As companies invest in customer relationship management (CRM) and configure-price-quote (CPQ) solutions, big data has become a priority for many organisations as the main vehicle to drive revenue growth. In 2016, we will see changes in the big data industry as more companies use predictive and prescriptive analytics to stand out from their competitors.
2016 - the year of predictive and prescriptive analytics
In 2016, organisations will realise that data can be used far beyond just descriptive analytics of what happened in the past. They will use analytics, aided by data science, to develop prescriptive actions, including what customers are most likely to buy and what prices will win business. Companies will realise the benefits of these analytics and identify actions they can take. These prescriptive actions will set a path to drive meaningful revenue and margin growth, and deliver material and measurable business impact.
CRM and CPQ - 2016’s dynamic duo
For years, CRM has been a functionally-oriented tool, driven by process automation, forecasting and reporting, and designed for sales leaders to keep tabs on their sales teams. It’s been a tool many sales teams despise.
In 2016, CRM will evolve as CPQ adds capabilities that help sales teams drive real revenue and profit growth. By enabling teams to configure offers for customers with data-driven pricing, they can respond quickly with quotes developed in minutes, not weeks or hours. We’ll see a shift from CRM oversight to CRM productivity, resulting in revenue and margin benefits for companies.
We’ll also see CPQ and price optimisation gain more awareness. The new and emerging secret in CPQ is the magic “P” that incorporates data-driven price optimisation. 2016 will be the turning point for smart pricing as CRM and CPQ converge so marketing and sales teams are far better positioned to generate revenue growth.
A challenging year for meeting sales quotas
Forecasts indicate that sales growth will be sluggish in 2016 based on a broad range of global factors: China’s economic slowdown, industry layoffs, depressed oil prices and a low GDP, plus the continued volatility in global currencies, raw materials and global competition. In 2016, companies will deal with a simultaneous barrage of these factors, with dramatic pricing deltas beyond typical expectations. We expect to see the broad population face facts about paying off debts from the 2008 crash, leading to less spending across the economy.
In 2016, procurement organisations will increase their negotiating pressure and hammer teams to lower prices. Organisations that don’t use data-driven predictive and prescriptive analytics to advance sales will find themselves behind more agile competitors. By using CRM systems enabled with CPQ, organisations will be ahead of the pack and winning deals.
Chief revenue officers and chief insight officers - the next big things
Chief revenue officers will take on an expanded leadership role in 2016 as companies realize they need an executive specifically responsible for profitability. This role will incorporate both sales and marketing functions in an organisation, uniting business goals and removing obstacles that are inhibiting the organisation’s ability to drive revenue growth.
In 2016, chief insight officers - as opposed to chief data officers - will emerge as crucial leaders in big data compilation and as drivers of actionable insights that generate meaningful revenue growth, expand and sustain profitability.
Pricing pressure on oil and oil-based derivatives
Companies in the chemicals and transportation industries consistently deal with volatility in managing their businesses. With the 2015 downward spiral in oil and gas, we expect 2016 will be another challenging year. Suppliers should be prepared for continued pressure from customers demanding lower prices when they know input costs have decreased. Suppliers need to understand each customer’s profitability and know where they can lower prices, not margins. Smart suppliers will selectively maintain price points, while keeping customers profitable and competitive with other companies.
The age of scientific pricing is here to stay
In 2015, there was a lot of talk about dynamic pricing, from ride-sharing services, sporting events and even governments using it to manage traffic and parking congestion. In 2016, we expect to see broader adoption of dynamic pricing as companies strive to balance supply and demand better and to get comfortable with the available data and technology needed to adopt this practice. Consumers are also becoming more accepting of companies that use these practices, as long as the bounds of price variability remain reasonable.