Do Not Trust Your Sales and Marketing Teams.  Provide Data to Enable Their Success.

“I don’t look to jump over seven-foot bars:  I look around for one-foot bars that I can step over.”

– Warren Buffett, Investor

While still a powerful engine of productivity, the U.S. economy took a major hit in the last decade, and so did many businesses. Some survived. Some did not. All were impacted, good or bad, which leads to some important marketing questions: 

In your business, would you sell and market differently if you knew how much revenue and profits were created by the top ten, or 20 percent, of your customers? What if you learned that five percent of your customers generated over 70 percent of your revenue & profits? Or that your top customers’ life-time value was five times or ten times larger than that of your average customer? Would you become a “contrarian” sales and marketing organization if going against the grain would help you survive a dangerous world economy? 

BiltData.ai is convinced that picking your customers before they pick you is more important than ever in a global market in which economic experts predict substantial headwinds.  Today, experts on the left think the economy won’t expand without more government control, while those on the right say too much government control has made business leaders afraid to take risks. Yet business can survive, reinvent itself; even thrive. 

But none of this will happen without a new approach, one that recognizes that if you are to control your businesses’ destinies, then you must concentrate on using a data-driven approach.  Sales and marketing is a science first; an art second. Therefore, your approach should be rooted in fact-based decision making. 

BiltData.ia uses a maverick methodology that enables you to execute a clear, quantifiable and focused sales and marketing strategy—one that guides you to target the five to ten percent of your customers and prospects who drive the majority of your revenue and profits. 

Its premise is that you can pick your customers before they pick you, aiming your break-through sales and marketing capital and campaigns at VIP customers. You can facilitate gain and expedite your competitor’s loss by focusing on best customers and future best customers. 

On balance, the U.S. economy remains a powerful engine of productivity, and some say growth will come despite major challenges including health care, climate change, and government regulation. But no one really knows what’s ahead. 

BiltData.ai will improve your business success no matter which future predictions prove correct. Simply put,BiltData.ai will guide through uncertain economic times to carefully choosing your best clients or, more precisely, quantitative sales and marketing as opposed to the “one size fits all” approach. We’ve seen this approach too often in the past, and will continue to see it unless business understands that the world has changed, and if they are to adapt, they must change their marketing approach along with it. 

Sales & Marketing is a Science First, and an Art Second

Consider this: 

According to a year long study of more than 1,300 brands and 54 million shippers:

• 1.2% of customers accounted for 80% of Budweiser’s sales
• Only one percent of Iams pet food customers accounted for 80% of their volume
• Only 2.5% of customers accounted for 80% of sales of the average package-good brand.
• Virtually all brands studied generated 80% of sales from 10% or less of shoppers.
• At VOLVO Rents, an international construction equipment rental company, 10% of customers generated 83% of revenue and profits and transacted 12+ times per year.  The company allocated 80% of sales and marketing capital to sell to the top 10% of customers and prospects.
• A leading casino operator identified group of customers who produced most of the company’s profits. They found that people who spent between $100 and $499 per trip accounted for about 30 percent of gamblers, but were 80 percent of revenue and nearly 100 percent of profits. 
• A leading hotel chain took customer segmentation to a new level with a “secret” pilot program to target only the prime customers of competitive hotels.  
• According to the National Golf Foundation, avid golfers (those who play 25 or more rounds a year) constitute 23 percent of all players and generate 63 percent of spending on fees and equipment. 

Not All Customers are Created Equal in Terms of Loyalty and Profitability.

Though BiltData.ai goes far beyond the tried-and-true “80/20” principle and gives you the data to support a nuts-and-bolts business model, there is still merit in the basic 80/20 premise. The premise is credited to Vilfredo Pareto, a 19th century economist, who noted that 80% of the wealth in a society is usually attributed to 20% of the population. J.M. Juran noted that this same principle held across many other types of relationships in society and business. He coined the term the Pareto Principle, which later became known as the Rule of 80/20 (Robert Sanders (1988), “The Pareto Principle: Its Use and Abuse,” The Journal of Business & Industrial Marketing, 3 (2), 37- 40.). The author of The 80/20 Principle, Richard Koch, says “markets and customers, on which any firm should be centered, must be the right ones, typically a small minority of those that the company currently owns.” He goes on to state the three “golden rules” of effective, segmented marketing: 

Golden Rule #1: 

• Focus on providing a stunning product and exceptional service in 20 percent of the existing product line, for it will generate 80 percent of your fully-costed profits. 

Golden Rule #2: 

• Your sales and marketing teams should devote time and efforts toward delighting and keeping forever those 20 percent of customers who provide 80 percent of sales and profits. 

Golden Rule #3: 

• All innovation is product-led. Since you are likely to obtain more than 80 percent of your true profits from 20 percent of your product line, focus your creative marketing on new products or services within that 20 percent, particularly if the product/service/ price/packaging is obtainable elsewhere. Your only hope to compete is to innovate, and you can’t innovate without a new product or service. 

Retaining an Additional 2% of Customers Has the Same Effect as Cutting Costs 10%

In sales and marketing, many of us have been taught to be followers—blissfully imitating what our competitors do, and wondering why sub-par profitability plagues many industries and companies.  A competitor’s marketing campaign or sales strategy, especially if implemented by the market leader, has a curious seduction on the followers. We can hear middle management within these companies as they plead with their bosses: “Let’s do what they do, and we’ll become the market leader.” 

But if you follow this line of logic, you may end up like competitors we all know, many of which are out of business or became dependent upon government assistance to survive.  Want to feel how close “failure” is to your own business? On your next drive down a major street in your city, count the empty spaces in the strip malls and shopping centers, or consider all the restaurants, at which you frequently dined, that are now closed. 

Now personalize some of these failures to your own industry. Think of a few competitors or businesses that are struggling today. Maybe they’ve already failed and their doors are closed. It’s likely that even some of your customers are no longer around. Not good signs. 

All you have to do is dare to be different: that is “be a contrarian” in your sales and marketing by following the guidelines presented by BiltData.ai. You will be better than your competitors as a result. 

The Central Beliefs of BiltData.ai are five-fold: 

1. Best customers (VIPs, repeat customers or regulars) generate the majority of most businesses revenue and profit. They account for a small percentage of total customers and a large percentage of revenue and profit. For many companies, ten percent of customers generate 70 percent of revenue and profits. 

2. Customize Your Customer Support Systems to Support the “Best of the Best” customers exclusively. Given the importance of B-of-B customers, it is essential that you tailor your operations and your entire company so that these customers have complete flexibility and adapt processes that support them. 

3. Clone your “Best of the Best” customers. Instead of focusing on busy work and selling and marketing to the masses, your central aim should be focused on multiplying your success with best customers by identifying their behaviors and characteristics, and cloning them into best prospects. 

4. Stay true to the Yearly and Lifetime Value of Customers. By focusing on the yearly and lifetime profitability of your customers, you can shift out of short-term decision making, and instead evaluate their profitability to your business over a longer period of time. You can then tailor your business support processes to the different segments within your customer base (specifically best customers). Many businesses treat all customers the same—or resort to ‘lowest common denominator decision making: “If I make an exception for you, then I will need to make exceptions for everyone.” Yearly and lifetime value calculations will allow your employees to make exceptions for your B-of-B customers. 

5. Develop an Early Warning System for “Recently Departed” Customers. Develop an enterprise-wide early warning system that lets you know when a B-of-B customer defects or can no longer maintain his or her status as one of your best customers. An early warning system allows you to quickly respond to a competitor poaching your B-of-B customers or a customer service issue. Timely action is essential to keeping these valuable customers. 

Make a choice, consciously, as to how you will sell and market—either choose to sell to the masses or choose to market to only a few. Will you spread your efforts across the board or concentrate your efforts on the few customers and prospects that drive the majority of your revenue and profits? 

It’s Not Magic; Just Math

The BiltData.ai methodology is effective for any type of business-to-business enterprise. Whether you run a large company or small, a division, a district, a field office, or work as a sales person, it is designed for you. If you are in Finance, Healthcare, Information Technology, Consulting, Manufacturing, Politics or Law, to name a few, it will serve as an invaluable guide to help focus your sales initiatives. 

In summary, what will you get from BiltData.ai? You will gain the knowledge and the tools to achieve clarity in how you should market to your core customers. Specifically, you will know how to craft a simple sales and marketing plans that will enable you and your team to act with confidence and get a quantifiable return out of your marketing efforts aimed at the right customers. 

If you pay attention to your customer data, the data will take the mystery out of sales and marketing and let you sell smarter and more efficiently with your precious capital. 

It’s the equivalent of counting cards in Blackjack and doubling your bets when you are dealt a favorable hand. The result: winning at an accelerated rate by concentrating on the outcomes with the highest probabilities of winning. And we all want to win, don’t we? 

In the well-received book Bringing Down the House: The Inside Story of Six M.I.T. Students Who Took Vegas for Millions (the movie “21” starring Kevin Spacey was based upon this book), one of the main characters had just placed a highly successful bet. When asked how the (bleep) he had pulled it off, he replied: 

“It’s not magic; just math. It’s called shuffle tracking. It’s a basic probability-distribution exercise. You can even calculate the percentage of low-card infiltration into the run, caused by a dealer’s shuffle. After that, it’s just a matter of practice. Really good players can track a group of fifteen cards through a six-deck shuffle without breaking a sweat.” 

That’s what BiltData.ai provides: a quantifiable approach using the “right” numbers to reach logical conclusions about your targeted customers.