Growth analytics is a powerful driver of stability and organic growth for B2B companies, especially during times of market volatility. Pioneers consistently achieve 10 to 20% revenue growth. Getting it right is no small feat, but getting started is a prerequisite for profitable, market-leading growth.
The amount of data available for decision making and performance monitoring is constantly growing. The same is true for the potency of analytics and artificial intelligence. But not all companies are fully leveraging data and analytics to drive growth.
For example, many B2B manufacturing companies have limited transparency about what drives their margins. Furthermore, the decision support tools they use are often iterative, rather than predictive. Even companies with the right data often fail to act on what the data is telling them. Many B2B companies tend to manage their sales forces based on intuition and experience, rather than data – an issue deeply entrenched in commercial organizations across industries. Thus, companies often capture only a fraction of the growth opportunities their data reveals.
During an upswing, such behavior can pay off in the overall growth of the market. But in an economy characterized by rising inflation, recessionary tendencies, and supply-chain disruptions, organizations must adopt a new mindset to sustain their business, build resilience on, and drive growth. In particular, they should consider doubling their efforts to generate relevant insights, get concrete actions, and closely monitor performance.
B2B Leaders Drive Performance with Growth Analytics
The good news is that there is a solution – growth analysis – that not only helps protect companies against current and future crises, but also drives continuous 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 sales and marketing resources in an organization. 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, help companies build resilience in times of uncertainty.
Analytics development is high on the agenda for corporate investment in B2B companies. According to a survey by McKinsey of more than 1,300 B2B leaders, about two-thirds plan to increase their investment in growth analytics and expect that additional investment will drive faster revenue growth in the next few years. These hopes are supported by the fact that expert users of growth analytics consistently report high revenue growth (10% to 20%) and higher confidence in future revenue growth than basic and intermediate ones. users. On average, expert users of growth analytics show an investment sentiment that exceeds basic users by more than 40 percentage points. They are primarily investing in data (+50pp net) and skills (+43pp net), likely to take advantage of the ongoing proliferation of data and address the talent shortages plaguing employers across sectors and regions. Most of the successful players opt for a self-funding method, i.e., they use the revenues generated by the pilot efforts to finance the company-wide roll-out and scale-up. Typically, the journey from measuring potential to delivering impact at scale takes 18 to 24 months.
Expert Users Lead the Path from Insights to Impact
While many companies have implemented the basics of growth analysis, few have incorporated it systematically into the day-to-day activities of their sales organizations. But a review of success cases from a wide range of industries shows that an end-to-end approach is needed to unlock the full value of growth analytics.
Bunge, a global agribusiness and food ingredient supplier, for example, has adopted growth analysis to encourage organic growth, a strategic priority for the company. Decision makers know that using data and analytics is essential to beat the market. They designed a holistic multi-year roadmap to find new sources of value creation, promote insight generation, and establish data-enabled sales processes to ensure impact delivery.
As part of the effort, the company implements growth analysis, using external and internal data sources, to predict customer behavior. This allows the company to assess product positioning, increase share of wallet, and identify opportunities for additional product combinations. In production, analytics have proven to unlock sales growth that exceeds baseline expectations.
In another case, Forsta, a mid-sized software company, used external data sources and advanced analytics to drive lead acquisition, cross-selling, and value-based pricing. A central element of the effort is a holistic data cube that integrates more than 10 external data sources, such as fast-moving signals (e.g., purchase intent), web crawler data, and research in the market. The data cube helps the company identify, prioritize, and acquire good customers. In addition, the cube provides frontline staff with rich customer intelligence during pitches, freeing up time spent by business development staff on prospecting. Along with product and strategy levers, the development of analytics helped the company to double its valuation within 12 months.
Along with their willingness to invest, what differentiates expert users of growth analytics from their peers? Leading B2B players use data and analytics to create a growth engine that propels their organizations from simply generating insights to actually delivering impact. Specifically, they excelled in seven areas:
- Finding value: They identify opportunity clusters where data and analytics can make a real difference (for example, whitespace acquisition, pricing optimization, or salesperson effectiveness). A multinational chemical company, for example, is in the process of implementing growth analysis to expand market coverage, adapting the commercial approach to different markets with use cases such as forecasting in demand time and churn prediction. The total opportunity is valued at €1 billion.
- Focus on 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 built a demand simulator to decide where and how to adapt sourcing and inventory management when certain countries go into lockdown. The tool helped the company avoid stock losses and improved its overall stability.
- Campaign planning: They built a central “value cockpit” and a campaign mindset to prioritize and pursue growth opportunities systematically.
- Activating the omnichannel journey: they match opportunities with the right channels with the right offer to drive conversion, recognizing the fact that the number of channels used by B2B buyers has doubled in the last five years.
- Empowering the seller: They support their frontline staff with relevant insights, capability building, and incentive opportunities and campaigns. A global maker of paints and coatings, for example, launched growth analytics on more than 2,000 vendors to help them optimize pricing. The effort led to an EBIT increase of more than 10%.
- Performance management: They measure performance and feed lessons learned on the front line back to the generation of insights to improve value delivery over time.
- Building foundations: They technology enabled the entire system and brought together a cutting-edge analytics team and commercial organization to run the engine.
While each of these levers is powerful on its own, expert users combine them for the best effect.
dash
Achieving growth-analytics excellence overnight is not easy, especially when many decision makers are overwhelmed by other challenges, such as eroding market shares and margins or short-term operational issues. . 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 salespeople with growth analytics and start a virtuous circle of data-driven growth, B2B companies should consider the following actions:
- Clarify the use cases that are most important throughout the customer life cycle, taking into account 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.
- Continue with some good use cases and identify opportunities at the customer level to drive margin growth. Don’t wait for the perfect data stack. Use available data and work in sprints, engage in analytics and sales.
- Build a cross-functional win room that helps managers and sales reps translate insights into targeted actions at a granular level.
- Create a performance culture that focuses on action, monitoring impact, and regularly celebrating success.
Once they get started, B2B companies can build the foundations for continued impact at scale, including data, technology, and capabilities. Done right, growth analytics drive sustainable top-line growth and bottom-line growth.
The authors would like to thank Priyank Jain, Patrick Wetzel, Annie David, Julian Larcher, Greta Carlson, and Cornelius Grupen for their contributions to this article.
