Zilliant 2020 Global B2B Benchmark Report
The latest installment of Zilliant’s Global B2B Benchmark Report was released today and for the first time, it includes a fully interactive component. Users can now tailor the results based on their specific business practices to instantly glean insights from Zilliant’s proprietary diagnostic approach.
Click to access the 2020 Global B2B Interactive Benchmark Report and see how your company stacks up in the five categories of pervasive annual profit and revenue loss for B2B manufacturing, distribution, and service companies!
In addition to this interactivity, the 2020 Benchmark delivers updated global, cross-industry statistics on the amount of revenue and margin that B2B companies lose on an annual basis. This pain is normalized over time as inadequate pricing and sales practices are either unnoticed or addressed with manual means, which fail to comprehensively solve the challenge at hand.
What we’ve discovered is B2B companies inadvertently normalize a significant amount of pain. To wit, the Benchmark Report shows that on average they experience:
- 7.64 – 31.75% annual revenue loss
- 2.65 - 17.10% annual margin loss
For a $1 billion B2B company, the impact of this leakage equates to:
- $76.4 million to $317.5 million in annual lost revenue
- $26.5 million to $171 million in annual lost margin
While valuable and eye-opening in itself, the data collected is really meant to be acted upon. We not only isolate and quantify the five factors that lead to revenue and profit loss, we recommend the tools and strategy for reclaiming that lost opportunity for each category. In our experience, companies that implement data science-driven pricing and sales software recapture an average of 1-3% of margin loss due to sub-par pricing practices and 5-15% of revenue loss due to ineffective sales practices.
The Five Factors
Can you quantify the amount of revenue that is defecting to your competition? Given the complexity within most companies in terms of the proliferation of products and customers to track, sales reps can’t spot when the slow slide of defection begins. Measured at the product category level, churn accounts for customers lost to competitors and decreased sales from current customers, both of which offset net-new business.
Is your sales team made up mostly of order takers, rather than order makers? If so, you’re likely capturing lower-than-expected wallet share based on a customer’s actual spend potential (as compared to ideal customer profiles).
Do you have rules in place for acceptable pricing or an effective approval process for one-off discounting? Or do your sales reps have free rein to cut prices when they perceive this to be the best way to win a deal? The latter leads to a wide variance in pricing practices and prices that are not consistent based on market, product or customer circumstances.
Misaligned Market Pricing
Are you able to set your prices based on the best information, including historical transaction data and relevant market data? When a cost increase hits, can you successfully increase prices to recapture the desired margin? Without robust analytical tools or pricing models, companies are left to cost-plus, rule-of-thumb and other less-than-ideal pricing practices that slash margin.
*NEW* Inefficient Pricing Practices
The 2020 Benchmark Report introduces a fifth category of analysis that quantifies the impact of pricing and sales teams being forced to rely heavily on manual processes and calculations. Time is more valuable than ever, yet manual efforts lead to a lag in price updates when costs change and quote response time that is too long and costly.
Each of these phenomena can be deceptively small when looked at individually. The combined effect of these factors creates significant, pervasive margin and revenue loss annually. While most business leaders instinctually know that their commercial processes could be improved, understanding precisely which processes, how to measure the loss and how to ultimately recapture this value is impossible with manual means.
Manufacturing and Distribution Editions
We’ve produced three separate versions of the Benchmark Report in order to provide both a broad B2B overview and a more specific scope of data relative to manufacturers versus distributors. By using the report with its interactive online companion, you can drill down even further to reveal insights specific to your unique industry vertical.
A Non-Market-Dependent Opportunity
2020 has been a unique year full of unanticipated challenges and market turbulence. However, the value lost due to these five factors remains relatively constant year over year. This means that regardless of externalities – bull market, bear market, pandemic, demand shocks, trade wars – there is tremendous opportunity to grow your business by addressing the sub-par pricing and sales practices that live within your four walls.
To learn more about how to recapture that opportunity, and to examine how these five factors currently impact your specific business performance, access the 2020 Global B2B Interactive Benchmark Report today.