x7 Improvement in Sales Forecasting Accuracy.
Total yearly benefits of 2.5 Mio Euros.
Improved cross-selling in OEM business.
Problem
The customer, active for longer than 70 years, is a global manufacturer in the defence and aerospace markets. It employs 3,000 committed associates worldwide, in more than 50 countries, helping their clients to operate more efficiently. They generated global revenue of more than 700 Mio Euros in 2019.
The German subsidiary is an internationally active industrial manufacturer with a leading position in the development, production, and marketing of high-precision mechanical components. It sells 10,000 parts to 1,500 customers, many of which are customer-specific developments (OEM). It contributes a total of around 60 Mio Euros to global revenues.
The subsidiary’s sales team quarterly forecasts the total turnover per customer and item numbers for the next twelve months. Although the sales team is relatively good at forecasting total sales per quarter, their accurately meet only 5 % of the products (measured as sales inside a -10 / +10 % deviation range).
This forecasting process represents a mid-six-figure number per quarter.
The main goal of our customer was to support and partially replace this process with the help of an AI-based Sales Forecasting Software while increasing their customer lifetime value (CLV). Besides, freeing their salesforce from this error-prone and time-consuming task is critical to improving customer-facing time.
The company has more than five years’ worth of historical sales data from their ERP system. They were successfully using this data for classic sales reporting to the corporation. Automatizing sales forecasts and pushing recommendations to the sales team has never been tried before.
Solution
The company decided to implement the Qymatix Predictive Sales Software to solve their unreliable forecast and to increase their customer lifetime value.
Three main motives underpinned their decision.
First, the Qymatix Software surpassed the accuracy of the sales team by a factor of x7, thanks to its federated machine learning models. Second, the Software was up and running in a couple of days. Lastly, from the first day, the Sales Analytics Software saved them more than 100 person-hours per quarter.
During the implementation of the proof-of-concept, the Qymatix expert-team discussed with the executive how to define and reduce customer attrition and fluctuation. Although there are few opportunities for cross-selling due to the high number of customer-specific articles, the Qymatix Software discovered opportunities for about 5 Mio. Euros. The expected total yearly benefits amounted to 2.4 to 2.6 Mio Euros.
Results
The Qymatix Software improved the accuracy of sales forecasting by a factor of seven. This improvement represented savings in out-of-stock and overstocks of several million euros.
There are expected total yearly benefits by fully implementing the Qymatix Software of around 2.4 to 2.6 Mio Euros. These benefits are due to the improvements in predicting demand, reducing operational forecasting costs and customer churn.
The Software discovered hidden opportunities for cross-selling that would have been impossible to find by the high number of articles and customers.
The Qymatix Predictive Sales Software identified a 25 % current customer churn and predicted the accounts with the highest attrition risk.
“Regardless of your company size, Qymatix is the best complement for your CRM system. Its predictive sales analytics tool helps sales leaders to focus on the projects with the best chances.”
Armin Harbrecht – aramido GmbH
“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 thousand active ones in our portfolio, Qymatix Predictive Sales Analytics is exactly what we need.”
Daniel Schuster – Welotec GmbH
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Free eBook for download: Churn analytics and prevention with predictive analytics
Managing and reducing customer attrition is an essential task of a sales manager. Sadly, sales executives often overlook customer churn in practice.
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