Most businesses can collect data and a lot of it, but making that data useful and available to decision-makers is still a challenge, and it’s costing businesses billions in cash flows. If this is an area where your company’s solutions can help, quantifying the benefit might just be the key to winning the sale.
Is your target Target?
Retailers understand that better use of data to make key decisions can lead to a competitive advantage. For example, when to markdown items and by how much is an important and constant question, one that is best answered using data such as demand, price elasticity, response from competitors, and so on. Every extra dollar a retailer can charge for an item directly affects the bottom line. A major retailer with $1 billion in markdowns could conceivably add $10 million to its gross profits by improving its markdown pricing capabilities by 1 percent.
What about Manufacturers?
In manufacturing, speed-to-market is critical. Faster to market can lead to higher product success rates, higher sales, better profit margins and lower development costs. Better performing companies—those that develop products in about half the time as the industry average—do much better than their sluggish counterparts. If a company with annual sales of $1 billion can cut the time it takes to develop new products in half, it will add approximately $275 million in revenue and almost $20 million in profits in the first year.
Another biggie….Consumer Goods
Although this is a broad list of companies, a common challenge in these industries is to continue to meet customers’ performance requirements while maintaining the ability to reformulate products in response to changing input costs. Some have no choice but to—or are lucky enough to be able to—pass increased costs along to customers. But other companies are forced to eat the increased costs which directly lowers profitability (translate – not good). Most buyers of laundry detergent want to be able to clean their clothes. While the scent might matter to them, they don’t care about the exact mix of chemicals in the box. With timely access to the right data, companies can (and do) adjust their product’s makeup. If a company with $1 billion in annual revenue and 50 percent in raw materials cost can reformulate products 1 percent faster, it could realize an increase in annual profit of $5 million. And the examples could go on and on.
So how do you drop this to your bottom line? If you’re wowed by these numbers, chances are your clients will be too. Find out their pain points and do a little digging into their numbers. The idea that better data faster is good for business won’t likely be new to them. But how much better might be.