Commercial Performance Optimization (CPO): small data, big business impact

Mar 07, 2023

sales, marketing and service
data

‘Doing more with less’ – it could very well be the adage of our time. And your commercial organization isn’t exempt: faced with limited resources, your sales, marketing and customer service teams are expected to deliver top-notch customer experiences. Through data-driven insights, Commercial Performance Optimization or CPO helps them focus on what matters, take the right actions, and deliver results fast. Kevin De Beck explains how it works.

Blog series: Getting started with CPO

We live in challenging times: customer expectations are sky-high, while resources – people, time, and money – are often limited. At the same time, there’s so much customer data available that sales, marketing and customer service teams can’t see the forest for the trees. Knowing what to focus on is half the battle. Being able to take decisive actions based on key data is nothing short of a superpower. That’s where Commercial Performance Optimization (CPO) comes in.

In this blog series, our experts take a deep dive into CPO, its main principles, why and how it works, and how you can get started. Keep an eye on our website and our LinkedIn page for regular updates on this exciting topic.

Discover the other blogs in this blog series:

Introduction to CPO: general principles and framework
Taking action: how CPO can help you reach your goals

Focus on what matters

Roughly speaking, your customer-facing departments – sales, marketing, and customer service – have three key objectives:

Attracting the right customers (Get)
Keeping these customers on board (Keep)
Increasing the business value of each customer (Increase)

CPO can help them excel in each of these and deliver tangible results with data-driven insights and actions. For example, by creating personalized offers, promotions, and marketing communications, by identifying which high-value customers you should prioritize, and more.

“In the end, CPO in sales, marketing and service is all about making optimal use of people, technology, time and money for maximum results,” says Kevin. “It ensures that everything you do has impact and brings you closer to achieving your goals – whether that’s increasing sales, creating better customer experiences, or reducing churn.”

CPO in action in sales, marketing and customer service

Sales: Meet with high-potential customers or prospects and deliver the exact pitch they need to hear.
Marketing: Launch your SEA campaigns to exactly the right audience(s).
Customer service: Prioritize service requests from loyal and/or high-value customers and deploy representatives proficient in upselling.

CPO ensures that everything you do has impact and brings you closer to achieving your goals.

Kevin De Beck, Data Science Consultant at delaware

Understanding customer value

But how do you get started with CPO? Despite the fact that there is more data available than ever, many C-level executives fail to answer basic questions like ‘how many customers do we have?’ ‘who is our ideal customer?’, ‘how big is customer churn?’, ‘which customers bring the most value?’, etc.

“To understand customer value, you need to get the basics right first,” says Kevin. “Our advice? Start from simple transactional data. Everyone has it, it’s easy to retrieve, always available, and great for fundamental insights like revenue breakdown, customer value and value-based segmentation (VBS), churn evaluation, customer flux segmentation, etc. People like to overcomplicate things, but you can achieve a lot with fairly simple data, once you put your mind to it.”

People like to overcomplicate things, but even simple transactional data can deliver powerful customer insights.

Kevin De Beck, Data Science Consultant at delaware

Don't forget the bottom

Notice how the ‘marketing funnel’ and the ‘customer insights’ funnel are mirror images. In marketing, you start by casting a wide net to attract customers, but you don’t know much about them yet. But by the time a responder becomes a loyal customer, you have a lot of information about them. These ‘bottom-of-funnel’ insights can tell you a lot about who your ideal customer is and provide unique opportunities for commercial optimization.

“In one manufacturing company, we discovered that 60% of the customer base only generated 3% of total business revenue,” Kevin continues. “Moreover, key accounts turned to be up to 163 times more valuable than ‘normal’ customers. This gives sales and service people a very unambiguous picture of which meetings or requests to prioritize.”

Next up: setting goals and defining KPIs

Of course, CPO only works if you have clearly defined goals and relevant KPIs by which you can measure your progress. That’s what we’ll dive in next, so stay tuned!