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Why data transformation is critical for logistics companies right now

‘Christmas is cancelled’ screamed the front page of one red top recently. Another: ‘Empty shelves as UK set to starve’ and another: ‘UKL’s cheapest supermarket blames fuel crisis for being unable to expand’.

Clearly there are supply chain issues and currently demand in the losisticws sector is by far outstripping supply. But this won’t last and equilibrium will eventually be restored. In response, savvy operators will have one eye on the future and be thinking about how best to achieve growth once the economy changes.

The key lies in segmentation and in understanding customers and the possible opportunities that exist from their behaviour.

It is a well-known fact that customer acquisition costs more than retention, so keeping existing customers loyal and unpicking the upsell and cross sell potential means that growth of the bottom line can be achieved more efficiently.

Historically business to business organisations have lagged behind their consumer cousins when it comes to data strategy. This is because it is more difficult to collect B2B data and third party data is often poorer in quality to commercially available consumer data, consequently profiling can be tricky. It was therefore easier to just not go down that road. But things are changing.

A study by McKinsey reveals that insight driven businesses achieve 30 per cent higher growth than those that do not. Another report shows that effective use of data increases profits by eight per cent. These compelling statistics are hard to ignore and as a result we are seeing increasing numbers of B2B organisations, such as logistics organisations, invest in data transformation.

In these demand driven times focusing only on the here and now is folly. Whilst organisations are awash with customers it is tempting to simply take the money. But arguably, now is the most important time to identify the most high value and high potential customers and establish customer profiles. This has a number of benefits.

Firstly, organisations can establish good will by offering the best prices to the customers that they want to retain. A strategy established on first come, first served won’t work in the long term. Instead focusing on the value of the customers to the business, including cost to serve and lifetime value, will make it possible to model what the future could look like.

Establishing headroom to spend in certain product categories, identifying which customers have the capacity to buy more – often a blind spot for many competitors – and also the opportunity for growth by taking share of wallet from competitors, are all effective ways of determining customer value.

Importantly, having such a laser focus on customers will also mean that once the market has settled down again, it will be possible to enrich the customer base and concentrate on retaining the customers with the highest value to the business.

Data transformation is not easy, but the dividends it will pay in the long term are undeniable. It is unsurprising, therefore that big data, analytics and data science are rising up the agenda and increasingly becoming a business priority.

William Beresford
William Beresford is co-founder and Partner Propositions at for Beyond, Putting Data to Work Ltd comprising Beyond Analysis and Beyond AML, leading data solutions and customer insight businesses


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