Business intelligence (BI) tools have already become a crucial part of all successful businesses across many industries. Depending on their business needs and available financing, different companies choose different types of BI – some get full enterprise-level solutions while others get customizable self-service BI for certain departments only.
Over the next several articles, we’ll take a closer look at different departments within companies in which BI is used and discuss how advanced analytics can benefit them. As the sales department arguably plays the most important role in any organization, we’ll start from there.
Modern sales is a combination of effective communication, product knowledge, trust and persuasion. Although a BI solution by itself isn’t going to make a sale, it can act as a valuable support system and provide salesmen with insights and analytics that would give them an edge over competitors. Below are five ways how BI can help sales departments:
1. Identify higher-profit customers and focus on them
Although all customers are important not all of them are equal when it comes to bringing in revenues. There are those “big fish” accounts that may place a big order once in a while, stealing all the attention of sales reps; however, often it is regular, dependable and high-volume customers that bring the most amount of money in the long-term. With BI tools sales departments can better rank their customers based on multiple criteria, such as a value of purchase, recency, frequency and consistency.
Having built more accurate profiles of their most profitable customers, businesses can come up with strategies to acquire new customers with similar profiles and needs as their existing leading customers. By focusing on the needs of high-value customers, companies can also improve existing account management strategies, providing their more profitable customers with better deals and service.
2. Improve customers list
Once BI helps to better understand a company’s client portfolio, the company can start working on its lower value customers. There are often those low-value customers which salespeople can either try to replace by acquiring other, more suitable and active customers or work on re-engaging them. Sometimes these low value accounts are simply those accounts that were neglected or forgotten at some points. Upon identifying them, one may try to re-build relationships with them and see how a company can better serve to their particular needs that may have been ignored in the past.
3. Sell more to existing customers
With the help of BI, sales departments can better understand what kinds of products and types of services their customers prefer. When certain products are selling better one needs to understand why that is happening and most importantly why other products aren’t performing as well. BI can help to track data and customer demand, which in turn could reveal potential up-sale and cross-sale opportunities. For example, if your customer bought a new payroll service, perhaps a company is expanding and you should offer a better project management tool next time you approach that company.
With rising competition, it became very important to keep existing customers satisfied and have a portion of your future sales coming from them. A rule of thumb in successful sales is that retaining existing customers is way cheaper than winning new ones.
4. More accurate sales forecasts
When it comes to future revenues, it is mostly about knowing what to sell, to whom and when. By providing accurate and timely answers to these questions, successful companies can generate high revenues. This is where BI analytics can shine at its best, helping businesses to improve forecast accuracy and provide better details on purchase rates, amount of inventory available and profit margins. Having better insights BI tools can help to forecast seasonal demand, promotions, point out outliers and other valuable information.
Sales forecasting is a complex process and involves the cooperation of different departments, such as marketing, customer service, operations and sales, which leads us to the next point.
5. Support for other departments
In the real world, sales teams work closely with other departments, especially with marketing, operations and finance. A good BI tool can facilitate this cooperation, serving as a grease that helps everything run smoothly. Knowing what products are selling better or worse is a valuable information for marketing; meanwhile, having seen a forecast plan and product demand, operations can start preparing manufacturing and procurement, and HR taking care of staffing needs.
In writer’s own experience, for example, it was often a miscommunication between marketing and sales that gave the most amount of headache to salespeople. Marketing generated low-quality leads, which would then lead to lower sales. As a result, sales reps would be forced to do their own prospecting, losing their time searching for leads instead of working with clients.
The above-mentioned situation would have been avoided with BI tools. With a better software to plan and assess customers’ profiles, activities and demands, better marketing strategies would have been made. This, in turn, would have attracted better-qualified leads, which increased the sales. By using BI one can maximize revenues returned from advertising and smarter marketing decisions.
Overall, the effective use of BI can be a big help for sales departments, leading to improved customer prospecting, interaction and retention, as well as better cross-selling and up-selling opportunities and better forecast.