Customer revenue margin

By Peter Rojas, Solution Management, SAP

According to Aberdeen’s report by Peter Ostrow, 52 percent of best-in-class sales organizations actively analyze or segment their customer base in order to identify cross-sell opportunities. But how can companies achieve this with extreme data volumes that have hundreds of thousands of customer interactions every week from multiple systems, resulting in millions of orders and billions of line items? And how can they deliver these recommendations to the field for sales execution?

Large business-to-business companies wrestle with many sales intelligence challenges related to data, including difficulty:

  • Integrating internal and external customer data, which data is often stale and not real time
  • Monitoring customer relationships and visualizing how the relationships evolved over time
  • Classifying customers by cost to serve, profitability, and revenue in order to target relevant offers and profitable customer care strategies
  • Allocating expensive sales and service resources to the right customers to meet revenue and margin objectives
  • Harnessing customer intelligence in context of a selling situation

So, how can advances in big data computing enable real-time customer relationship monitoring and differentiated customer care treatments that increase revenue and profitability? By integrating ERP, CRM, social data in real time, so sales, marketing, and service personnel can understand customer lifetime value and identify hidden opportunities to increase wallet share.

Multiple vendors offer sales analytic applications, but few business-to-business solutions focus on identifying cross-sell and upsell opportunities in real time and leveraging the rich data in ERP and CRM applications. SAP does.

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Popular Q&A

What is the formula for profit margin?

Selling Price=Cost Price/((100-margin%)/100)
Cost = £100
Profit Margin needed is 40%
Sell price=100/0.60
Sell Price = £166.67
So you make £66.67 when you sell it at £166.67 so the profit margin is
66.67/166.67 = 40%

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