Leveraging Growth Analytics for B2B Sales

Leveraging Growth Analytics for B2B Sales

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The amount of data available for decision making and performance monitoring is growing constantly. The same is true for the potency of analytics and artificial intelligence. But not all companies are taking full advantage of data and analytics to drive growth.

For instance, many B2B manufacturing firms have limited transparency about what drives their margins. In addition, the decision-support tools they use are often backward-looking, rather than predictive. Even companies that have the right data frequently fail to act on what the data tells them. Many B2B firms tend to manage their sales forces based on intuition and experience, rather than data — an issue that is deeply rooted in commercial organizations across industries. Thus, companies oftentimes capture only a fraction of growth opportunities revealed in their data.

During an upswing, such behavior might be compensated by overall market growth. But in an economy characterized by surging inflation, recession tendencies, and supply-chain disruptions, organizations need to adopt a new mindset to sustain their business, build resilience, and drive growth. Specifically, they should consider doubling their efforts to generate relevant insights, derive concrete actions, and monitor performance meticulously.

B2B Leaders Drive Performance with Growth Analytics

The good news is that there is a solution — growth analytics — that can not only help shield companies against current and future crises, but also drive sustained performance beyond the market average. Growth analytics is the specific application of analytical approaches — descriptive as well as predictive — with a focus on achieving commercial success by driving profitable sales and optimizing an organization’s sales and marketing resources. For example, data and analytics can help sales managers identify opportunities at the customer level for new product sales or higher margins. Data-driven tools can equip sales reps for successful negotiations. Cross-functional applications at the intersection of supply and demand, such as adaptive sales allocation or portfolio optimization, can help companies build resilience during uncertain times.

Growth analytics is high up on the agenda for corporate investment at B2B companies. According to a McKinsey survey of more than 1,300 B2B leaders, about two thirds are planning to increase their investment in growth analytics and expect that the additional investment will drive accelerated profit growth over the next several years. These hopes are underpinned by the fact that expert users of growth analytics consistently report high-revenue growth (10% to 20%) and higher confidence in future profit growth than basic and intermediate users. On average, expert users of growth analytics display an investment sentiment that exceeds that of basic users by more than 40 percentage points. They invest primarily in data (+50pp net) and skills (+43pp net), presumably to take advantage of the ongoing data proliferation and address the talent scarcity that plagues employers across sectors and regions. Most successful players opt for a self-funding scheme, i.e., they use the proceeds generated by pilot efforts to finance company-wide roll-out and scale-up. Typically, the journey from sizing the potential to delivering impact at scale takes 18 to 24 months.

Expert Users Lead the Way from Insights to Impact

While many companies have implemented the basics of growth analytics, only a few have embedded them systematically in their sales organizations’ day-to-day activities. But a review of success cases from a wide range of industries shows that an end-to-end approach is required to unlock the full value of growth analytics.

Bunge, a global agribusiness and food ingredient provider, for example, adopted growth analytics to drive organic growth, a strategic priority for the company. Decision makers were aware that leveraging data and analytics would be crucial to beat the market. They designed a holistic multi-year roadmap to find new sources of value creation, promote insights generation, and build data-enabled sales processes to secure impact delivery.

As a part of the effort, the company implemented growth analytics, using external and internal data sources, to predict customer behavior. This has allowed the firm to examine product positioning, increase wallet share, and identify opportunities for additional product combinations. In production, the analytics have proven to unlock sales growth exceeding baseline expectations.

In another case, Forsta, a mid-sized software company, leveraged external data sources and advanced analytics to drive lead acquisition, cross-selling, and value-based pricing. A central element of the effort was a holistic data cube that combined more than 10 external data sources, such as fast-moving signals (e.g., purchasing intent), web crawler data, and market research. The data cube helped the company to identify, prioritize, and acquire promising customers. Furthermore, the cube provided frontline staff with rich customer intelligence during pitches, freeing up time that the business-development staff had previously spent on prospecting. Together with product and strategy levers, growth analytics helped the company double its valuation within 12 months.

Along with their willingness to invest, what sets expert users of growth analytics apart from their peers? Leading B2B players have used data and analytics to build a growth engine that propels their organizations from merely generating insights to actually delivering impact. Specifically, they excel in seven areas:

• Finding the value: They identify opportunity clusters where data and analytics can make a real difference (e.g., whitespace acquisition, pricing optimization, or seller effectiveness). A multinational chemicals company, for example, is in the process of implementing growth analytics to expand market coverage, tailoring its commercial approach to different markets with use cases such as in-season demand forecasting and churn prediction. The total opportunity is valued at € 1 billion.
• Pinpointing the opportunity. They combine internal and external data and build algorithms to identify concrete growth opportunities. During the Covid-19 pandemic, for example, a global telecommunications company set up a demand simulator to decide where and how to adapt sourcing and inventory management should certain countries go into lockdown. The tool helped the company avoid stock outages and improved its overall resilience.
• Planning the campaign: They establish a central “value cockpit” and a campaign mindset to prioritize and pursue growth opportunities systematically.
• Activating the omnichannel journey: They match opportunities to the right channels with the right offer to drive conversion, recognizing the fact that the number of channels B2B buyers use has doubled over the last five years.
• Empowering the seller: They support their frontline staff with relevant insights, capability building, and incentives across opportunities and campaigns. A global maker of paints and coatings, for example, rolled out growth analytics to more than 2,000 sellers to help them optimize pricing. The effort has led to an EBIT increase of more than 10%.
• Managing performance: They measure performance and feed lessons learned at the front line back into insights generation to improve value delivery over time.
• Building foundations: They tech-enable the entire system and put together a cutting-edge analytics team and commercial organization to run the engine.

While each of these levers is powerful by itself, expert users pull them all together for optimal impact.

Getting Started

It is not easy to achieve growth-analytics excellence overnight, especially when many decision makers are burdened with other challenges, such as eroding market shares and margins or short-term operational issues. Then again, getting started is not as difficult as many decision makers believe, and the use cases outlined above show that it is worth the effort, especially in times of market volatility.

To empower sellers with growth analytics and start a virtuous circle of data-driven growth, B2B companies should consider the following actions:

• Create clarity on the use cases that matter most across the customer lifecycle, considering classical commercial applications and cross-functional use cases.
• Set ambitious targets, backed by KPIs that cut across functions and provide transparency about causes and effects.
• Get going with a few promising use cases and identify customer-level opportunities to sustain margin growth. Do not wait for the perfect data stack. Use available data and work in sprints, engaging both analytics and sales.
• Establish a cross-functional win room that helps managers and sales reps translate insights into targeted actions at a granular level.
• Create an action-oriented performance culture, monitor the impact, and frequently celebrate success.

Once they have gotten started, B2B companies can establish the foundations for sustained impact at scale, including data, technology, and capabilities. Done right, growth analytics drives sustainable top-line growth and bottom-line improvements.

The authors wish to thank Priyank Jain, Patrick Wetzel, Annie David, Julian Larcher, Greta Carlson, and Cornelius Grupen for their contributions to this article.