Data Drives Business

Consumer electronics companies are under huge pressure to compete in an increasingly crowded marketplace. The challenge is not only to reach ever more discerning customers and drive footfall into retail stores, but also in meeting customer expectations relating to the brand experience. And all this whilst increasingly ‘one step removed’ from the customer; given that the proportion of total indirect sales is expected to continue to rise over the next two years.

In order to get the right products to the right store at the right time, brands need immediate access to information.  If they want to respond to customer demand and market conditions to change course as required, they also need to tighten links with supply and sales chains. Unfortunately, all too often, it is still the case that businesses get too little information, too late – and frustratingly, what is available is often inaccurate.

Poor data leads to an inability to manage inventory effectively, which can result in lost sales. It makes it much harder therefore for the vendor to keep operating costs at a competitive level. Perhaps more importantly, it also represents a missed opportunity to work with the channel to create and deliver a positive shopping experience that builds customer loyalty.

Independent research at the start of the year highlighted a series of key data related issues that needed to be addressed. These ranged from data accuracy, to the benefits of seeing data in real time through to improving partner return on investments; all driven by encouraging the sharing of information that is being collected at all customer touch points.

Confidence levels in data accuracy must be improved in 2018. A staggering 43% of interviewees confessed they had shared data with the Board in which they were not completely confident, whilst 42% admitted that inventory tolerance alert levels were based on inaccurate data. Elsewhere in the chain standardisation of customer data collection was causing headaches – 80% were of the opinion they had lost commercial opportunities because of limitations in their ability to collect, collate and analyse channel data recorded.

Just 19% of the companies interviewed were confident that they had a 360-degree view on inventory at all times and 52% admitted that they had to trust channel partners, because they just couldn’t manage the data collection processes in-house.

Granular level transactional data and complete visibility into channel sales must also be top of the agenda if companies are to reduce errors and improve the entire incentives management process. More than $1 trillion is estimated to be spent by high-tech companies on Marketing Development Funds (MDF) and rebates for channel partners, in an effort to increase sales in targeted geographies.

However, a recent SiriusDecisions survey (The Pulse: The State of Channel Partner Incentives 2016) reported that 42% of respondents were only able measure incentive performance at a partner type/tier level, and just 16% could measure incentives at a geographical/regional/country level. This really indicates an inability to understand the impact on individual partner profitability.

As the move to greater automation continues to gather pace, 2018 will no doubt see greater investment in solutions that enable vendors to improve data accuracy by seamlessly collecting, cleansing and curating channel data. We also expect to see increased uptake of big data technologies to process millions of transactions to validate, calculate and manage incentive payouts for a wide range of incentive programmes, from MDFs and co-op funds, to deal registrations, referrals and others.

The aim, naturally, is to use clean and accurate data to target the right partners with the right programmes, without causing demotivating delays brought about from failing manual processes. Increasing partner participation is also about linking drive- desired behaviours with an effort to then increase channel sales – while decreasing costly overpayments.

Decision grade data is also expected to contribute to business growth next year.  It will enable vendors to put much greater focus on profiling and segmenting channel partners, on the basis of their growth potential, whilst delivering training and incentives programmes in parallel that are relevant to business goals. This will not only provide greater understanding of which partners are most profitable or ‘core’ to the business but it will also identify those that are not.

It should make it easier to identify those that are delivering a good return on investment (ROI) in relation to the MDF funds allocated to them, and the success of marketing initiatives overall. It could also provide improved visibility of ‘fledging’ accounts that have the most potential for growth in the future and require greater investment now.

Unfortunately, the SiriusDecisions report also found that only 14% of respondents said that channel incentives met their goals. So, at a time when competition for partner loyalty, energy and focus is at an all-time high, vendors would be wise to take note of this. The key message for 2018 is that just as consumers expect to receive a tailored and highly personalised service, so do channel partners. A ‘one size fits’ all reward and incentive approach to the channel is no longer sufficient. Automating data collection, simplifying the way in which vendors work with partners to secure sales, and building compelling reward / success programmes is more likely to be the way forward.

Data Drives Business Success | BCW
BCW

Data Drives Business Success