The International Monetary Fund (IMF) recently forecast that growth of the global economy will slow to 3.2% this year, down from 6.1% in 2021, and to an even lower 2.9% in 2023[i]. This can be attributed to lasting effects of the pandemic, fallouts from the Ukraine-Russian conflict, skyrocketing inflation, and rising food and energy prices.
These macro-economic factors are impacting businesses locally resulting in volatile and unpredictable customer behaviour, particularly in the B2B space. To remain ahead of the curve, it is crucial for businesses to adopt technological solutions which can provide them with the crystal ball they may need to ensure customer retention, especially in an economic downturn.
This is according to Zane Van Rooyen, Product Marketing Manager at Skynamo who says that technology can provide valuable insights into purchasing fluctuations and buying behaviour to predict how customers will act in the future. “This can be done through recency, frequency and monetary (RFM) analysis which can help businesses not only identify behaviour shifts but arm them with information to act swiftly to prevent customer losses. In today’s cutthroat business environment, this could mean the difference between keeping and losing customers.”
Fortune favours the prepared
Van Rooyen explains that recency refers to how recently a customer has made a purchase, frequency is how often they do so and monetary looks at how much money a customer spends. “Instead of managers wasting time weeding through customer data and invoices to perform this analysis and then responding retrospectively to customer change, technology can be applied to pulling metrics such as which customers need attention, whose orders have started getting smaller over time, and which regulars have not ordered recently, among others. “
The future is bright when it’s informed by data
“This information enables companies to target specific clusters of customers with actions that are relevant to their particular behaviour and add value – thereby generating much higher rates of response while also helping to build and maintain a loyal customer base and preventing customer churn,” shares Van Rooyen. “For instance, increased in-person communication could be implemented amongst those that need to be retained or won back to better understand their needs, while those customers that buy often and in big amounts could be approached for additional sales opportunities.”
Clarity is key to minimise looming surprises
He points out that, since RFM analysis gives companies a bird’s eye view of customer purchases, it can also help with more accurate monitoring and management of stock levels. “From this data, they can see when a popular product has stopped selling, identify seasonal influences, and pick up sales trends. This equips businesses with the ability to proactively prepare for order fluctuations based on historical trends as well as avoid overstocking customers.”
Predicting the team’s needs to help them find future success
“Additionally, RFM analysis can help companies keep an eye on both sales team targets as well as individual rep performance,” adds van Rooyen. “By having access to this information, managers can see exactly where team members need to be spending their time and encourage them to take action sooner to ensure that targets are met. Those reps who aren’t performing well based on these targets can be easily identified for coaching and mentoring.”
To assist businesses in South Africa in utilising technology to ensure future success, Skynamo has recently launched a new product, Radar, which performs RFM analysis on existing customer data to deliver actionable insights and is a first for field sales automation.
“The current business landscape is very time sensitive, and companies don’t have the luxury of getting caught in the weeds. They need to have powerful information at their fingertips to make the decisions that are critical to their continued survival and now technology is available to help them do this,” van Rooyen concludes.
[i] https://blogs.imf.org/2022/07/26/global-economic-growth-slows-amid-gloomy-and-more-uncertain-outlook/