A recent IBM study cites that getting closer to customers is a top priority for 88% of business leaders. Everyone gets it: to be successful organizations must understand customers, meet their needs, and do it in a in a way that builds trust. To understand customer needs, companies are now spending huge amounts of money on “big data” analytics. The goal is to use data to manage and predict customer needs. I don’t disagree that analyzing large volumes of data can yield some powerful insights, but I would argue that most B2B organizations do not systematically collect and capture the data they really need to become better at understanding and meeting customer needs.
Let’s put ourselves in the shoes of a customer, who ask two basic questions from their suppliers.
- How will your products and services impact the bottom-line of our business?
- How is your solution better than that of your competitors?
Answering these two simple questions not only requires data on how customers run their business but also knowledge of the capabilities of your competitors.
Case Study: High-Tech Telecom Supplier
The case below shows how the “right data” can be better than “big data” when it comes to understanding customer needs and making better business decisions.
Your organization has developed a new integrated chip set for telecom equipment makers. Your new chip set not only improves network performance but also eliminates the need for a back-up circuit board because of a breakthrough in design. Your team wants to analyze data in their brand new BI application to determine what customers to target and set a price, but after analyzing transaction, product, and customer data they realize that they don’t have visibility into how the new design will impact the customer’s bottom-line. They also realize that they don’t have insights into the latest technology offered by their main competitor.
The reality is that organizations rarely collect and organize data on how their customers operate their business. When was the last time you saw a database that was hooked up to your analytics platform containing the answers to the following questions about customers?
- What is the current process for installing a chip set?
- What is the current process for installing the back-up circuit board?
- How long does that process take?
- How many people are involved in installing and testing the existing chip set?
- What are the labor and handling costs of installing the chip set and backup circuit board?
- What are the operating costs of having to run a back-up circuit board?
Answers to these questions will help you quantify how your new design can impact your customer’s bottom-line by calculating the cost savings of not having to install, test and run a back-up circuit board. Insights into operational characteristics of customers can shape decisions on what customer to target and how much you could charge for your solution. So now we move to question # 2: “How is our chip set any better than the competition?”
Answering this question using “big data” analytics would require active tracking for product features and benefits offered by competitors. This type of competitive data is not often captured in a systematic fashion. When it comes to competitors, organizations can barely capture win/loss data. Using the example above, the questions that we need to be able to answer and therefore capture are:
- How does the competition’s latest chip set’s impact network performance?
- Does the new technology offered by the competitor still require an extra back-up circuit board?
- Are there other features and benefits offered by competitors that you can’t match?
Realizing the need for capturing data that was not in the BI system, the product marketing team could do some online research into their main competitors. The goal is to determine what that the latest solution from the competition is able to provide. For example, you can uncover whether competitors provide similar levels of network performance but don’t eliminate the need for a back-up circuit board. Once the organization understands what the competitor is able to offer then you are able to quantify the value of their unique differentiation.
By adopting LeveragePoint as the platform, the team would be able to capture the product features and benefits offered by the competition. The application also enables them to quantify the bottom-line impact on the customer’s production process that would result from eliminating the need for installing and testing a back-up circuit board. After completing the analysis, the telecom equipment manufacturer could reduce costs by $118 – $132 per unit. Using this insight, marketing teams can create an economic value proposition that Sales team used to engage in a value conversation with customers and support selling at a price premium over the competitive solution.
Business leaders from product management, marketing, pricing and sales can benefit by working under a single sales and marketing platform that systematically captures data on both operational characteristics of customer and capabilities offered by competitors. By collecting analyzing and using the right data the organization was able to successfully attack the market and answer the key questions from customers with confidence.
What is your organization using today to answer the two most pressing questions from customers?