RADical improvement to acquire and retain customers
Data is everywhere. As a marketer, you’re probably constantly told data is the new corporate currency as it transforms our markets and places growing pressure on the world’s marketing and sales teams.
So, how can you actually capitalise on Big Data to make a Big Difference to your business?
The answer lies in the RAD model.
Using RAD, you can quantify your market opportunities at the micro-level using an approach that we call “Share of Wallet Analytics”. As a result, you could double your revenue and income within two years. More on that later.
First, let’s explain what RAD is.
RAD stands for Retention-Acquisition-Development. This model takes an overview of your existing and potential clients, ranking them against two parameters: Account Size and Share of Wallet (SoW).
This breaks your portfolio into logical segments, which may (or may not) look a little something like this for a typical business operating in the B2B market:
By breaking down your portfolio into these nine segments, you can analyse your clients at a strategic, tactical and operational level. Your marketing and sales performance is now transparent and objective, helping you more effectively manage your business processes.
Let’s explain how this could work.
In above the example, this organisation has a low Share of Wallet for its large clients: almost 60 per cent of these big businesses are in the ACQUISITION segment.
If this percentage was significantly lower in the past, this could cause concern as this fictional business could easily lose its market share in the LARGE segment. This could be caused by a lack of focus on acquisition within this segment – providing a useful insight and a clear course of action for its marketing and sales teams.
Consequently, Share of Wallet Analytics provides a solid foundation on which to define or optimise your sales coverage strategies. It can also take a leading role when you assign accounts to different sales teams, where a distinction can be made not only between ‘hunting’ and ‘farming’ teams but also between field sales and inside sales.
The Value of Share of Wallet Analytics
Share of Wallet Analytics provides the perfect starting point for a renewed sales approach for your business, enabling the following:
- Detailed mapping of the market and discovering the white spaces and growth potential
- Dividing the client portfolio, according to client size and share
- Detailed market share analysis (by sector, location, etc.)
- Support for pricing strategies
- Defining a growth plan (aka an acquisition strategy)
- Improving your sales coverage model, i.e. through the more efficient deployment of Field sales vs. Inside sales
- Adjusting and changing your channel model
- CRM analytics, more in-depth client profile analysis
“Share of Wallet Analytics provides transparency and is essential for sales management,” according to data science specialists Intellerts’ senior data scientist, Frank van der Meer, who has worked with Share of Wallet Analytics for more than 15 years.
When working with HP, Van der Meer found that those countries realising the full potential of RAD have much higher sales figures. “When there were discussions with people from ‘sales’ about the potential of our business, RAD turned out to be correct at least 80 per cent of the time.”
When partly based on the use of RAD, the market share in a certain region could double in three years, according to Van der Meer, who added: “In another country, they could demonstrate with RAD that the potential of the public sector was seriously underestimated, by at least a factor of 2.5. The consequence of this insight was that the revenue and income in the public sector could be doubled within two years.”
“The advantage of working at a large international organisation like HP is that you see evidence that the developed RAD methodology works in all product categories in all markets.”
Implementing Share of Wallet Analytics
However, there is sometimes opposition to such change. “With the introduction of RAD, you continually see the same response,” says Van der Meer. “Either it is embraced, or it takes a lot of effort to get everyone behind it. RAD offers transparency and that can sometimes come over as threatening.”
As such, it’s important to avoid identifiable problems early on, for example, by ensuring your problem statement is clearly defined. Otherwise, a RAD analysis can quickly lead to confusion if, for instance, the first outcomes uncover sales opportunities that had never been anticipated by your organisation.
Frank van der Meer’s advice on what a business must do to successfully introduce Share of Wallet Analytics is clear:
“Put together an implementation team including the various stakeholders. After all, what we are talking about here is anything but the implementation of a standard software tool or other measuring technique.”
“It is a fundamentally different way of working and organising. It requires a change of mindset, team spirit and support from above.”
“You can mainly view the RAD concept as a simple but strong methodology to assess performances at the sales account, sales segment or market share levels”, explains Van der Meer. It can be applied to strategic, tactical and operational levels. “Almost everyone within an organisation can, therefore, profit from the insights that RAD delivers: sales, marketing, sales support, operations, management, sales reps, and so on. And it’s nice that ultimately the human contribution is vital. This makes it so exciting.”
Intellerts is a full service data science company and can help your business get the insights it needs using our expertise in Share of Wallet Analytics. To find out more, contact one of our team for a chat.