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Why Distributors Should Use Supply Chain Analytics

September 19, 2013BY AMS Editor

Supply chain analytics can help distributors rank clients in terms of relative worth, allowing more resources to be used on more valuable customers.

Big Data offers an excellent opportunity to gain insights into customers and determine whether they’re high-value or low-value, according to an article on the Enterra Insights blog. Once you’ve segmented your customer base, you can focus on high-value clients.

This concept can even be applied to prospective customers. You can use Big Data and supply chain analytics to identify and target desirable customers.

“Marketers typically focus on new customers with the intent to convert the highest number possible into repeat purchasers. While this is a noble endeavor, it’s simply not practical,” Mark Zilling, executive vice president and partner at MeritDirect, states in the article. “All new customers are not equal in regards to their future potential and the traditional tools are not adequate to segment greater potential customers from those of lesser value.”

It is important to segment your customer base. In addition, your employees – from sales reps to customer service reps – must be aware of who the high-value customers are when interacting with the customer base.

In order for this to work, all employees using the distribution ERP system need to have access to the same customer data in real time. Furthermore, the view of the customer should be a “customer 360,” where all aspects of that customer are visible from a single screen. After all, it is not very useful to identify your high-value customers if you are not able to ensure that your entire team treats them as high-value customers.

Segmentation is becoming more prevalent due to advances in supply chain analytics. With Big Data, organizations are able to analyze more data points on existing and potential customers. That means there’s no excuse for merely taking a first-level view of customers and stopping there.

For example, a customer that orders 1,000 units per month might seem like a great customer, but what if they frequently return products and change orders at the last minute? Today it’s easier than ever to access data that allows organizations to thoroughly evaluate customers quantitatively and qualitatively. And in the end, that helps distributors to better segment customers and to make smarter business decisions. By concentrating your employee’s time and attention on your best customers, you can expect a higher return on that investment.

Source: Enterra Insights, August 2013

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