What is CredTech ?
by Rory Traynor
“It is a capital mistake to theorise before one has data.”
Sir Arthur Conan Doyle
To grow your business effectively, you need to take advantage of the world’s most important resource: data. At Red Flag Alert, we help businesses revolutionise their sales and marketing operations by investing in the right intelligence.
In this article we’re going to talk about an incredibly useful source of business intelligence: creditor services data.
What is Creditor Services Data?
Creditor services data can save your business as it provides details on the £4bn of bad debt accrued by British businesses, every year. Specifically, it collects details of every instance where a business is an unsecured creditor in an insolvency procedure – where there are inadequate funds to meet the liabilities.
Every week between 2,500 and 4,000 businesses face the reality of writing off a payment because a client has entered administration – the average debt size is £30,000.
If you’re unlucky enough to be a trade creditor, then the outlook is not good because you’re at the bottom of the pile when it comes to getting your money. Secured and preferential creditors will always be given priority, meaning that trade creditors often see less than 10% of what they are owed. It’s no surprise, therefore, that a business is three times more likely to fail if it is an unsecured trade creditor in an administration.
Red Flag Alert provides the only digitised dataset of creditor administrations and liquidations. This data goes back six years and covers over 900,000 instances. Aside from capturing this important data, Red Flag Alert use this to generate its financial health ratings.
Of course, data is only useful when it’s applied – now we’re going to look at five ways Red Flag Alert data can help B2B sales and marketing teams:
1. Zero in on Your Perfect Customer Avatar
2. Use Sales Triggers
3. Tailor Your Messaging
4. Make Your Sales Presentation Buyer-Focused
5. Onboarding
How Creditor Services Data Can Help Your Business Grow
1. Zero in on Your Perfect Customer Avatar
As part of a customer profiling exercise, creditor services data can help to build your ideal customer avatar. It is particularly useful for businesses that sell products which mitigate the risk of bad debt or help businesses recover from bad debt: insurance, lending products, restricting, leasing or financial services are just a few of the sectors that can benefit significantly from this data.
It’s a huge time saver too, as it means you’re not wasting your time working with clients that aren’t right for the services you’re offering. Simply imagine your ideal client then let the software find you hundreds, even thousands more just like them.
2. Use Sales Triggers
Creditor services data is a highly relevant sales trigger. We define a sales trigger as a piece of new information that opens up an opportunity to sell. Red Flag Alert covers 6.5 million businesses, and there are 100,000 updates every day, including CCJs, profit warnings, new directors and expansion. These triggers are fed straight into our users’ inboxes, so sales teams can use the information as a conversation starter.
Creditor services data is a prime piece of information to open up a conversation with prospects. Knowing that a business has recently received news of a bad debt gives the sales team a reason to start the conversation. Of course, you need to approach the conversation with care, but if you listen and show empathy, you have a real chance of making a genuine business connection.
A great example of this in action would be an invoice financing business approaching companies that have suffered a loss with a solution designed to mitigate future risk.
3. Tailor Your Messaging
With up to 4,000 incidents of unsecured trade creditors experiencing bad debt every week there are inevitably a wide range of situations. A highly sophisticated approach would be to tailor your messaging to each of these businesses depending on their individual circumstances. Messaging can be through a range of channels: calls, emails, LinkedIn, other social media or tailored sales collateral.
For example, you could segment prospects that have experienced an unsecured loss by sector. You can then tailor the marketing material to that industry, showing your relevance and understanding of their market.
Working in this way will help to focus your sales team on the best prospects at the best possible time, making them more efficient and greatly improving conversion rates.
4. Make Your Sales Presentation Buyer-Focused
There are a number of different ways that creditor services data can help you create a sales presentation tailored to your customer:
1. Background Research: Know the level of unsecured loss a prospect has faced.
2. Deeper Analysis: Place that loss in context of the financial circumstances of the business.
3. Meeting Preparation: Attend meetings armed with relevant products and solutions.
4. Follow-Up: Because you were able to focus on problems, the follow-up and deal closing can be fast and efficient.
If a salesperson can clearly understand the risk profile of a business before the meeting, they’re able to prepare different solutions. A business that has a large number of assets with small and infrequent bad debts will be offered a very different product or service to a business in a risky sector that has few assets and bad debt from one large client. By making the sales presentation buyer-focused and offering relevant solutions, the presentations will likely be more productive.
5. Onboarding
Onboarding lots of new customers is challenging. You need to make a high number of decisions on their credit risk and carry out a large volume of credit reviews.
At the heart of Red Flag Alert is a financial health rating for every business in the UK – there are seven ratings that accurately predict the risk of business failure in the next twelve months.
It can be used as a critical starting point in determining credit decisions and terms. Because the information is up to date and calculated using a detailed proprietary risk algorithm, you can be confident it is the most specific and current score available. These ratings include vital creditor services information – ensuring your onboarding process considers emerging financial risk.
Knowing which clients have a poorer health rating also helps you tailor your services accordingly to protect your business from any financial risk.
Choose Red Flag Alert
Thousands of UK businesses trust Red Flag Alert to help them deliver on ambitious targets. With detailed, real-time information on 6.5 million UK businesses, you’ll have the edge on your competition.
You can segment your targets like never before, and then tailor your marketing and sales approach accordingly. Plus up-to-date contact details of over 20 million key decision-makers mean you’ll be speaking to the right person from the start.
Once you’re through the door you have the power of information to plan and prepare sales presentations that blow away your competition by providing insight that is tailored to your prospect.
Our information is updated in real time. Over 100,000 daily changes are spotted and delivered to your inbox before your competitors even know they have happened.
Red Flag Alert understand B2B sales and how to use data as a critical competitive advantage. Click here to start a free trial and supercharge your business today!
