Operational savings in pricing of 0,5 Mio Euros.
Total additional CLV of 2,5 Mio Euros a year.
Revenue through Customer retention of ~ 5,0 Mio Euros.
Problem
A leading electrical wholesaler in Baden-Württemberg, our customer, was looking to maximize its customer lifetime value (CLV) while reducing the costs of their pricing activities. Improving the effectiveness of their pricing and marketing through artificial intelligence is critical for the competitiveness in B2B distribution.
The company trades more than 2.6 million listed and over 20,000 stocked items, with more than 6,000 regional and national customers. Their product portfolio spans across 300 families. More than 1.4 million transactions result in revenue north of 150 Mio. Euros per year.
The customer has more than five years’ worth of historical sales data from their ERP and webshop systems. It was successfully using this data for classic business intelligence activities. Automatizing the insights gain and pushing pricing recommendations to the sales team has not worked in the past.
The main goal of the company was to maximize their customer lifetime value employing artificial intelligence. Predicting pricing, cross-selling and customer attrition should be part of the solution, and it should be tested and implemented in a few weeks.
Solution
After making available a data visualization tool to all sales personnel and wasting several months, the customer started a pilot project with Qymatix.
The company decided to implement the Qymatix Predictive Sales Software for three main reasons: it helped other wholesalers to increase CLV with cross-selling, churn, and pricing analytics; it offered the fastest time-to-value and the lowest total-cost-of-ownership. Moreover, they have now cancelled most of the subscription of the data visualization tool, saving a mid-five-figure number per year.
During the implementation project, the Qymatix expert-team discussed with the sales management the advanced predictive sales methods used by our software, including several use cases and examples for manufacturing and distribution. We also discussed management expectations, the viability of predictive analytics in their sales process and possible data quality issues.
The company gained a valuable understanding regarding dynamic pricing, the definition and measurement of churn, and the usage of cross-selling opportunities. Furthermore, during the pilot project, senior sales executives reviewed the plausibility of the pricing and cross-selling recommendations.
Results
The company identified CLV improvements (=earning/ margin improvements) of around 2,5 Mio. Euros per year, thanks to dynamic pricing, reduced customer attrition and uncovered cross-selling potential.
Together with the Qymatix experts, the customer established several improvements in their pricing-setting amounting to savings of around 0,3 to 0,5 Mio. Euros.
Executive management defined new customer retention measures. These measures, together with the Qymatix software, should help retain customers who would otherwise leave. This results in a revenue retention of approx. 5.0 million euros per year.
Cross-Selling potential with the smallest customers exploded. Before implementing Qymatix Software, each customer had to find out what other products they can source from the distributor. Now, in each customer contact, a sales agent can suggest the products with the highest probability of being needed.
“Qymatix Predictive Sales Software makes customer attrition risks and untapped sales opportunities over hundreds of customers and thousands of products easily accessible.”
Hermann Waselberger – AET Entwässerungstechnik GmbH
“Qymatix helps growing medium enterprises to find undetected business opportunities with existing customers. With a thousand active ones in our portfolio, Qymatix Predictive Sales Analytics is exactly what we need.”
Daniel Schuster – Welotec GmbH
“Qymatix understands the challenges most of the sales leaders in medium enterprises are facing. I was looking for a way to offer my customers useful insights with one click and I found it with Qymatix Predictive Sales Analytics.”
Thilo Oenning – BATAVER Sales Consulting
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