High market volatility makes it difficult to predict future sales trends, and that complicates the forecasting process. This can lead to either stock shortages or surpluses, both of which can be costly for manufacturers and distributors. In this article, Patrick Dougherty, Product Marketing Manager at Vendavo, explores how to optimize sales strategies in the face of market volatility, and how AI-powered cross-sell recommendations can build a foundation for sales excellence.
These days, market volatility is more than a buzzword. It’s the crucible in which sales organizations are tested. Navigating this rocky terrain requires more than just business acumen for best-in-class manufacturers and distributors. It demands focused innovation.
As we enter the era of artificial intelligence (AI), we must understand what new technologies are capable of to better capitalize on their possibilities. AI-powered cross-sell recommendations are an emerging technology receiving increasing attention, and they aren’t just another arrow in Sales leadership’s quiver. They’re transformative strategies, and can redefine sales horizons, magnify deal values, and turbocharge team performance.
Let’s take a look at how these recommendations can build a foundation for sales excellence.
1. Navigate Volatility with VSO
High market volatility makes it difficult to predict future sales trends, which complicates the forecasting process. This can lead to either stock shortages or surpluses, both of which can be costly.
The same conditions may affect customer purchasing power and behavior. Consumers may be more likely to reduce spending in an economic downturn, for example, which impacts sales projections.
Here are a few things to keep in mind for manufacturers and distributors:
- Market volatility can lead to fluctuations in commodity prices, availability of raw materials, or disruptions in supply chains.
- This can affect the cost of goods sold and lead to challenges in fulfilling orders.
Companies may need to pivot their strategic planning to adapt to changing market conditions.
- This could involve shifting into new markets, developing new products, or changing sales tactics.
A targeted cross and upsell strategy can help Sales leaders respond to market changes with more flexibility. If one product becomes less viable due to external conditions, for example, sales efforts can focus on other, more profitable or in-demand offerings.
Cross-selling can also mitigate risk by spreading it across a broader portfolio of products or services. If demand for one product decreases, sales from another product other customers are buying may compensate.
2. Expand Market Share and Revenue Growth
Many companies overlook a valuable resource they already have a large supply of: their own data. By using their own historical transaction data, Sales teams can leverage a tool like Vendavo Sales Optimizer and the powerful analysis AI provides to identify numerous cross-sell opportunities that would otherwise take a team of data scientists to uncover.
Here’s an example: TruckPro, a U.S. distribution company with a lot of customers and a large catalog of products, uses AI to:
- Comb through their historical transaction
- Identify similar customers,
- Provide targeted cross-sell recommendations directly in their Salesforce CRM
This gives their sales team more time to propose products relevant products to existing customers, dramatically expanding their Sales team’s reach.
3. Achieve Sales Targets and Business Growth
Customers who purchase multiple products or services from a company are more likely to remain loyal, as the diversity and integration of offerings can increase switching costs. This can also improve customer satisfaction as the personalized recommendations give customers a feeling of understanding between themselves and the Sales rep, leading to more predictable revenue.
4. Venture into New Product Lines and Markets
Companies can make more strategic decisions about which products to promote by leveraging customer data to make informed cross-sell recommendations. This helps in aligning sales strategies with consumer needs and market demand, even when these factors are in flux.
Once a mature cross-sell system is in place, sales data can demonstrate demand patterns for more comprehensive solutions (rather than isolated products). This can lead to recognizing untapped markets where bundled products or services could be successful.
Similarly, a cross-sell solution like Sales Optimizer can be used to promote new products to customers who bought related products, providing an instant lift to a new product or service that might be competing for visibility.
5. Enhance Sales Team Productivity and Effectiveness
A cross-sell solution contributes many benefits to the commercial side of a business, but an effective cross-sell strategy also makes it easier for Sales teams to hit their numbers and achieve quota. Here are a few quick facts:
- A solution like Sales Optimizer saves individual reps an enormous amount of time analyzing existing accounts for opportunities.
- It streamlines the sales process, giving reps a ready-made list of accounts to target with specific recommendations directly in their Sales tools.
- These recommendations are integrated into an existing CRM or CPQ.
- This also speeds onboarding of new Sales reps, giving them visibility into historically successful sales plays.
- It also gives reps a shortcut to product knowledge usually only developed through experience selling a particular company’s catalog.
With Vendavo Sales Optimizer, sales team enhance the AI’s capabilities through their expertise by either endorsing or dismissing its product suggestions and providing feedback on the recommendations’ quality. This feedback loop is unique to Sales Optimizer. It combines the power of AI with the experience of sellers to give additional insights to Product and Pricing departments while ensuring more trust in the recommendations from the Sales team.
Customer Success Story: A Quick Spotlight on TruckPro
For heavy-duty truck parts distributor TruckPro, using AI to identify cross-sell recommendations led to 6,000 new opportunities in the first six months of use and an 85% adoption of Sales Optimizer in the field. The project paid for itself in just four months and improved the sales team’s effectiveness while giving TruckPro more agility to react to market disruptions.
Why Cross-Sell Recommendations Matter
Cross-sell recommendations offer manufacturers the strategic advantage of deepening their relationships with existing customers, which is essential in industries that face long sales cycles and high customer acquisition costs. For manufacturers, leveraging data-driven cross-sell opportunities means they can increase the value of each sale, enhance customer retention, and provide a broader suite of solutions to meet customer needs.
Distributors, on the other hand, benefit from cross-sell recommendations by maximizing their sales operations’ efficiency. AI and analytics mean they can better understand customer purchase patterns and inventory data. This enables them to proactively offer products that align with customers’ anticipated needs, increasing the average order value and customer lifetime value, boosting revenue without proportionally increasing the cost of sales, and contributing to stronger customer loyalty as distributors become trusted advisors who understand and anticipate their customers’ business needs.
Embracing AI-powered cross-sell recommendations is not just innovative as business leaders navigate an ever-shifting commercial landscape, but imperative. You must leverage and understand artificial intelligence so your business can harness deep insights from your data, uncover opportunities that might otherwise remain hidden, and ensure your sales strategies are as targeted and efficient as possible.
Incorporating AI into your sales arsenal can be the key to elevating your customer relationships, boosting your bottom line, and solidifying your position in the marketplace.
The time to harness the transformative potential of AI-powered cross-selling is now. Let it propel your business forward into a more profitable and data-driven era.
If you’d like to learn more about how VSO can help your organization, request a demo today.