Customer retention looks very different depending on your specific marketplace. Nevertheless, the same data elements persist across industries. And when appropriately harnessed, you can transform your sales history into a superpower of data and actionable insights.
Let’s explore a method of evaluating sales history to identify targeted sales opportunities within your existing portfolio.
Customer segmentation enables an organization to:
Many organizations already have an existing customer segmentation method. Within healthcare, for instance, you can divide patients into groups like acute care, long-term care, primary care, surgery centers, etc. On the other hand, retailers might use groups like rural, suburban, and urban or group by demographic data.
Create a product category profile for each segment based on a meaningful time horizon. A full calendar year might apply for seasonal businesses, while a 90-day horizon may apply for less seasonal businesses.
The result is the activity distribution for that particular segment across separate product categories. For example, historical sales activity may suggest that surgery centers spend an average of 25% on disposables every 90 days.
For each customer in the originating segment, evaluate the customer-specific product category distribution against the aggregate product category distribution to identify an opportunity.
It may warrant additional attention in scenarios where the spending is more than expected.
However, the primary focus is on those product categories where a customer spends significantly less than others in that segment. For example, a surgery center spending only 5% (compared to a usual 25%) on disposables will likely purchase them elsewhere.
To prioritize the opportunities, quantify the gap by multiplying the difference in the distribution by the customer’s total spend. This allows the sales team to target customers with the most significant opportunity.
For example, a $1,500,000 customer currently paying 10% on disposables will have a greater upside than a $10,000 customer spending 5% because more of their budget goes to that specific product category.
Transform this opportunity list into meaningful action. Distribute it to the teams capable of addressing these opportunities effectively based on tiers:
Re-running the WalletShare Analysis at regular intervals enables an organization to quantify the adoption and ROI of the analytics themselves. Through monitoring the spending within the targeted categories, you can create a clear correlation between the initial output, the sales team reaction (if captured), and the customer response.
By applying data-driven analytics such as WalletShare (or RFM), organizations can leverage their existing data as a superpower to segment their customers, create a baseline, quantify opportunities, provide targeted leads to their sales team, and measure the results.
For over 15 years, ProfitOptics has paved the way in helping businesses retain their customer base through conceptualizing, designing, and implementing targeted solutions — turning ambitious sales performance goals into a reality.
