Big data and micromarkets


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Big data covers scale, timeliness, and complexity. Companies that understand how to use it can power sales growth. B2B companies can best use big data to uncover micromarkets.

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Big data and micromarkets

  1. 1. Mining Big Data to Find New MarketsFeaturing a team of McKinsey partners: Manish Goyal and Homayoun HatamiSEPTEMBER 5, 2012
  2. 2. Today’s Speakers Manish Goyal Homayoun Hatami
  3. 3. Big data insightsWhat color of a used car How can a retailer use How did Google make big should you chose to product purchase data to money with a subtle minimize after sales estimate a pregnant change? issues? womans due date?
  4. 4. Big dataScale Timeliness DiversityApple generates 8M log Expedia updates flight Google uses social data forentries per second for Siri prices by the minute targeted advertising Distribution Analytics Hospitals share patient Cars drive themselves with info around the world machine learning
  5. 5. Mining big data to find micro-markets• Collect data from multiple sources: Company, channel partners, market research, customers and generate insights through advanced analytics and experimentation• Get personal in selling: Use micro-segmentation to target sales time, promotions (e.g., special bundling of products) and selling propositions (e.g., next product to buy)• Make it easy for the sales team: Create easy-to-understand toolkits that the sales team can act upon• Put big data at the heart of marketing and sales: Leverage insights to improve decision making and innovate your sales model (e.g., real-time decision- making)
  6. 6. CASE STUDY Case study: Doubling rate of growthSituation Pain points Impact▪ Leading chemicals player ▪ Low sales time Doubled rate of growth with high market share ▪ Unclear on where 200▪ Little or no growth in last opportunity exists few years ▪ Multiple different Lift data sources, no 100 “one source” of truth ▪ Inability to pin point root causes of underperformance Baseline Rollout
  7. 7. CASE STUDY Alignment of sales time with micro-markets to drive new business revenueActions• Redefined criteria for defining =Rep location rep territory Before After – Historically set based on ~200 miles ~200 miles existing customer base; not set based on opportunity for • 55% of time • 25% of time generating new business • 25% of • 25% of – Resulted in sales reps opportunity opportunity functioning as farmers rather than hunters• Setting rep territory based on areas of greatest opportunity ~50 miles ~50 miles significantly helped boost • 45% of time • 75% of time productivity • 75% of • 75% of – Doubled selling time for reps opportunity opportunity – 2x rate of new business production, 18 months after program launch
  8. 8. CASE STUDY How to identify root cause by micro-market
  9. 9. CASE STUDY Unlocking deeper and deeper insight Market share in California is 40%; no opportunity for growth Market share by Market share in California county countries varies by 4x Sales rep coverage Napa which has 10% share is not covered by any sales rep Partner coverage San Luis Obispo with 15% share has no partners Social media Acme plumbers are the most influential influencers partners to sign up in San Luis Obispo Competitor Riverside has a strong local competitor with better value prop Voice of customer Perceived ease of installations is primary reason for superior competitor value prop in Riverside Marketing spend Marketing spend in Riverside should be doubled to counter competition Cluster analysis Nashville (TN) shows the same characteristics as Riverside. Share best practices across micro marketsNote: Example of faucets manufacturer selling through own sales force, channel partners and DIY stores
  10. 10. CASE STUDY Driving 20% lift in renewal bookings Situation Pain points Impact • New CRM deployment • Inaccurate 20% renewals bookings increase provided basic reports, renewals contract however failed to provide quoting 120 integrated customer view • Missing contracts Lift 100 • Renewals sales practices • Excessive use of were driven by rep’s discounts to drive account knowledge rather sales than guided by true • Same amount of analytic insight effort applied to • Rep selling time was limited small and large by dirty data requiring lots valued of manual clean up, e.g. opportunities >60% of time was spent on non-customer facing activities Baseline Pilot1 Bookings target indexed to 100
  11. 11. Build a Big Data toolkit to bring micro-market insights to the frontline Big Data toolkit changes the way data has traditionally been used From … To … The front line (e.g., country managers) Big Data held centrally in access the analysis output and ongoing headquarters but fragmented performance monitoring across 20+ data warehouses Focused benchmarked approach leads to Analysis paralysis leads to prioritized tactical granular moves limited insights Looking backwards at what Predicting greatest impact going forward went wrong across comprehensive levers Time-consuming, one-off Repeatable standardized metrics and hypothesis-driven efforts templates tied to client’s systems
  12. 12. “Sales Growth: Five Proven Strategies from the World’s Sales Leaders” provides practical insights from sales leaders to sales leaders Contents I. Find growth before your competitors do 1. Look 10 quarters ahead 2. Mine growth beneath the surface 3. Find big growth in big data II. Sell the way your customers want 4. Master multichannel sales 5. Power growth through digital sales 6. Innovate direct sales 7. Invest in partners for mutual profit 8. Sell like a local in emerging markets III. Soup up your sales engine 9. Tune sales operations for growth 10. Build a technological advantage in sales IV. Focus on your people @McK_CMSOForum 11. Manage performance for growth 12. Build sales DNA V. Lead sales growth 13. Drive growth from the very top 14. Make it happen