Loyalty boost could unlock £28k in sales for drinks suppliers

By James Bayley

Published: 24 October, 2024

Small and mid-sized suppliers in the alcoholic drinks sector could tap into an extra £27,575 in repeat sales by enhancing customer loyalty, according to a recent report. The research, a joint effort by Oxford Brookes Business School and ProspectSoft, part of The Access Group, points to significant revenue potential for manufacturers, wholesalers and distributors. The study indicates that many SMEs are losing out on repeat business from customers who stop buying after their third purchase.

The report analysed 15.8 million sales transactions across over two million business customers during a six-month period, drawing on data from five sectors to estimate the financial impact of missed repeat sales. Among the industries studied, alcoholic drinks suppliers showed the smallest shortfall in potential repeat sales, with an average of £27,575 in ‘missing revenue’. This was notably lower than sectors like health and beauty (£53,098) and construction suppliers (£119,156). On a national scale, the research suggests that UK firms could be overlooking around £66,000 in repeat sales annually.

The study was part of a knowledge transfer partnership (KTP) with ProspectSoft, aiming to uncover growth challenges for UK supply chain businesses. Findings revealed that fostering customer loyalty not only boosts overall revenue but also accelerates sales cycles and improves cash flow. Data showed that customers typically place a second order after 136 days and a third within 65 days, indicating a critical period for businesses to secure loyalty.

Read more: Industry pushes for delay on EPR scheme

Andrew Ardron, founder of ProspectSoft, said that while business-to-business sales grew by 7.6% in the second quarter of this year, firms still face difficult trading conditions, including high costs, and should therefore capitalise on every opportunity. “New customers are always welcome, but it's usually more cost-effective and reliable to drive further sales from existing clients by building trust and loyalty,” he said. “Businesses need to analyse their data to understand where customers are dropping off and then implement strategies to retain them. Our research with Oxford Brookes Business School shows that many firms are not yet fully utilising this data to enhance loyalty and promote growth.”

Methuselah Singh, KTP associate at Oxford Brookes Business School, added that B2B companies may be overly focused on acquiring new customers, sometimes at the cost of nurturing loyalty. “While each business will have a different approach, we can now quantify the benefits of encouraging repeat sales. Developing strategies to shorten the time between purchases could unlock significant growth,” he said.

Insights from the KTP have fed into the creation of the Prospect CRM Growth Engine, a business intelligence dashboard designed to help companies make informed decisions. It includes tools for benchmarking and clustering, assisting firms in identifying opportunities to grow by leveraging existing customers. The full report, Sales Growth Strategies in the B2B Sector, is available online here.

The analysis was based on data from 2,000 CRM users trading with over two million businesses, covering 15.8 million orders. It measured metrics such as Average Interpurchase Time (AIT) and assessed the value of repeat business across different sectors, quantifying the potential for revenue growth.

Printer friendly version