“Any enterprise CEO really ought to be able to ask a question that involves connecting data across the organization, be able to run a company effectively, and especially to be able to respond to unexpected events. Most organizations are missing this ability to connect all the data together.”- Tim Berners-Lee
Putting in place strategies and the most effective means to collect customer data will fail to be helpful for a company unless it is able to put this data to good use. The importance of big data in today’s business environment cannot be overemphasized. As companies grow and become global and more diverse, managing customer data manually is impossible, let aside putting it to good use for the company.
Customer data provides insights into customer behaviour and helps a company predict future patterns and expectations of customers. Customers buy for a variety of reasons and customer data enables a company to understand the ‘process and stages’ a customer goes through before actually purchasing. The process begins with the prospect first approaching the company without too much information and as the company uses the customer data to understand reasons and trends, they would be able to give enough reasons to the prospect to make a purchase. Understanding the customer data will enable the company to prepare the most customized sales pitch and products and create a more lasting positive impression on both prospective and existing customers.
Using customer data effectively, translates also to building long-term relationships with customers that would yield profits. Through the knowledge gained from this data, companies lower the risk of customer churn and reduce their costs on acquiring new ones (which according to research is an activity that costs 5 times more than retaining existing customers). Customers become profitable only over a period and hence continuously losing the customers will mean serious losses for a company. Even when a company is trying to attract more customers, some amount of customer data is required in order for them to know which markets and customers they must target in order to gain maximum conversions. With a tough economy and limited resources, no company can afford to waste its resources on marketing to a customer segment that would outright reject their proposals or would have no use of their products. Customer data helps a company to focus on a niche segment and one where they would have higher sales and many chances of success.
Customer data helps a company segment its customers to understand which are their best ones and the common thread in these ‘good customers’. A company can then put in more effort to keep such customers for the longest time and target markets where they can find similar customer profiles and attract them to their company. Their efforts in this direction would be more focused and more potent than just random guesswork about what the customer preferences could be. An understanding of how to use customer data proves to be a critical difference between success and failure.
Getting a grip on customer data is even more important now – given that customers drive business strategies, decisions and profits. Without analysing customer data a company would never be able to understand its customers – existing and prospective – at a deeper level and hence would not be able to provide customized service and products – something that every customer demands. Irrespective of how and at what level customers interact with a company, it is crucial that a company gains maximum insights from the customer data available to them and consistently make an effort to get more such data. Enhancing customer experiences is significantly simpler when a company takes the time to understand each customer’s unique needs and reasons to buy. Customer data if used effectively can serve as a blueprint to building the best customer service policies and the most relevant products and services. How effectively does your company use the amounts of customer data available to them?
Research has revealed, time and again, that customers are willing to buy more and spend about 13% more on companies that provide superior customer service and make them feel important and valued as customers. Doing so is possible by using customer data to create customized products and personalized solutions for customers and by providing them with top class service each time they connect with the company. Using past data on a customer, companies can predict future behaviour and thus proactively send such customers information about products, upcoming promotions and offers – all serving to keep the customers engaged and interested in the company. Customer data would also enable a company to ascertain who their regular customers are and so fashion loyalty programs based on the customer’s interests, preferences and possible needs in the future.
Most companies now operate both in the on-line realm and from brick and mortar stores. By collecting and using customer data effectively, they can improve their products and the experiences their customers have with them. By using on-line customer data, companies can ascertain for example – where the largest section of their customers is located and can look at opening up a store in the area to enhance the convenience of their customers. In addition, by studying the demographics, a company would be able to place the most appropriate products for the particular customer base. This not only attracts these customers repeatedly, but also reduces the costs of the company by lowering the inventory they would need to maintain on products that customers would possibly not buy.
As mentioned above, understanding and using customer data will ensure that a company can launch products at the most opportune time, target the most likely to buy customers, put in place customized promotions and offers and send out the most enticing communiqués that will encourage customers to buy. Not only will customers be happy with the ‘deals’, they would come back and recommend the company and its products to their friends and associates.
Companies can also use customer data to reach out to customers for feedback in their endeavour to improve. Companies can check back with customers on their experience of doing business with their company, whether they found the pricing to be adequate and the likelihood of remaining with the company. By incorporating the suggestions and feedback the customers provide, they would encourage the customers to continue their association with the company and display their commitment to serving their customers well, consistently.
Gathering, collating and using customer data is no longer an easy or a simple process. As mentioned, companies are expanding, to combat the ever-increasing competition, and as a result, their customers numbers are increasing too which translates to even larger amounts of customer data. As we have seen, customer data can prove to be the most distinguishing elements for a company if used well. Rather than waste this precious resource, companies must look at using it effectively, constantly upgrading it and letting customers – both current and future – know that the company cares about them and is willing to make every effort to ensure that the customers do business with them for a long time. When a company can turn customer data into a working resource, it is able to increase its profitability and ability to retain its customers.
