Revenue growth is the oxygen of all commercial enterprises. Data and analytics can be a powerful ally in a journey towards sustainable growth and a reliable co-pilot to realizing your business objectives. A simple way to classify the different use cases for using analytics to help drive growth is to divide them into two categories:
- Analytics to help understand and manage the growth equation – A wide range of factors impact revenue growth both positively and negatively. In today’s rapidly changing environment, it is important to be able to quickly identify changes in the growth trajectory along with root causes to address challenges and opportunities in a timely manner. This requires a clear set of measures and dimensions across multiple domains of expertise along with a diagnostic algorithm to extract insights that guide decision making.
- Analytics to transform sales and the customer experience – Solutions may be embedded in customer journeys and sales processes to significantly enhance the customer experience, increase sales and optimize pricing as well as using your data to learn how to better serve them.
Managing the growth equation with integrated analytics for fast analysis
Growth analytics is an “n” dimensional problem involving a wide range of metrics. Business leaders can approach this problem with a simple framework listing the domains of information, key questions / issues along with metrics impacting growth and gradually build analytics capabilities for each domain. The goal should be to create a single application integrating information from multiple source systems to truly understand the sales trajectory across the enterprise along with the impact of underlying drivers. Having business units and functions across domains sets the stage for a connected, comprehensive view of the enterprise.
Financial systems provide key information for revenue analysis including:
- Revenue by business unit
- Revenue by type, for example: net interest income, non-interest revenue
- Revenue growth
- Loans: balances and spreads
- Deposits: balances and spreads
- Assets under management and administration
Sales systems are central to growth analytics and provide insights on:
- Unit sales and $ sales by:
- Business unit
- Product & service
- Sales opportunity pipeline
The customer master file along with related systems provide insights on:
- Number of customers, customer growth / attrition, Net promoter score, by:
- Business unit
The product systems provide insights on:
- Number of products, product revenue, margins (spreads), number of accounts, account balances, by:
- Product type › product
- Business unit
The channels systems are often overlooked but can provide deep insights into growth drivers.
- Number of channel instances, capabilities and cost, by:
- Channel type – e.g. Digital, branch, call center, ATM, sales force
- Business unit
- Transaction mix and channel efficiency ($ / transaction, $ / call), by:
- Transaction type
- Customer segment
- Customer journey
Marketing systems provide insights into the following:
- Brand profile – Ours, competitors
- Marketing spend – Working, non-working
- Media share, share of voice, social media metrics
- Advertising, promotions, marketing assets & related costs
Risk systems provide insights into the level of risk taken and the associated rewards including:
- Credit risk – Loans & acceptances, allowance for credit losses, provision for credit losses, write-offs
- Market risk – Value at risk (VaR), losses, options (Delta, Vega)
Competitor information can be obtained from publicly available sources and analysis conducted by strategy teams. Key information includes:
- Financials – income statement, growth, profitability, balance sheet, credit quality, assets under management
- Capabilities – branch network, digital
Macro-economic activity impacts growth. Key measure types include:
- GDP, interest rates, inflation, consumer, and housing
Financial markets performance can partially explain variance in growth:
- Market indices, equities, commodities, exchange rates
Integrating information for insights
Each of the above domains provides insights on its own. Integrating information from across these domains into a single application enables the c-suite to gain a deeper understanding of the current landscape to develop an appropriate action plan to address opportunities and challenges based on data.
Transforming sales and the customer experience
Data and analytics capabilities are at the core of industry leading customer journeys and sales processes. Improvement opportunities abound and we are just at the beginning of profound changes in these areas. Areas of refinement enabled by analytics include:
Generate high quality sales leads.
- Based on market / customer / product analysis
- Next best offer for clients interacting with us (both digital and sales channels)
Optimize pricing based on customer / product / bundles and other variables
Account Open and Product Configuration
Help clients open an account and configure the right bundle of products for their needs.
Use bots, voice analysis and machine learning to improve customer service (e.g. digital channel and call centers).
In summary, data and analytics is a powerful capability to help all enterprises grow and manage the enterprise. Key factors for success include: business executive sponsorship, a framework to align analytics with business priorities, a phased implementation approach, and a target state where information is integrated across domains of expertise.
If you have any questions about this recommended approach and how CHORAL can help you implement integrated analytics for growth, contact us today!