Estimating growth potential with indirect market channels in B2B

Complex market structures and fierce competition creates the need for an informed decision making process. We improve go-to market decision by backing current knowledge with market research. In the example below, we illustrate how we helped a large B2B supplier in really understanding how they are performing when working with indirect sales channels. What is the actual growth potential across distributors, dealers and end users and what should we improve to effectively capitalize on the growth potential?

Our client sought organic growth through its many types of customers. Among two main segments of customers, distributors and end users, only the distributors had a direct link to our client. So knowledge was needed, about the performance at the end user.

Improve everywhere

While the growth goal was clear, the path was not. Trying to improve and grow every type of account would be an endless pursue and quickly drain resources, with little or no effect. ag analytics was called in to analyze the market, get priorities straight and point out the most important areas of improvement.

Data Driven Decision making

Our approach was to survey the complete potential market of our client. Combining financial data on each account with surveys from potential clients and publicly available financial data, we gained an overview:

  • Penetration rate. Among each segment, how well are we represented?
  • Share of Wallet. How much of their budget do our customers spend at us?
  • If both of the above metrics were raised to realistic thresholds, how much potential does each segment then contain?

The following results were achieved:

Potential Share of Wallet Gross profit

Improving go to market decisions

With the table above, we were able to pinpoint the customers with the largest potential. The top 100 customers were actually the place with the highest penetration rate of 47%, and while this would be unrealistic to improve, their Share of Wallet was low compared to other segments. By focusing on existing relations with the biggest customers, we estimated an unrealized potential of 2.16m EUR. The next step was to test, design and implement a winning Value Proposition for this segment. In relation to this, we conducted workshops, depth interviews and further quantitative analysis to find the relevant priorities for these customers.

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