Following last fall’s merger of Strategic Pricing Associates (SPA) and Jigsaw into new entity SPARXiQ, executive Gregory Smith discusses how SPARXiQ’s data analytics tools can transform a distributorship’s profitability and growth trajectory.
In October 2019, Strategic Pricing Associates (SPA) and Jigsaw Systems announced SPA’s acquisition of Jigsaw. The new entity, based in Cleveland, Ohio, and now known as SPARXiQ, is a leader in business analytics and sales training and offers expertise in unified strategic pricing, strategic costing, point of sale (POS), inventory management, sales enablement, and sales training solutions and platforms to the B2B industrial market.
Below, tED magazine reached out to Gregory Smith, vice president of Strategic Accounts & Partnerships at SPARXiQ, for details on how the company is strategically positioned to support its clients and their data needs to ensure “intelligent sales and profit acceleration.”
tED magazine: What does the acquisition of Jigsaw mean for all of the data that everyone is collecting?
Smith: It means that, collectively, we have more solutions available to assist our manufacturing and distribution clients in enhancing their profitability while also providing workflow tools that ensure accuracy and reduce processing time. The amalgamation of our two companies ensures our client’s success.
tED magazine: How will SPARXiQ help customers ensure that all of that data leads to continued success?
Smith: The first opportunity that immediately leaps out is our ability to gather more information and make better use of it. The volume of data being produced by and propelling distribution is massive – a true gold mine! – and we can use data science and statistical techniques to unearth this treasure. Additionally, data insights will lead to sales process changes and the use of Machine Learning/AI. It’s a new world full of both opportunities and challenges, and one challenge that can be transformed into an opportunity is that of maintaining profitability. As we embark on this transformational new industrial revolution, margin pressure will only get worse, so it’s about using your data to not just maintain sales and margin but to grow them.
tED magazine: How will SPARXiQ help customers manage/get the most out of the information they have?
Smith: SPARXiQ analytics tools identify trends and opportunities in clients’ data. Two examples of these tools include ‘prescriptive analytics’ and ‘predictive analytics’:
- Prescriptive Analytics, a subset of business analytics, is dedicated to ascertaining the best approach for a situation and represents a combination of predictive analytics (what will happen) and descriptive analytics (what’s already happened and why). One problem many sales organizations experience is an inability to “see” profitability as opposed to revenue; amazingly, even some of the best salespeople are hard-pressed to identify their most profitable customers. We use a tool called the ‘Whale Curve’ that can be applied prescriptively to rank profitability; its report visually shows the accounts where profit margins are healthy, accounts where you’re breaking even, and – importantly – accounts where the cost-to-serve ratio is so expensive that you lose profit.
- Predictive Analytics is the analysis of present data to forecast the future and identify risks or otherwise unknowable events. By using data mining and statistics tools, businesses can create predictive intelligence by uncovering patterns and relationships in structured and unstructured data, which can be a true game-changer for sales teams. Through modeling or profiling, analytics can be used to score prospects based on their profitability and likelihood to buy and also provide insights on the products to lead with. By uncovering product mix gaps and providing the sales rep with an excuse for a client checkup call, analytics can support upselling as well. Moreover, growth indicators incorporated in the modeling help reps direct their attention to the highest-potential clients. On the preventative side, predictive analytics can also help spot downward sales trends, giving reps a chance to mitigate the risk of the client defecting.
tED magazine: How will SPARXiQ help support customers in the areas of price optimization and sales skills?
Smith: Pricing can be complicated for distributors of all sizes. Price optimization is the process of finding the best possible price for every product and customer combination, which leads to millions of possible pricing permutations for most distributors. Many distributors make the mistake of applying the same margin to their entire product line, adding an equal premium to every size client, or letting sales reps simply add 20%. Analytics can help diagnose pricing issues and build pricing structures based on customer size, segment, purchasing behaviors, and cost-to-serve measures. Overall, these tools aggregate and analyze pricing and cost data from both internal sources and those of your competitors and derive optimized price variants.\
Advanced price optimization solutions can increase your profit quickly and efficiently and it’s amazing to see the gains companies achieve once they use such analytics to determine their pricing; I’ve seen many $100 million companies gain $6 million over 90 days after using our strategic pricing methods. Enterprise value also rises, averaging around two basis points (bps). Multiply your current EBIT by seven for your possible enterprise value; now add two bps to your current EBIT and multiply by seven. Which number would you like to get paid on? In today’s highly-competitive market with rapidly-changing customer needs, price optimization has become a must-have.
Once companies have the wherewithal to be prescriptive with their data and they’ve given their sales reps actionable information, it’s time to ensure that their selling skills are top-notch, and that requires training. Today’s multi-generational teams often require tune-ups in communication, relationship-building, and negotiation, not to mention the ability to advocate the value of their products. Despite all of the new technology being introduced into distribution, there’s still a human component, and those humans require skills investment. SPARXiQ offers a range of proven sales training opportunities to boost skills and success.
tED magazine: What final message can you share with NAED members in terms of how the recent merger of SPA and Jigsaw and the introduction of new entity SPARXiQ will affect their data going forward?
Smith: Data utilization is the competitive edge for distribution. The question everyone needs to answer is simply this – what strategy are you utilizing with your data to enhance profitability, grow sales, and improve sales performance?
Tagged with data, SPARXiQ