The following content is sponsored by Precision Corp and reflects their insights and perspective.
In the fiercely competitive industrial and MRO market, even the most established distributors must adapt. Customers have more choices, price pressures keep mounting, and loyalty is no longer guaranteed.
A leading distributor of metalworking and MRO products recently faced this challenge. They wanted to go beyond their traditional segmentation strategies to uncover new pockets of opportunity. Specifically, they needed to know:
- Which customers are most at risk of leaving?
- Where can we confidently take price without jeopardizing retention?
- How can we align sales strategies to the right customer groups?
That’s where Precision came in.
The Power of Customer Segmentation and Churn Prediction
Precision applied its Customer Segmentation & Churn Prediction Model, combining 100s of behavioral and transactional data variables — inputs like purchase frequency, number of categories purchased, number of sales touches, tenure, and geography — to build meaningful customer clusters.
Next, Precision ran advanced regression analysis and machine learning modeling (including CHAID statistical regression) to identify the biggest drivers of churn and retention across these segments.
What did the distributor learn?
- Some high-price customers were at higher risk of churn, requiring targeted retention strategies.
- Other customer segments showed extremely high retention likelihood, opening the door for strategic price increases.
- Non-manufacturing segments presented untapped retention opportunities with the right approach.
- Key customers needed to be aligned to the right sales coverage based on purchase volume.
- Promising leads were identified for focused acquisition efforts.
The Bottom-Line Impact
The analysis revealed an impressive $130 million total opportunity, including an immediate $13 million in incremental margin gains. By using data-driven insights, the distributor could take confident, targeted actions that improved retention, optimized pricing, and boosted growth.
Unlocking Insights, Driving Growth
At Precision, we help B2B suppliers and distributors harness the power of data to address tough market challenges and capture meaningful growth. Whether you’re navigating industry shifts, rising competition, or margin pressure, our models and tools provide the insights you need to win.
To learn more, visit precisionmarketdata.com or reach out to us at info@precisionmarketdata.com.
