.
Changes in account management have already helped to increase the predicted customer lifetime value and to create competitive advantages through increased sales effectiveness.
Qymatix Customer Churn Prediction Software helps the company to accurately predict cancellations and reductions in usage with six months in advance. The company projects that with Qymatix Churn Prevention Software, it will be able to double customer retention rates. In addition, customer satisfaction is expected to increase through a more proactive and focused customer care.
With a payback period of fewer than four months, Qymatix helped the customer to define and reduce customer churn. Also, the company avoided non-necessary investments in data visualization and dashboarding tools that would have not supported the sales team to become more efficient.
During the project, Qymatix also helped the customer to set and improve field-level retention strategies using its Churn Prediction Software. Besides, Qymatix experts assisted the executive management in estimating the possible monetary benefit due to increased customer lifetime value.