Data4Growth: Applying Data Science to your Business.
Many SMEs are missing significant gross profit and revenue opportunities by neglecting the potential that data science practices present their business.
Data science in business has typically been the realm of large corporates because they have had the systems and resources that allowed them to collect business-based data. However, for more than a decade now businesses of all sizes have adopted systems that have us drowning in data - "data is like dirt, it's everywhere". Typical sources of data available to businesses today include; Accounting software, E-commerce websites, ERP systems, Manufacturing equipment, Social media platforms, External databases.
Using data for business intelligence becomes the challenge and this is where our team of business consultants and data scientists come in.
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Data Science Consulting
Our data science consulting resources consist of the technical data science capabilities and experienced business consultants. This combination ensures our advice to clients remains practical, realistic and easily understood. We talk plain business English as we translate the data insights and business intelligence to actionable business strategies and tools that are designed to inform business decision making and direct strategy.
Our data science consulting services are designed to help you extract meaningful insights from your data, so you can make informed decisions that drive your business forward. Our data science consulting services are implemented to inform budgeting and forecasting, mitigate risk, provide marketing and sales direction and streamline manufacturing.
What is Data Science in Business?
Our data science services can be applied to a variety of applications however our main focus is helping businesses identify and capture missed gross profit or revenue opportunities from their existing client cohort. By cleaning and organising your data we are able to apply a variety of predictive modelling or machine learning tools that allow us to test and model different business scenarios. Because the insights this generates are based on a "deep dive" into your data the business impact of the scenarios is "fact" based - not the educated guesswork that traditional data analysis drives.
Because the focus of the work is on your existing clients this also means that there is typically little to no additional investment required to capture the gains in gross profit. It all just flows directly to the bottom line.
Business Impact
Our data science services in Melbourne produce a strategic roadmap for significant additional gross profit. We invest heavily (up to 20 hours of data scientists time) up front to ensure that we can deliver and appropriate return on investment for our clients. We simply will not formerly engage with a client unless we can guarantee a minimum 20% increase in gross profit or a 10 times ROI for the fees we charge.
Everything we do in this space is covered by a non-disclosure agreement and the initial consulting and analysis is our investment to earn the right to engage with you. As such our data science services are risk free.
Business Challenge
The challenge for most businesses that we engage with is not identifying the additional profit opportunities - we do that for you. The challenge becomes the execution of strategies that see you realise the bottom-line growth you are after. Our process includes the development of a detailed plan specific to each of the strategies that will drive the profit growth. It itemises the resources, timing and other elements required to realise the gains identified.
From that point our clients have three execution options:
1. Take the plan and execute it themselves.
2. Engage us to assist in the execution management (fee for service).
3. Engage us as a partner in the process (combination of fee for service and performance based remuneration).
We prefer option 3 but we remain available and connected to the process whichever execution path our clients take. We are uniquely positioned to support the implementation of change initiatives via specific recruitment, training or human resource-based projects and it is consistent with the partnership model that is part of our DNA.
Data Science Case Studies
Not many things in this world are guaranteed but that is the approach we apply to our data science consulting. We will not engage with clients unless we can guarantee a 20% increase in gross profit or a 10 times ROI on our fees. The following are a range of case studies from businesses who have engaged Options Consulting Group to apply our data science expertise to their business.
Craft Brewery Based in Melbourne
The Business.
- Craft Brewery operating for more than 5 years.
- National distribution.
- Core and supplementary brand portfolio.
- On premise, off premise and ecommerce channels.
Data Insights
- The business was unaware that the secondary brand performance was outperforming the core brand (profit contribution).
- Aggressive discounting was not translating to sales performance increases and hence was eroding GP.
- The sales team were spending too much time fulfilling orders rather than creating new business opportunities.
- Extremely low stock penetration rates for 85% of customers was making them reliant on a small percentage of clients and exposed them to the competition.
Commercial Plan
- Developed plans down to customer level to sell in more SKU’s.
- Introduced more compliance into discounting to ensure there was a definite payback at customer level.
- Realigned the sales team responsibilities.
- Created a “win back “plan down to customer level to claw back lapsed customers.
Modelled Outcomes
- A number of separately defined initiatives were identified as being able to provide the business with immediate revenue opportunities.
- Collectively these have the potential to improve the GP of the business by 230%.
- The business will generate immediate cash flow benefits and give it a clear road map to build growth in a very defined way.
FMCG Business
The Business.
- Established national manufacturer and distributor of a range of juice's and smoothie drink products
- Stalled sales growth despite the introduction of new SKU's and direct distribution.
- Lack of marketing funds to support brand awareness and promotional programmes
- Required upward sales trajectory to attract the investment needed.
Data Insights.
- Stock sell through rates varied considerably between store locations
- New higher GP smoothie had better sell through rates in inner city and CBD postcodes
- "Veg" SKU performed best in middle income store locations.
Commercial Plan.
- Route trade direct delivery timings were prioritized by sell through rates / value to minimize out of stocks
- Stocking of the smoothie SKU was concentrated into inner city locations
- “Veg” SKU was concentrated into middle income store locations and withdrawn from slow sell through rate locations.
Modelled Outcomes
- A more targeted inventory plan could produce a sales up lift of 20% - achieved
- With a higher mix of the more profitable SKU a 28% up lift in GP was realised.
- Additional GP provided some funding for initial marketing.
- Kick started an upward sales trend for capital raising.
National Manufacturer
The Business
- National manufacturer of cleaning and hygiene products
- Inconsistent sales performance from year to year.
- Had kept pricing constant to try to minimize customer losses
- Questioned whether their direct route to market was appropriate.
Data Insights
- Gross profit decline from price freezes were not offset by better customer retention or acquisition rates
- Business was overly reliant on selling to one industry vertical
- While overall gross profit was still acceptable a larger proportion of customers had “crept “into the lower unprofitable bracket.
- 60% of customers were being afforded excessive discounts versus the trading terms
- 50% of customers were in a spend decline in the last 6 months.
- Business was reliant on too few SKU’S (50% sales from 4% of the SKU’s)
- New account wins were outnumbered by account losses.
Commercial Plan
- Re engaged with recently non active and spend declining customers to head off churn.
- Set up a ‘win back program’ targeted at lost profitable customers.
- Developed a solution selling program to increase product category penetration to existing customers.
- Created a business development plan to increase penetration into low penetrating industry verticals
- Realigned customer discounts to trading terms on a staggered basis.
Modelled Outcomes
Taking a conservative, planned approach, built within the commercial plan of the business by
- Reducing monthly customer churn
- Winning back profitable lost customers
- Increasing product category penetration from existing customers
- Acquiring new customers from low performing industry verticals
- Clawing back excessive discounts
We modelled the business would increase its sales by 29% in the next fiscal year - Results achieved.
Options Consulting Group are passionate about helping businesses unlock their full potential. Our team will work closely with you to understand your unique business needs and develop a tailored plan that delivers exceptional results. Contact us today to learn more about how we can help your business grow.
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