Companies – large and small – leave money on the table every day.
So, what can you do to overcome these challenges so that you are maximizing revenue and minimizing expenses? It all starts with your data.
The single greatest obstacle is visibility to the actual state of business operations. Without that awareness, you won’t have the foundation that you need to move forward. You are missing the traceability and auditability to be educated about and confident in your actual operations.
Start with the right foundation:
Clarify your universe of data. Take stock of what you have and where it lives, including financial, sales, customer, product, and other operational data. Understand what is relevant so you can create a full picture of your profitability. Identify gaps where opportunity exists to improve your data. Also, ensure you have access to the data.
Evaluate the integrity of the data. Just having the data doesn’t necessarily add value. Is your data incomplete or incorrect? Are there duplicates or even triplicates in your customer data that require consolidation? Is formatting consistent? Make sure to fix all the issues at the source in your master of record so that downstream applications represent accurate information.
After you’ve identified relevant and ensured clean data, you can now uncover areas for profitable growth.
Here’s how ProfitOptics has leveraged a solid foundation of data to uncover opportunities for our clients:
Recency, Frequency and Monetary Value (RFM) Analysis
Leveraging your sales history data, RFM Analysis evaluates customer behavior in terms of purchase recency, purchase frequency, and monetary spend. Using this information, you can reward loyalty or identify where you want to grow customer relationships. You can also identify customers who are likely already lost and make a strategic decision about whether you want to invest in chasing those customers.
Wallet Share Analysis
Using our clients’ customer segmentation rules, we evaluate customer behavior to identify which product categories each customer segment is purchasing in aggregate. By comparing the overall segment behavior with each customer’s behavior, we can identify additional sales opportunities for each customer at the category level. Those are opportunities for meaningful and targeted conversations.
Strategic Product Pricing Analytics
By identifying outliers in catalog or customer-level pricing, we can identify where money is being left on the table at opposite ends of the spectrum. While those unusually low outliers likely mean that there is an opportunity to increase your price without negatively impacting sales volume, unusually high outliers have likely already reduced your sales volume. In those instances, your margin may be stellar, but your overall volume is not meeting its potential.
So, where should you start? If you have the data, the experience, and the bandwidth – any one of which may be a challenge – you may be able to uncover these opportunities in-house. But you are likely limited in what you can do and how quickly.
A partner like ProfitOptics can evaluate the current state of your data and work with your teams to create the appropriate data foundation for next-level analytics. Once your data is available, clean, and understood, we will build on that foundation to elevate your operations and jumpstart your profitability.
Stop leaving money on the table. At ProfitOptics, we understand these challenges intimately and have worked with industry leaders for decades. Our solutions are designed to boost profitability even in the tightest margin scenarios. Learn more.
