Any successful company has its clients or customers at the core. Gone are the days of one-size-fits-all marketing and competition based mainly on price. These days if you want to get, and maintain your clients or customers, you need to interact with them and build relationships on a one-to-one basis.
But just that isn’t enough. As a successful modern enterprise, you’ll need data-driven insights to understand your customers’ needs in this ever-evolving world, that will enable you to proactively evolve your products accordingly. Many of the new mega-successful and ‘disruptive’ businesses – like Uber and Airbnb – use data and its analysis as the foundation of their entire business model. Against this backdrop, you wouldn’t want to risk losing out to more data-savvy competitors or one of the many new data-focused start-ups.
So let’s see how data analytics is a key tool in putting customers first.
So why is it so important for companies to be data-centric?
When it comes to measuring the success of a company, the first things to look at are its customer base, bottom-line results or sales figures. These all are important indicators of growth but the picture they convey is far from complete. These figures don’t really explain exactly who is buying your products nor when and why you gain or lose customers. They don’t show you how much loyalty there is in your market or tell you what you need to do to stay competitive in the future. Then what to do to find out about all this?
This is where Data Analytics shines through. The insights it provides, helps businesses to cater directly to their customers with confidence, optimize their resources as well as innovate flexibly in-line with evolving market trends. Data experts Gordon Linoff and Michael Berry have explained this in the best way in their book, Data Mining Techniques, “forward-looking companies are moving toward the goal of understanding each customer individually and using that understanding to make it easier (and more profitable) for the customer to do business with them rather than with competitors.”
How can Data Analytics transform your business strategy?
In short, data analysis can help you restructure your company’s interactions with customers, market more effectively and ultimately, drive more sales.
- By enabling segmentation: In Data Analytics, ‘Segmentation’ involves dividing up customer data according to age group, geography, shopping habits or product usage and grouping similar data together. This data can come in handy to create messaging that resonates with each segment individually. Whether it is people living in a particular area, belonging to a demographic group or having an interest in a specific hobby or activity, you can adapt your marketing to attract directly to their individual needs and interests. Segmentation can also help you evaluate which clusters are most profitable for your business, enabling you to identify both the most valuable customer segments and avoid spending money on segments that are not likely to yield conversions. In the long run, to maximize your profit, it is very important to know exactly which customers to focus on and invest in.
- By promoting product development: In today’s customer-centric market, to have a competitive edge, your product or service needs to be personalized to your customer. Gathering data from surveys or on-ground testing to experiment with different approaches, can be powerful ways to determine what works and what doesn’t. To set yourself apart, you can use customer feedback to improve the quality of your product or satisfaction of service and identify opportunities for innovation.
- By encouraging agility: There’s never been a time where it was more important for businesses to stay agile. As converting new customers gets more difficult, companies are focusing their resources towards retaining existing customers, rather than trying to find new ones. This is not a simple task. Studies show that more than two thirds of the B2B customer base is at risk. Successful customer retention means constantly adapting to your customers’ evolving needs and to do that, Data Analytics helps you predict problems, offer solutions accordingly and adjust your business strategy promptly.
- By aiding disruption & innovation: In recent years it is prominently seen that people who have harnessed the power of Data Analytics at their core of their business, have been remarkably successful in disrupting entire sectors and established industries. Most of these businesses, like ‘Uber’ and ‘Airbnb’, have been founded on analysing data, allied to smart use of Artificial Intelligence, bots and mobile apps as central pillars of their business delivery.
So whatever your industry, Data Analytics helps you understand your customers’ behaviour and predict how that behaviour might evolve in the future. It can help you recognize why customers leave, make necessary improvements to your product or service and target retention campaigns at those customers that are most at risk of leaving.
Not surprisingly, more companies than ever are striving to be data-centric to help them compete in a marketplace which includes the disruptive threats described earlier. But only a few have figured out well, how to actually use data to make their business more profitable. It’s only when they support change, are insights most powerful. So you need to use the data you gather to inspire meaningful action in your business.